Customer retention is ultimately driven by value. Even the best segmentation, targeting, positioning, creative messaging, or promotion with flawless execution will fall flat in the absence of value.
Therefore, in developing a plan to maintain and upgrade a customer base, it is necessary to build on a solid foundation. Only then will the plan lead to greater customer retention and overall organizational success.
To succeed, customer retention must be a top-down, companywide initiative. Truly committing to customer retention is hard work because it affects virtually every aspect of your organization, but the payback in sustainable growth and profitability makes the effort worthwhile.
The path to customer retention involves six key steps:
1. Ask
Ask your customers what they want and what they like and dislike. Include customer surveys on your mobile channel, website, at the point of sale, and in package inserts. You'll likely get "extreme" feedback from customers who love you or hate you. Customers who are mildly satisfied are not as motivated to speak their minds.
But ask only if you're prepared to deal with the responses. Turning a deaf ear to a problem is the kiss of death.
Please remember that customers expect you to take action when they complain, especially if you initiated the dialogue. Use feedback from your surveys to make improvements to your product or service. Customers love it when you listen to them!
2. Evaluate
Evaluate your customer data to find out who your best customers are. That may sound obvious, but the devil is in the details. There may be trends that you've overlooked.
And keep an eye on profitability, not just transactions. In the credit-card industry, for example, deep spenders who pay off their balance each month usually are not as profitable as moderate spenders who carry a balance.
When you know who your best customers are, you can tailor your marketing programs to keep those customers and encourage them to spend more with you.
3. Stimulate
If you have sold your customers a service and they're not using it, get them to activate (e.g., online bill pay, long-distance service, and credit and debit cards).
At the start of a new relationship, there's that warm and fuzzy feeling when new customers sign on. You got them to say yes. Four months later, you're wondering why those customers don't love you. Is it something you did?
No. It's something you didn't do: You sold to them and moved on. You assumed that they would fend for themselves and figure out all the great things about doing business with you.
The first few days and weeks of a new business relationship are critical. Shower them with your kindness. Send direct mail and email reminders. Thank them for their business. Do everything you can to make the "honeymoon" phase of your relationship special.
In the long run, if they're not using your product or service, they're likely to bail when a better deal comes along.
4. Reward
Reward your customers with meaningful perks for doing business with you. It seems like everyone has a loyalty program these days. Customers are getting weary of "me too" programs that don't offer substantial value.
Instead of always giving customers what they expect, give them the unexpected. For example, a midsize accounting firm rewarded some of its best customers with a box of Haigh's chocolates for their business. It was an unexpected, tasty little perk that came out of the blue.
Results? Those customers had above-average retention rates the following year. Sometimes the little things can mean a lot.
5. Aggregate
Try to get all the customer's eggs in your basket. In other words, cross-sell other products and services. Doing so is much easier when you already have a relationship with the customer. Offer customers one-stop shopping, consolidated billing, free postage, and other benefits for giving you more of their business.
Everyone's busy, and consumers are looking for service providers that can make their lives easier. It's what they want, so why not give it to them?
6. Take action
A great product and great customer service are the foundation for customer retention. And positive word-of-mouth is by far the best marketing tool in your arsenal. But you can't control when that happens, so you need a marketing plan to keep the customers you want.
Don't just hope your customers love you—be proactive. Put your plan in writing, and make it stick. Follow through and take action. Use direct mail, email, newsletters, and other marketing tools to make your best customers feel special.
Treat your best customers with respect, and they'll reward you with loyalty beyond your wildest dreams. Send them targeted messages. Give them special incentives. Keep in mind that it's easier to cultivate your current customer relationships—not to mention less expensive—than it is to begin new ones.
The role of customer retention in the overall organizational strategy is one of protecting and managing the primary source of resources. It is also one of defending and enhancing market position, and of optimizing resources and opportunity.
That is why although seemingly a purely tactical approach, customer retention also belongs in the realm of strategic market planning and is a required strength of any successful organization.
It costs about five times as much to acquire a new customer as it does to keep a current customer. That's why it pays to pay attention to your best customers. In the end, they'll buy more, stick with you longer, and tell their friends how great it is doing business with your company. Isn't that what we all want?
by Chintan Bharwada
Tuesday, November 16, 2010
Friday, November 12, 2010
Implementing the latest marketing initiatives
Shopper marketing has traditionally been about developing a marketing relationship with consumers in the store. It involves the strategy and tactics that are employed within the framework of a retail environment in order to attain a specific business objective, not the least of which is driving top-line revenue for brands.
Shopper marketing is now evolving at a very quick pace and is becoming much more involved in what is called "the digitally fueled path to purchase".
Brand marketers and retail clients should view the digital path to purchase as a three-step process:
In deriving shopper insights, develop an engagement strategy that is contextually relevant to the actual shopper. It’s not just purely about putting a product on the shelf and offering a coupon or some form of a discount anymore. Shopper marketing is much more about the process of connecting with shoppers when, where and how they would like to engage. Most often, it’s through a digitally oriented methodology.
There are some standard elements in the shopping experience—pre-shopping, while shopping and post-shopping. Those factors focus on the “when” and the “where” aspects but the “how” is becoming increasingly more important. It’s being driven more by individual product categories. For example, how shoppers engage with a commodity like paper towels is significantly different than how they would engage with a durable good or entertainment-based item. The path to purchase varies across categories.
The next generation of shopper marketing is no longer defined by traditional brick-and-mortar stores or ecommerce for that matter. Consumers don’t really have to search for information in the pre-shopping phase. They can have it delivered to them wherever they are and on their own terms based on their predisposition toward different types of communication and technology.
Moving forward, we should see more two-way dialogues taking place between brands and shoppers. We see more preferential treatment for brand loyalists, influencers and those who are actively engaged with brands. Brands will reward loyalty in a more impactful way as it relates to digitally fueled shopper marketing.
Physical retail stores are still important but more and more, we see that how retailers and brands interact with someone digitally, on their terms and through the device by which they want to interact, is becoming much more important. We’re becoming more channel-agnostic and contextually relevant.
Marketers need to understand shopper segmentation based upon purchasing behavior, while also focusing on consumers’ digital lives. They must create digital shopper segmentation models in order to arrive at contextually relevant and holistic shopper marketing opportunities.
Marketers should evaluate the strategic needs of the brand, particularly at the pre-shopping phase. We see that shopping is taking place constantly. The lines are blurring between the pre-, in-store and post-shopping phases. It all counts as shopping, even as you’re consuming and using a product. These lines are blurring, particularly as the path to purchase is more digitally influenced. We should try to understand how a shopper behaves along the entire continuum.
There’s an insight-driven digital component for almost all engagement marketing programs that includes metrics and measurement from an ROI perspective. It’s really important to understand not only the future needs for the brand’s growth, but also the needs of the shopper segments as they evolve and change over time. For example, conduct a research into understanding younger consumers, diverse ethnicities and baby boomers in order to better understand their digital lives.
For more information on how to digitally fuel your business, please contact MODI$club.
Shopper marketing is now evolving at a very quick pace and is becoming much more involved in what is called "the digitally fueled path to purchase".
Brand marketers and retail clients should view the digital path to purchase as a three-step process:
- understanding the brand, its positioning, target and overarching essence.
- create an engagement strategy.
- activate across relevant touch points.
In deriving shopper insights, develop an engagement strategy that is contextually relevant to the actual shopper. It’s not just purely about putting a product on the shelf and offering a coupon or some form of a discount anymore. Shopper marketing is much more about the process of connecting with shoppers when, where and how they would like to engage. Most often, it’s through a digitally oriented methodology.
There are some standard elements in the shopping experience—pre-shopping, while shopping and post-shopping. Those factors focus on the “when” and the “where” aspects but the “how” is becoming increasingly more important. It’s being driven more by individual product categories. For example, how shoppers engage with a commodity like paper towels is significantly different than how they would engage with a durable good or entertainment-based item. The path to purchase varies across categories.
The next generation of shopper marketing is no longer defined by traditional brick-and-mortar stores or ecommerce for that matter. Consumers don’t really have to search for information in the pre-shopping phase. They can have it delivered to them wherever they are and on their own terms based on their predisposition toward different types of communication and technology.
Moving forward, we should see more two-way dialogues taking place between brands and shoppers. We see more preferential treatment for brand loyalists, influencers and those who are actively engaged with brands. Brands will reward loyalty in a more impactful way as it relates to digitally fueled shopper marketing.
Physical retail stores are still important but more and more, we see that how retailers and brands interact with someone digitally, on their terms and through the device by which they want to interact, is becoming much more important. We’re becoming more channel-agnostic and contextually relevant.
Marketers need to understand shopper segmentation based upon purchasing behavior, while also focusing on consumers’ digital lives. They must create digital shopper segmentation models in order to arrive at contextually relevant and holistic shopper marketing opportunities.
Marketers should evaluate the strategic needs of the brand, particularly at the pre-shopping phase. We see that shopping is taking place constantly. The lines are blurring between the pre-, in-store and post-shopping phases. It all counts as shopping, even as you’re consuming and using a product. These lines are blurring, particularly as the path to purchase is more digitally influenced. We should try to understand how a shopper behaves along the entire continuum.
There’s an insight-driven digital component for almost all engagement marketing programs that includes metrics and measurement from an ROI perspective. It’s really important to understand not only the future needs for the brand’s growth, but also the needs of the shopper segments as they evolve and change over time. For example, conduct a research into understanding younger consumers, diverse ethnicities and baby boomers in order to better understand their digital lives.
For more information on how to digitally fuel your business, please contact MODI$club.
Monday, November 1, 2010
How to Avoid Advertising $1 Billion Mistake
The advertising industry is undergoing a massive shift in how its dollars are spent. Money is moving from the offline world to the online and wireless world at a rate of roughly $3 to $5 billion a year.
However, in that rapid shift of spend, a major mistake has been made. Almost all marketers are guilty of it, and it is costing them more than $1 billion a year as time goes on.
Most advertising networks and websites that are delivering ads have a very simple goal: launch a campaign based on the advertiser's requirements and improve the campaign over time based on where they find success.
The goal of the delivery team (or optimization engine if a technology is being used) is to improve the marketer's metrics by employing tactics such as geotargeting, demographic targeting, time of day, frequency capping, etc.
Ideally, a campaign starts with a certain baseline that improves over time as the network, site, or demand-side platform (DSP) optimizes the campaign.
If a campaign is being measured to an action—let's say a purchase—a network can analyze results, see where it is best achieving success, and improve the campaign metrics and return on investment over time.
If a campaign is being measured to clicks, then over time the click-through rate (CTR), or number of times an ad is clicked per impression, should increase.
Although most campaigns are looking to drive conversion goals, many still use the click and CTR as their primary metrics, because those metrics traditionally have been used to measure success and because they're easy to measure.
There are no extra tags to install, and there is no work to do to confirm the tags are operational. The CTR is easily calculable and comes directly from the ad server, so it doesn't take any additional work to access it. Optimization routines (often spreadsheets) are largely set up natively to handle the CTR as the metric to optimize to, which makes it easy to "flip a switch" to get to the proper goal.
However, the click's days are numbered. There is an increasing awareness of some "cracks" in the click's validity, and recent studies by comScore, Microsoft, and others have effectively invalidated the click as an important measure for display advertising.
Bizo's recent study of hundreds of B2B advertising campaigns that ran from January through June of 2010 revealed some interesting findings.
Among campaigns that were being measured and optimized to actions (conversions, downloads, etc.), the CTR was approximately 10% lower than that of campaigns that were being optimized to clicks. In short, campaigns with actions as their goals drive 10% fewer clicks.
The data also shows that of the top 25 inventory sources based on CTR, only six of them fall in the top 25 from a conversion-rate perspective. That means that sites that have great CTRs typically do not offer great conversion rates. Thus, using CTR as a meaningful metric on publisher sites is just as big a mistake as doing so on ad networks, as it would lead a campaign astray almost 80% of the time.
Considering that the goal of any advertising investment is to drive a prospect to a conversion action (e.g., purchase, engagement, a user filling out a form, etc.), the fact that the click-through rate is lower when optimizing to the end action has a profound and clear implication: Optimizing to the click harms a campaign's success.
If you value the online display advertising industry at $10 billion, and we assume that most networks and sites are optimizing to the click today, we estimate that the value lost to the industry is well over $1 billion and growing rapidly as the industry expands.
In fact, the Google Content network (the display adjunct to search) actually forces marketers to make the same giant mistake because they are paying by click and Google is optimizing the delivery of ads to maximize the number of clicks (and revenues for Google).
Unfortunately, the ad exchanges are no better. Considering the ease with which the click is measured, the DSPs are primarily doing the same thing today: measuring to the wrong metric and, in doing so, harming advertisers from reaching the goal they're seeking: an educated consumer who buys from them.
The notion that a user would click on a display ad is just as erroneous as thinking a user watching a TV ad for Lexus would pick up the phone and order a Lexus while viewing the ad. Users viewing the ad are not looking to click on something.
As an advertiser, your goal shouldn't always be to drive a click. In many cases, you're looking to educate and ultimately drive an action at some point down the road. So the click can be a highly misleading metric if it's not the right people who are clicking.
In fact, most ads today get 1 click for every 1,000 views, and, on average, more than 40% of those "bounce" from the landing page (i.e., leave as soon as they arrive), suggesting that many of those banner clicks are user mistakes.
To recap: Unless the measurement, and thus optimization, is based on the action, you will often optimize away from success.
So what's an advertiser to do? All advertisers need to start thinking about how to measure beyond the click to drive success in their advertising campaigns.
Here is a quick four-step plan to display-advertising success:
For more information on SMS marketing or tools that will provide clear conversion metrics, please contact us.
Source: Marketing Profs
However, in that rapid shift of spend, a major mistake has been made. Almost all marketers are guilty of it, and it is costing them more than $1 billion a year as time goes on.
Most advertising networks and websites that are delivering ads have a very simple goal: launch a campaign based on the advertiser's requirements and improve the campaign over time based on where they find success.
The goal of the delivery team (or optimization engine if a technology is being used) is to improve the marketer's metrics by employing tactics such as geotargeting, demographic targeting, time of day, frequency capping, etc.
Ideally, a campaign starts with a certain baseline that improves over time as the network, site, or demand-side platform (DSP) optimizes the campaign.
If a campaign is being measured to an action—let's say a purchase—a network can analyze results, see where it is best achieving success, and improve the campaign metrics and return on investment over time.
If a campaign is being measured to clicks, then over time the click-through rate (CTR), or number of times an ad is clicked per impression, should increase.
Although most campaigns are looking to drive conversion goals, many still use the click and CTR as their primary metrics, because those metrics traditionally have been used to measure success and because they're easy to measure.
There are no extra tags to install, and there is no work to do to confirm the tags are operational. The CTR is easily calculable and comes directly from the ad server, so it doesn't take any additional work to access it. Optimization routines (often spreadsheets) are largely set up natively to handle the CTR as the metric to optimize to, which makes it easy to "flip a switch" to get to the proper goal.
However, the click's days are numbered. There is an increasing awareness of some "cracks" in the click's validity, and recent studies by comScore, Microsoft, and others have effectively invalidated the click as an important measure for display advertising.
Bizo's recent study of hundreds of B2B advertising campaigns that ran from January through June of 2010 revealed some interesting findings.
Among campaigns that were being measured and optimized to actions (conversions, downloads, etc.), the CTR was approximately 10% lower than that of campaigns that were being optimized to clicks. In short, campaigns with actions as their goals drive 10% fewer clicks.
The data also shows that of the top 25 inventory sources based on CTR, only six of them fall in the top 25 from a conversion-rate perspective. That means that sites that have great CTRs typically do not offer great conversion rates. Thus, using CTR as a meaningful metric on publisher sites is just as big a mistake as doing so on ad networks, as it would lead a campaign astray almost 80% of the time.
Considering that the goal of any advertising investment is to drive a prospect to a conversion action (e.g., purchase, engagement, a user filling out a form, etc.), the fact that the click-through rate is lower when optimizing to the end action has a profound and clear implication: Optimizing to the click harms a campaign's success.
If you value the online display advertising industry at $10 billion, and we assume that most networks and sites are optimizing to the click today, we estimate that the value lost to the industry is well over $1 billion and growing rapidly as the industry expands.
In fact, the Google Content network (the display adjunct to search) actually forces marketers to make the same giant mistake because they are paying by click and Google is optimizing the delivery of ads to maximize the number of clicks (and revenues for Google).
Unfortunately, the ad exchanges are no better. Considering the ease with which the click is measured, the DSPs are primarily doing the same thing today: measuring to the wrong metric and, in doing so, harming advertisers from reaching the goal they're seeking: an educated consumer who buys from them.
The notion that a user would click on a display ad is just as erroneous as thinking a user watching a TV ad for Lexus would pick up the phone and order a Lexus while viewing the ad. Users viewing the ad are not looking to click on something.
As an advertiser, your goal shouldn't always be to drive a click. In many cases, you're looking to educate and ultimately drive an action at some point down the road. So the click can be a highly misleading metric if it's not the right people who are clicking.
In fact, most ads today get 1 click for every 1,000 views, and, on average, more than 40% of those "bounce" from the landing page (i.e., leave as soon as they arrive), suggesting that many of those banner clicks are user mistakes.
To recap: Unless the measurement, and thus optimization, is based on the action, you will often optimize away from success.
So what's an advertiser to do? All advertisers need to start thinking about how to measure beyond the click to drive success in their advertising campaigns.
Here is a quick four-step plan to display-advertising success:
- Admit that the click is the wrong metric and you need to change how campaigns are being measured.
- Figure out the right action that you need to measure to for success. Is it a purchase? Download? Text-in? Form submission? Engagement? All of the above?
Ultimately, what key actions are clear indicators that your prospects are progressing toward your goals? - Optimize your campaigns using tools that will give you clear metrics on where those conversions are coming from.
For more information on SMS marketing or tools that will provide clear conversion metrics, please contact us.
Source: Marketing Profs
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