While a service experience is “fragmented” You can hold a product in your hand A “Service” tends to be a “sum of many parts” For a Retailer-right from the entrance, the people, the ambience contribute to Brand experience
“Sculpting a branding idea around packaged goods is much easier. The bottle of Coke can’t talk back. It never changes shape or color and if you don’t like how it is, it won’t ever argue with you.”
“The retail store, the service provider, the Bank are all much more complicated. You can’t hold them in your hand. In fact, most times they can hold you in their hands. You walk in and around them, besides them...It is the experience which defines them.”
The Data rich economy! Almost 60% of GDP is from Services sector –Customer interaction with companies increase! Growth of “Addressable media” –large customer databases in Banks, Retail &Telecom etc Availability of rich transactional data –data leading to a “customer conversation” Almost 400 million customers and growing!
60% Data & 100 % Execution Gartner: Only 20% of enterprise will use more than 50% of the total data they collect to gain competitive advantage.
Principle No 1: Obsess about “Needs” Obsess about customer needs, not product features. –Rather than racing to bring new product features to market, companies need to refocus on the needs of their customers — who might even want fewer features Source: Forrester
Principle No 2: Brand every interaction! Reinforce brands with every interaction, not just communications. – Traditional brand messaging is losing its power to influence consumers — –that’s why branding efforts need to expand beyond marketing communications to help define how customers should be treated. Source: Forrester
Principle No 3: Company mission Treat customer experience as a competence, not a function. –Delivering great customer experiences isn’t something that a small group of people can do on their own. –everyone in the company needs to be fully engaged in it. Source: Forrester
Why customer marketing Availability of technology to understand customer behavior –Analytical and Marketing automation tools available –Analytical resources:large talent pool Marketing to a segment of one -now possible !
Why customer marketing IT environment maturing-customer data integrated in Datawarehouse Data size multiplying rapidly-HDFC bank has over 5 terabytes of data One view of customer is now possible
Key Business Ideas Build a core competency in “Data led” marketing –Analytics will be “the heart” of business in the future Move towards Web Analytics –Internet is a training ground for “customer pull” channels Customer behavior changes –spot them as they happen… –Event based IT architecture –“Market so well that it feels like a service”
Start small,use Excel! Move from data to insight to action and close the loop!
Customer marketing simplified! Keep it simple Be more Relevant to the customer Go one step at a time-Shoppers’ Stop started by collecting visiting cards Don’t led technology overwhelm you-keep investments within limits
Customer marketing simplified! The most essential resources in any Customer marketing program are –a wealth of hypotheses about the customer! –and a variety of offers to test these hypotheses.
Customer Loyalty Management Understanding What Must Be Managed
"Marketers have developed an insane imbalance between obsessive customer acquisition and negligent customer retention"
Why should we care about loyalty? Source: Reichheld, Harvard Business Review Sept/Oct ‘90 25 30 35 40 45 50 75 85 0 10 20 30 40 50 60 70 80 90 Auto Service Insurance Brokerage Credit Cards Retail Software Building Mgmt Credit Insurance Distribution % Increase in Customer Value Value of Increasing Retention by 5% The payoff of loyal customers
Why Are Loyal Customers More Profitable? No acquisition costs Reduced servicing costs as they “learn” the company They spend more They recruit new customers They are insulated against competitive switching They are less price sensitive
The Relationship Management Continuum Like life, customer relationships follow patterns Recognize the phases of a customer’s relationship Respond with appropriate tactics Consumer introduced to the brand Sustain awareness and interest Incent trial Solidify relationship Grow relationship Courtship Recognize it’s happening Lose Interest Daily LifeHoneymoon Introduction Part Company Give up when it makes sense Try Again Reemphasize what matters to them AcquisitionLoyalty Management Source: WCJ
Basic objectives for customer relationship management Retain best, most profitable customers Maintain brand vitality VALUE Acquire high potential customers Make good customers better Reconnect with lapsed users
Key Principles of Loyalty Source: Adapted from WCJ
Principle #1 O-S-F-A marketing strategies do not recognize differences among customers –Needs/Wants –Experiences –Value –Potential “One Size Fits All” doesn’t work O-S-F-A
Principle #2 “Acquire with intent to keep” Acquisition governs retention “Retain with intent to profit” Retention governs profit Acquisition and Loyalty must serve one master: profit
Retain with Intent to Profit Hilton HHonors Lapsed Member Letter “Pay a $10 administrative fee if you are unable to stay…”
Relevance is the key to loyalty marketing Principle #3 Loyalty Marketing anticipates, plans for and acts on moments of natural transition, transaction and decision Loyalty Marketing reduces the consumer’s decision-making complexity Loyalty Marketing is information dependent
Trigger-Based Communications Sears HomeCentral Service Contract “Your Craftsman lawnmower caused you a little problem in the past.”
Trigger-Based Communications Landscaper New Homeowner Letter
Achieve relevance through customer listening Take advantage of all contacts to learn about the customer Customer Knowledge Base Customer Surveys Purchase & Txn Data App/ Warranty Info Customer Service Overlay Data Customer Contact Staff
Customer Listening Hertz #1 Club Gold Renewal Mailing
Manage the Customer Experience Monitor it –Especially when an intermediary is involved Keep customers informed Admit delivery failure/mistakes –Turn negatives into positives –Learn from mistakes Principle #4
Recognize delivery failure Virgin Atlantic Flight Delay Apology “I am very sorry to advise you that there will be a delay to your flight today.” “As a gesture of goodwill, I would like to offer you an additional 10,000 Freeway miles.”
Improve product delivery American Express Merchant Coverage Insert “Are there any more places you’d like to use the Card? Tell us!”
Use loyalists as an incremental sales force Actively managing word-of-mouth is a powerful Loyalty tool –Intuitive “targeting” –Greater credibility Create a win/win by rewarding the customer Principle #6
Reward Customers for Referrals ebates.com Referral Commission Program
Reward Customers for Referrals Amex Membership Rewards Member get Member Bonus
Partnering enterprises to optimize marketing performance
Our Mission To combine data, technology and build actionable analytical marketing services to accelerate ROI-driven, real-time customer-engaged marketing. www.cequitysolutions.com
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