Spray and Pray is NOT a Customer Contact Strategy


My family and I recently moved  into a new house, and in the process I utilized the “moving” services offered by Big Satellite Company [name changed to protect the guilty].  I was a little perturbed when I was unable to coordinate the moving service online, but that’s another topic.  Anyway, all went well and the move went great – they even threw in some free premium channels for free as a “value add” to using the service.  Great way to protect against attrition to competing companies or, god-forbid, cable.

Here’s the kicker – a day later I received an email from Big Satellite Company asking me “Did you know that you can manage your account online?”.  My first inclination was to reply and ask them “Do you know that I had been doing so for my 10+ years as a customer?  Not to mention that the account service I most recently used was not accessible online?”.

Obviously there is a business rule trigger that sent me the email, likely because I called in to the service center to request the moving service, but the automation rules failed to recognize the fact that:

  1. I am frequent user of their online system for account changes.
  2. The service most recently used in not available online.

To borrow from the ESPN crew, C’mon MAN!

I know this is probably rocket-science to some, but companies can do better!

Spray and Pray is not a Customer Contact Strategy – by this I mean that automating communications with your customers should not be done simply for the sake of doing it, and furthermore, not all customers are created equal.   A sound Customer Contact Strategy should span each and every potential interaction a company could have with a customer regardless of contact or delivery channel.  And, these contacts should be well thought out, situational, and personalized to maximize relevance to the customer.  This results in improving sentiment towards your brand with the big payoff being not only the retention of customers, but perhaps more important, the recommendation of your product or service to the customer’s extended “network” of friends, family, and colleagues via social networks .  This is often exacerbated by the  interactions being handled through different software platforms and the wide spread practice of outsourcing portions of CRM processes to different companies (or handled internally by different teams)  as well as the proliferation of subcontracted delivery channels – but trust me when I say that it can be done!

Ask me how…

If the World is Flat, why do you need a Sherpa?


Flat Earth Sherpa

By now, I am sure you all have read The World Is Flat: A Brief History of the Twenty-First Century by Thomas Friedman?  If you haven’t read this book yet, I highly recommend you read it right away – it will change the way you think about the future that is already here.  With that said, the basic premise that I took away from the book in a single sentence is that technology has essentially “flattened” the  Earth by enabling real-time collaboration on a global basis. The concept of a small manufacturer in India, sourcing raw materials in China, perhaps on Alibaba, with funding via micro loan from the UK, and selling finished goods on eBay to an American consumer is now a reality.

This is where the irony enters.

This new flat Earth has been a tremendous enabler for small and medium-sized businesses, but has muddied the waters for much larger companies.  I spend a great deal of my time consulting with some of the world’s largest and most recognizable consumer brands, and for the most part these companies recognize and are actively trying to exploit this new flat Earth, but frankly they have no idea how to choose the best countries for expansion, how to maximize growth for those countries they are already in, and in either case, how to navigate the myriad of technology, data, cultural, legal and consumer privacy challenges.

Hence, the need for a Sherpa (hint: ME).

If your company or if you have a client that is facing these types of Global Expansion challenges in this new flat earth, please let me know – I can lead the way.

It has been a while since I have posted an article, and I certainly have no shortage of topics to write about; the fact remains that  I simply do not have enough time in the day.  And to add insult to injury, my travel schedule and client load keeps me flush with article ideas, but  no time to write about them.  I actually did some of the final editing for this post on my new iPhone 4 (more on that in future articles) while my son drank his milk and watched Little Einsteins from my lap!

Anyway, thanks for stopping by and keep your eyes open for a few rapid-fire posts over the next week or so – having not written in a while, they will be based on my travels and observations over the last couple of months.  Don’t forget to leave your comments and provide feedback.

Thank you for reading and Happy Hunting!

What’s worse? ‘Kids Today’ or Client Expectations?


 

Little Rock Arkansas

Image compliments of Little Rock Beautiful Comission

 

I know I have not posted lately, but I have been traveling a lot.  As a matter of fact, I just returned home from Little Rock, Arkansas and my trip, as well as a brief conversation with some strangers on the last night, were the catalysts I needed to write this! 

My last night in town it was raining, and as I made way back to The Peabody,  I was ducking (no pun intended) under storefront awnings and doorways to avoid getting drenched.  I was half way to the hotel and as I popped into a doorway, there were a couple of “dudes” in their early twenties standing there.   Small talk ensued, mostly with the shorter one.  They appeared to be a gang of two; the shorter one did all of the talking and the other always looked at the leader before speaking when he did.  The leader asked me what I did for a living.  At the risk of confusing them (sometimes it is not crystal clear even to me), I simply said ‘I’m a consultant”.  He followed with “What’s that?” and I told him “I give people my opinion”.   Now the quiet one pipes up and asks “You can get paid for that?!” with his eyes wide open.  Now the simple conversation turned into more of a Magic 8 Ball session – they asked me about all of the secrets of the universe, as if I were the Dhali Lamba himself.  The last question came – “How much money can you make buying stocks?” he asks.  I tried to explain it was a matter of the amount invested, the stock, and the time period – but mostly luck.  The short one said “How much can I make if I buy $1,000 in stock?” – “It depends” I say, “But it wouldn’t be hard to get 10% in return over some time period”.  He then asks “How much is that?”. 

As I dash into the rain, running from the fear that I would get dumber if I stood there any longer, I was thinking to myself what every generation before me has thought, “What is it with kids today?”.  

This brings me to wondering what’s worse – “kids today” or client expectations?  Let me explain. 

Stethoscope

Image compliments of the Fordham University Blog

 

On a regular basis, I work with many of the most sophisticated and successful companies in the world, and I am amazed at how often they come to my company with a sincere desire to improve what they’re doing, yet when we ask them direct questions about their business challenges and other details that are variables that will dramatically affect our ability to help them, not to mention our price, they refuse to answer.  They just keep asking us “When can you provide a solution and how much will it cost?”  That’s like going to a doctor and telling her you that don’t feel well, but then not answering any of her questions about your symptoms or letting her examine you.

How can we prescribe a solution if you don’t describe the symptom?

Not sure which is worse – what do you think?

5 Ways to Boost Business


In 1975, Paul Simon had a hit with “50 Ways to Leave Your Lover”.  As a kid I obviously did not know what it was about or even what the name of the song was, but I would gleefully belt out the catchy chorus, rhyming about Jack, Stan, Roy, Gus, and Lee (special prize to the first reader to tell me the other half of the rhymes!).

The song really only highlighted 5 of the ways to leave, so I thought I would take some poetic license and offer you my “5 Ways to Boost Business”.

1.       Understand Your Audience

Steven Covey, author of “7 Habits of Highly Effective People”, begins his Habit #5 with “Seek First to Understand”.  I personally rank this much higher, but nonetheless we should all agree that this is a pillar of any successful endeavor.  One of my previous articles detailed some relatively simple ways to better understand your customers.

2.       Reach Them Where They Are

There are a myriad of choices today regarding “where” to try and establish a dialogue with your customers.  Notice I said dialogue, implying a 2 way conversation.  This is possible with newer and growing approaches related to Search, Online Display, Social, and Mobile – including location-based services, and even present in the tried and true of methods using Point of Sale promotions, Direct Mail, and Email.  A major step in creating a customer dialogue is to do it on their terms.  Channel preference is often overlooked yet can be a critical factor in defining the customer’s overall experience and opinion of your products and services, and most importantly their willingness to recommend you to others.  Don’t overlook or disobey your customer’s channel preference – if you don’t know their preference, JUST ASK! 

3.       Make Timely and Relevant Offers

Matching an offer to the target audience can be approached several ways from the complex methods of predictive analytics to the simple like using basic demographic information, geography, Life Stage segmentation, Life Event Triggers, or even triggered actions (or inactions) from your own transactional data.    

4.       Give/Get

In today’s economic climate, it seems that Customer Loyalty is at an all time low, with consumers switching providers or changing brands based on price.  The underlying message is that the product or service is viewed as a commodity because there is no intrinsic value in buying it one place or the other.  All things considered equal, lowest price will win every time unless there is a compelling value in the relationship.  The path to retention (and growth) requires you to reward your customers, or “GIVE”, so that in turn you are rewarded by the customer and “GET” to keep and expand the business. 

5.       Deliver Great Service

Lastly, great service is hard to come by these days.  I am not sure why, but it seems to have been going downhill for some time.  Too many companies are focused on getting new clients in the door and are not providing the “care & feeding” of the clients already on board, and customers leave as fast as Sales can land them.    

I hope you find these tips useful and I look forward to your questions or feedback.  Don’t forget – I have a special prize to the first reader to tell me the other half of the rhymes in the song!

With the sprouting of gray hairs…


With the sprouting of gray hairs comes the realization that life is changing. First it was the reading glasses and now the gray hairs in my beard. This got me thinking about how my life today is different from a year ago not to mention 5, 10, or 15 years ago, and how much it will continue to change in the future. Fast forward through the sentimental and philosophical and you end up with the simple notion that:

“People need stuff and that stuff changes depending on their Lifestage”.

It Doesn’t Take a Genius
Marketers have known this for years and I take no credit for pointing this out. Many have gone to great lengths to create tools and methodologies to capture new clients whose journey through life is punctuated with events that ultimately define their needs (“needs” are very subjective and a whole ‘nother story). Life events include things like getting married, buying a home, having children, getting divorced (for more than 50% of U.S. society), becoming an empty-nester, and finally becoming a senior whose only interest seems to be spoiling the grandchildren and driving with a turn signal on. Let’s just say that my neighbor and I are both buying diapers but for different reasons – talk about cradle to grave, right?

Successfully reaching these consumers and getting them to buy your product or service depends on your ability to deliver a relevant, timely and compelling message in the appropriate and desired channel, which might include direct mail, email, mobile, social, search, or display.

Lifestage + Channel
This is a topic with increasing interest as of late – just this past week I read a MediaPost article that talks specifically about marketing to new parents in the mobile space. Apparently new parents are the group most likely to be responsive to mobile marketing. Some could guess that the lifestyle of those with young children is chaotic and thus making this group more receptive to “marketing on the go” since they are no longer spending a lot of time surfing the web, sifting through their inbox, social network, or even their direct mail as diligently as they did before children. When it comes to proximity or geo-location type of mobile marketing, again, the segment of those with children under 6 was most positive about the idea, as opposed to the “gotta have the new technology young male” as many would assume.

Since mobile marketing is still relatively new and untapped, only later will we later find out if mobile marketing receptiveness is less about the lifestage (having children under 6) and more about the generation of those who presently have children under 6? Only time (and science) will tell.

Image compliments of webcomic XKCD - http://xkcd.com/


Science is Fun!
There’s that word science again. The science behind marketing doesn’t have to be complicated. As a matter of fact, there are many solutions in the marketplace today that let you benefit from the science of others. Examples of this from Acxiom include things like “Life Event Triggers” which enable one to choose a prospect list based specifically on a recent life event like graduation, marriage, or child-birth. If your product or service is specifically relevant to people experiencing these events you can simply “subscribe” to receive lists of prospects in your area that recently “triggered” an event. Combine that with some technology and you can automate direct mail programs to effectively go “door-to-door” for you.

If your product or service does not have a clear tie to a specific life event, this is when you might use a Lifestage Segmentation system to uncover commonality in your current customer base to target new customers. Acxiom has a Lifestage Segmentation solution called PersonicX – if you follow the link you can see an interactive introduction to PersonicX. This solution segments U.S. households into 30 Lifestages that are then assigned to one of 70 Clusters. The Lifestages have cool names like “GenX Parents”, “Boomer Barons” and “Active Elders”, while the Clusters are sub-categories like “Cartoons and Carpools” or “Apple Pie Families”. Each Lifestage and Cluster is defined by a specific set of demographic variables combined with geographic and behavioral factors and represent a modern take on “birds of feather flock together”. Consumers move from one Lifestage/Cluster to another over time.

Using these types of solutions can be a very beneficial and simple way to inject some “science” into your marketing. With a simple list of your current customers you can identify the Lifestage of each with PersonicX, and chances are you will see the old 80/20 rule highlighted in a previous post come to life. There will likely be a concentration of your best customers in only a handful of Lifestages & Clusters. Based on this insight, you would be ahead of the curve if you were to then obtain a list of prospects in your trade area that are in the same Lifestages and Clusters as your best customers.

I look forward to your thoughts and feedback on using Lifestages to improve your targeting and increase response…

Vampires, Werewolves, and Targeting Consumers


No, I’m not that obvious. I can hear you thinking now, “Duh – Everyone knows that Vampires and Werewolves have been pursing people (read: target consumers) for centuries!” While true, that is not where I was going. I am referring more to the phenomenonal resurgence of these monster movie legends in pop culture today. Not only is it mainstream in the form of the Twilight saga, but with TrueBlood and scores of similiar shows. This is way bigger than Buffy the Vampire Slayer, Boris Karloff, or Tom Cruise could have ever imagined!

Then this past year, Werewolves were suddenly in the mix. Seemed like a “twist” to me, but for those that follow the ways of these creatures, apparently they often coexist and crosss paths; huh, who’da thunk it? All it took was one of the current reigning Vampire franchises to take the lead and everyone followed. So now you're asking yourself "So what?" and "What does this have to do with marketing and targeting consumers?”. The fact is that all of the movie companies, book publishers, toy manufacturers, you-name-it suppliers of whatever recognized a behavior and interest trend in the marketplace and are now riding the wave made up simply of like minded consumers. Just yesterday I was flipping though my 3 ba-zillion channels (and nothing is on) and ran across that movie from 1991 called “Silver Bullet” with Corey Haim and Gary Busey (it was a much better life for those 2 back then!) – it’s about a wheelchair bound kid who confronts the town Werewolf. Even old “products” get a boost when you have identifed the right audience.

So am I saying you should try to recognize the next cattle herd moment for marketing success? No – I am suggesting that you closely examine the behaviors and characteristics of your current clients. That could mean using Google Analytics on your website to capture browsing habits and click-through patterns. Or as previously discussed, it could mean looking at your clents purchase history and habits with you in terms of RFM (Recency Frequency Monetary) or even by enhancing your customer data with demographics or proprietary lifestage and lifestyle segmentation systems.

I look forward to your comments. If you would like to discuss any of these methods and how they can improve your marketing performance please contact me directly.

“Have you seen my glasses?”


Glasses Graphic With the obvious evidence that I was actually growing older, I finally accepted my fate and was recently fitted for a pair of “reading” glasses. Now and for evermore, the phrase “have you seen my glasses” will be part of my vernacular.

This got me thinking about how many businesses out there have been putting off “getting glasses” when it comes to looking closely at their customers and prospects. Or, for those that do have glasses, when was the last time they had the prescription checked and adjusted? In one of my previous articles, “Who are your best customers“, I explored the ways to take a closer look at your customers and why it’s important to do so regularly.

Over the years, I have spoken with many business owners and sales & marketing leaders, and I have found that the smaller the company, the more likely it is that they have not recently examined their customers (and have no plans to do so!). I find this interesting because the small business is probably the least likely to afford marketing to the wrong audience.

Building on the concepts I discussed in “Who are your best customers“, I am writing an article on calculating the Return on Marketing Investment (ROMI)and would like to hear your answers to the question “How do you decide how and what to spend on marketing?”

POLL: Which Lead Generation channel has been MOST effective for YOUR business?


Who are your BEST customers?


When this question is posed to a small business owner, a sales associate, or a marketer, it often results in a firm, clear answer like seniors, baby boomers, or soccer moms. Or if in B2B circles, something like “mid-market manufacturers of durable goods”. If you then follow with a simple “Great, but how do you know that?” this is where the blank stare comes in, followed by “I’m in the store all day and I greet all of the customers” or “I personally perform all of the quotes for new clients”. So it must be true – you CAN judge a book by its cover!

Wrong – everyone knows that not all soccer moms are created equal!

Data Rules
The reality is that in order to truly understand who your best clients are, you need data. This data can be transaction level data from point of sale systems, historical, summarized sales data from your accounting package, and even third parties in the form of demographic, psychographic, and behavioral data that is appended or added to your customer records. If you don’t have sophisticated systems for collecting and managing all of this data, do not fret for there are some simple ways to get started. And it is important that you get started!

Why is identifying my BEST customers so important?
There are two major reasons why it is important to identify and recognize your best customers.
1. The first is supported by the now mythical adage that “it is cheaper to keep the customers you have than it is to acquire new customers”. This statement has been spewed more ways than I can count and is credited to more sources than I can name, but the fact is that there is truth to these words and understanding who your best customers are enables you to strengthen the relationship and their loyalty through personalized customer service as well as relevant & timely communications and offers.

2. The second reason understanding your best customers is important, is that the insight gleaned from analyzing your current customers can be leveraged to find prospects that exhibit the same demographic, psychographic, and behavioral characteristics, which through deductive reasoning tells us they are good candidates to potentially become one of your best customers. Or in other words, “birds of a feather flock together”. Doesn’t marketing to those with a higher propensity or likelihood to become customers verses marketing to everyone make sense? The cost of acquiring a new customer will improve, contributing to an overall improvement in the return on marketing investment.

Getting Started
Whether you sell directly to consumers or to other businesses, there are several low-cost ways to get started. Assuming you already have a database of your customers and have some access to transactional or historical sales data, below are several approaches that with a little elbow grease will yield great results:

1. Use the Pareto Principle; “Roughly 80% of the effects come from 20% of the causes”. I used to work in the paper business (no, not Dunder Mifflin – but close) and one of the primary sales management tools was the “80/20 report” which simply showed us who our top clients were from a revenue and gross profit standpoint – ie where sales should be spending their time and attention. The inverse was also true – the accounts at the bottom of that report might be candidates for direct efforts to stimulate growth, or even all together pruning. Firing a bad customer is often worth more on the bottom line than landing a new one.

2. Use of a “20/50/30” approach to isolate the “best, middle, and worst” – this is an extension of the above and segmenting customers into three (or more) categories might enable more precise prescriptive actions per segment, drive pricing tiers, etc. My aforementioned experience in the paper business had an answer to this as well – all clients (client being defined as having a minimum number of purchases or a minimum value of purchases in a rolling 12 month window) were categorized as Platinum, Gold, Silver, Bronze and Lead, with new accounts and “up and comers” or those with high potential falling into the Nickel segment. This is a very eye-opening exercise, because depending on the metrics chosen to rank and segment, you may find that who you thought was a great client could be very average or worse yet unprofitable.

3. RFM Analysis (Recency, Frequency, Monetary) – This method will highlight several “groupings” of clients in a stack/rank fashion – see the sample RFM Analysis in Fig. 1 below. This type of analysis is especially valuable since it takes into account multiple factors such how recently a customer purchased, how often they purchase, and lastly how much they have spent. Those that find themselves at the top of this list, should find themselves at the top of your marketing list as well. I employed this method when working with a marketing service provider that focused on small businesses. We were able to create a list of 150 great clients that were on autopilot. By proactively engaging with them we saw an immediate increase of business from this group by simply offering them an incentive to “upgrade” to a higher level service package. They were already satisfied clients, we just needed to give them a reason to show us more love.

Fig. 1 Simplified RFM Analysis

Metrics for all three of these methods might include things like Revenue, Gross Profit, Number of orders, Average order size, and even returns, issue escalation, or other inbound requests. It depends on your industry, but these metrics along with questions like “Do the clients use self-service tools or are you providing full service to all clients?” can provide valuable insight into who your best (and most profitable) customers really are.

4. Product/Service Consumption Matrix – Lastly, another way to slice and dice your customers is to look at them from a product or service perspective to identify the products and services that are consumed by each client and isolate segments based on your ability to cross sell and up sell clients to expand your relationship with them.

Building on your Effort
So now that you have worked on one or more of the above methods for segmenting and ranking your customers, imagine taking a deeper look at the top performers based on 3rd party data like demographics, psychographics, and behavioral data to define the ideal criteria for who you should be prospecting – talk about super charging your marketing efforts. Demographics are things like age, income, home ownership, marital status, presence of children, ethnicity, etc. and can be very telling in and of themselves when looking at who your best prospects are. Psychograhics are more about the underlying motivations, values, interests, and attitudes of people, and these can add another layer of insight in determining a prospect’s intent or likelihood to respond. Lastly, behavioral data is available in many forms. This might be actual click stream data from your website or perhaps licensed data from third parties who aggregate point of sale data by SKU. For example, believe it or not, it is possible to identify individuals who are male homeowners with six-figure incomes, who travel for pleasure >5 times per year, and have purchased golf clubs in the last 6 months.

Sound like a great prospect for a golf getaway… When do we leave?

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