The Case for Customer Lifetime Value…


Just when things were going great…

Not long ago, I praised a certain  Big Satellite Company  for the outstanding customer experience I had when moving across town (despite some other shortcomings – full article here).  This past month, with a single billing related event, Big Satellite Company almost destroyed our relationship forever.  Let me tell you a story.

Thirteen years ago

As cable TV was riding high and the internet was still a baby, I placed a bet on who I wanted to deliver television content to my home.  Primarily due to the exclusive availability of a certain sports programming package, my bet was placed on (what is now) Big Satellite Company.  For over a decade, through four moves in two states, my chosen television delivery partner provided a fantastic experience in all facets of our relationship, to include my most recent move (full article here).

This year, as a result of some uncertainty with the professional sports league featured in the programming package, Big Satellite Company made a wise move (in my opinion) by not automatically renewing customer subscriptions for this package until the leagues disputes were settled.  However, once resolved, subscribers like myself were forced to contact Big Satellite Company and re-subscribe to the package.  This was not the end of the world assuming I was able to simply renew the subscription, at the previously established renewal rate.

Herein lies the rub

As I prepared to renew the programming package, the pricing I was offered via the website was approximately $85.00 more than what I had paid for previous seasons.  I contacted the customer service center via telephone and was offered a statement credit of $5.00 per month for the next 12 months.  That still left us $25.00 apart from what I felt was fair.  As I was on the telephone, I looked into my account billing history, and proceeded to inform the service agent that as a 13-year subscriber, my customer lifetime value to date exceeded $23,000 and I asked her if she was prepared to let me walk over $25.00?  She responded with a counter offer of additional free services and content, and ultimately got us to where we were only $5.00 apart.  I asked again, are you ready to let me walk over $5.00?  She was.  At this point, I decided to perform an experiment by NOT asking for a supervisor and simply saying “no thank you”.

Everyone who heard this story said “you should have asked for a supervisor, you would have gotten what you wanted” – to this I say, the companies to which we send our hard-earned money in exchange for services, need to have more respect for their customers. The protocol for solving a customer problem should never end with the customer leaving.  I argue that the customer service agent should have proactively escalated me to a supervisor with more authority as opposed to letting me walk.  Most consumer technology services companies (i.e. phone, TV, internet) seem to be in a customer acquisition arms race, as opposed to focusing on serving the customers they already have.

So how does the story end?

Last week, approximately 3 weeks after the incident described above, I was contacted by a “manager” from Big Satellite Company who proceeded to offer me the desired programming package renewal, discounted beyond what I paid in the previous years, plus the additional services and content from the previous negotiation.  Apparently he is one guy who knows it is cheaper to keep a customer than acquire a new one – it’s a shame it took 3 weeks to escalate through the CRM system.  This could have easily been avoided if Big Satellite Company had a robust customer segmentation system and armed the customer service agents with a well thought out “next best offer” strategy for retention of key accounts – maybe even immediately pushing my call to a more senior or experienced agent given my tenure and status.

Have you had a similar experience?  Or is your company losing customers faster than you can acquire them?

Tell me about it.

Did you know that I have now posted more than 30 articles on this blog?  If you read and enjoy the content, please don’t be afraid to Comment, Share, Like, Tweet, +1, or whatever you do.  I would greatly appreciate the feedback.

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!

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.

The Data Dilemma: Mining, Privacy, and Other Concerns


Xplor Lunch & Learn Series

I will be a panelist on the Xplor.org Lunch & Learn webinar scheduled for August 19th. The topic is “The Data Dilemma: Mining, Privacy, and Other Concerns”

Space is limited, so reserve your Webinar seat now at:
https://www2.gotomeeting.com/register/485313730

We’re all encouraged to make our marketing more relevant, add personalized marketing to transaction documents, and target direct mail more strategically. That requires using data, and that gives some people pause. Especially privacy advocates. What do you really need to know before you jump in the pool?

Our panel will include industry experts and will be hosted by Pat McGrew of Kodak.

Title: The Data Dilemma: Mining, Privacy, and Other Concerns

Date: Thursday, August 19, 2010

Time: 1:00 PM – 2:00 PM EDT

After registering you will receive a confirmation email containing information about joining the Webinar.

System Requirements
PC-based attendees
Required: Windows® 7, Vista, XP, 2003 Server or 2000

Macintosh®-based attendees
Required: Mac OS® X 10.4.11 (Tiger®) or newer

“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?


Even Girl Scouts get it when it comes to sales & marketing…


I ran across this blog post and wanted to share.  The author took what every good business does (or should do) and adapted it for a group of Girl Scouts to execute and suceed – enjoy:

http://frombehindthepen.wordpress.com/2010/06/02/girl-scouts-thinking-outside-of-the-cookie-box-using-7-simple-marketing-strategies/

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