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March 8, 2006
Spend the Right Money on the Right Customers
Though this is going to sound like a self-evident truth, the implications will still confound many marketers. Here it is: all customers are NOT created equal. “Duh,” you say. For instance, a typical community bank will actually lose money on nearly 70% of its customers, yet they often still market to them all equally. (Now I’m not advocating that a customer should ever be treated less well based on the size of their account, but in terms of marketing dollars….)
Instead of trying to improve satisfaction for all customers at all Touchpoints, I believe that an organization must intimately understand the financial and satisfaction metrics associated with each individual audience segment.
One reason is that less valuable customers can often be served with less expensive Touchpoints that still make it easy to do business, increase overall satisfaction levels, and add value to each interaction with a customer.
To achieve a measurable return on your communications investments, your organization must intimately understand the needs and associated economics of each customer group throughout their Customer Relationship Lifecycle. This includes identifying the cost of acquisition, customer lifetime value, service and retention cost, purchase tendencies and other key metrics, for your customers.
With this data in hand, you can identify your most valuable existing and potential customers, and understand the metrics of your other customer segments as well. This will allow you to tailor appropriate offerings and service levels for each segment. If, for instance, a web-based transaction costs your organization $1, a telephone transaction $5 and an average in-person transaction $25, you can make better decisions on how to deploy resources knowledgeably, ensuring that all offerings, communications, and interactions are delivered at the highest appropriate level of quality for each audience.
Just as we believe that delivering a positive customer experience (at every Touchpoint, for every segment) is critical to broader relationship metrics, we also believe that service delivery and communications investments based on a given segments value is simply good business.
Comments (1) | Posted by MCorp. at 8:34 AM | Permalink
March 3, 2006
Promises Made Must be Kept
Brand Promise. Sounds good, doesn’t it? But what does it really mean to make and support these statements, and what is the cost of less-than-perfect delivery? In truth, achieving the outcomes that delivering on this can accomplish, requires near-flawless execution in making, delivering, keeping, and reinforcing the brand promise.
While appropriately positioning the organization and the development of a branding and messaging platform are critical first steps, there must also be steadfast, across-the-board organizational commitment to developing and implementing the structure, systems, and staffing needed to effectively deliver on the promise.
Our experience shows us that the benefits of making and keeping a brand promise are well worth it. Here’s a quick primer on our point-of-view:
Brand Messaging: Making the Promise. Your promise needs to be relevant, compelling, believable and achievable – and supported by the values that drive your organization – to make a deep connection with your target audiences.
Sales and Marketing: Delivering the Promise. The responsibility for delivering the promise message falls primarily on the sales and marketing team, while management and employees in the field deliver on the elements of the promise on a daily basis.
Operations: Keeping the Promise. Your success hinges on the competency and commitment of line staff, IT, call center, outsourced vendors, etc. to deliver on the promise at each Touchpoint. So much of your relationship with customers, and of your ability to keep your promises to them, will depend on the precise coordination and structure of your systems and staff. Leverage the processes, procedures and systems needed to effectively communicate with each other, and your customers will experience the positive results.
Feedback: Have we kept our promise? The only way to know that you are making, delivering, and keeping the right promises is to continually get feedback from your customers. Utilizing Customer Listening Tools can be qualitative and informal, or it can be a formal, quantitative process for measuring gaps between customer satisfaction, attitudes, and needs. Finally, processes must be in place for easily and systematically collecting, reviewing, and acting upon this feedback.
Those organizations that successfully connect with customers and deliver on a relevant promise reap huge, quantifiable benefits in areas such as retention, loyalty, NPV (“Net Present Value”) and LCV (“Lifetime Customer Value”). The flip side for those organizations which promise one thing, and deliver an experience that just doesn’t match up is the cynicism, increased churn, and reduced loyalty and satisfaction metrics which can negatively affect relationships with both internal (employees) and external (customers, analysts, partners, etc.) audiences.
Comments (0) | Posted by MCorp. at 8:27 AM | Permalink