Erin McCarthy, SourceLink Consultative Analyst, Customer Intelligence,
Sep 25, 2012
“I’m a Capricorn. I enjoy candlelit dinners, long walks on the beach and response modeling for customer acquisition.” If I could count how many times I’ve heard that on a first date… Well, turns out that your relationship status and Customer Intelligence campaigns have a LOT more in common than you’d think!
Without a doubt, response models are powerful tools to grow your customer base, but in the world of customer relationship marketing, the response model is just the first date. Your modeling activities should not stop with response modeling. Many companies fail to take that next step towards long term relationship commitment with their customers. If you want your customer relationships to last, you will need to invest in something beyond the first date. For a healthy, long term relationship use this as a check list to assess your customer relationship health.
Building the Relationship
So, you’re past the first date and have acquired a new customer. What are your next steps? What are you doing to grow and solidify the relationship? According to an August 2012 Forrester Research Inc. report (The State of Customer Analytics 2012), remarkably few companies (14%) prioritize Customer Onboarding Analytics. Do you have special steps, offers, or programs for new customers? Have you leveraged (1) Next Product to Purchase & Upsell Models to identify the best products for cross-sell / up-sell efforts? Do you have (2) New Customer Trigger Campaigns based on time elapsed, rules based, or model based criteria? Do you use (3) Average Order Models to increase the size of the order? Have you built (4) Lifetime Value or High Activity Models to identify high potential groups?
Nurturing the Relationship
Several years have gone by and the relationship is cruising on auto pilot. What are you doing to keep the romance alive? Have you set goals to increase the (5) Number of Products per Household? Have you identified, developed and actively promoted (6) Sticky Products & Services that increase retention? Do you have a robust set of (7) Event Trigger Campaigns based on transactional or life event triggers? Have you built a custom (8) Customer Segmentation to better understand your customer’s needs and market to clusters with similar needs or preferences? Are you taking steps to move towards (9) 1:1 Marketing by using digital variable print and (10) Multivariate Testing?
Are We Exclusive?
In your customer relationships, a little bit of jealousy is a good thing. Is your relationship exclusive? Do you measure and track (11) Market Share and (12) Share of Wallet as part of your KPIs?
Don’t Be Blindsided By the Breakup
Customers almost always give you signs that they are considering leaving you. Do you have goals for increased retention / reduced attrition? Have you built and leveraged (13) Attrition Models? Have you identified key sequences or activities that indicate a potential attrition and built (14) Attrition Trigger Campaigns to prevent defection before it happens? When you consider cost per acquisition, it makes a lot of business sense to make every effort to retain the customer who is telling you directly, or indirectly through their actions, that they are leaving. Your front line employees, or dedicated retention teams, should be trained and empowered in retention strategies.
I WANT YOU BACK…..PLEASE
Do you have an active win-back strategy in place targeting lost or lapsed customers? Do you send them communications that you miss them, want them back, will keep the light on for them? If they are truly gone, do you build (15) Lapsed/Reactivation Models? Re-activation is often much less costly than pure acquisition efforts. You have a lot invested in the relationship. Don’t give up without a fight…
As with any relationship, a long term customer relationship takes energy, resources and a concerted effort to keep it running smoothly. If your modeling is limited to response modeling, consider beefing up your repertoire before you find yourself changing your status to “It’s Complicated.”
How Healthy is Your Relationship (Marketing Program)?
Out of the 15 item check list, how many did you check?
1-3 ~ SHORT TERM FLING. You should consider adding some depth to your bag of tricks or this relationship won’t last long!
4-7 ~ ENGAGED. You have taken some serious steps to making this relationship last. The ball’s in your court to keep up the momentum. Why not seal the deal and round out the relationship with some advanced analytics for lasting results?
8-13 ~ COMMITED. You have done what is needed to build a solid foundation for permanent success. Go ahead, get creative, and push the envelope for Best in Class marketing.
13-15 ~ TRUE ROMANCE. You are a true romantic. Your customers are likely to be very satisfied and in the relationship for the long haul.
See where you rank on this love-o-meter, and feel free to share in the comments box below!