The Importance of Being Earnest (with Data)
- ‘Rumpole of the Bailey’ DVD box set
- ‘The Beatles’ Rock Band PS3
- ‘Zulu’ on Blu-ray
- Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
- Tomy Octopals Bath Toy
What is this? I’ll tell you, it’s a list of the last five things I bought from Amazon!
- Sirloin steak
- Mixed salad
- Kellogg’s Bran flakes
- The Times
- Nurofen
What is it? The contents of my shopping basket and I’m on my way to the checkout. It’s a simple process, I just hand over my Amex card, my reward card and the job is done. And just before I came in, I used the same cards to pay for my petrol.
So where’s the rub? Well, if we fast forward a month or so, I will get ‘recommendations’ from Amazon – based, not only on what I’ve previously bought, not only what I’ve ‘viewed’ but also based on what other people who bought what I bought, have then gone on to buy!! Clever isn’t it? And then the lovely supermarket sends me some money-off vouchers for – wait for it – Fillet steak, own label Bran Flakes and Australian red wine (well something must have caused the headaches!).
In the data world, there is no emotion, no judgements, simply a set of binary transactions that it needs humans to write business rules and interpretations around. Of course it’s a bit more than just knowing I’m a closet Barrister, how I probably vote or what my likely household income is. In both cases the Retailer has built up a profile of me through the choices I make (and don’t make). My newspaper may hint at who I’m likely to vote for in an election and what kind of social demographic I fall into. My nightly purchases may indicate I’m single and the lack of nappies and baby food means it’s a safe bet I’ve no children under four. But hold on a minute – you bought the ‘Tomy Octopals Bath Toy’?? True – but it was for my nephew (age two) and simply a ‘rogue or unusual’ transaction as far as data trending is concerned.
Great lessons in how to use customer data, gathered through transactions, and then used to generate relevant, compelling offers. It’s an example of data mining and it’s used by more and more companies across the world. I’ll bet your supermarket/garage/High Street retailer does it, and it’s something you’ve probably bought into. But how do I, as a small B2B organisation, apply these strategies to my business?
In marketing, data mining’s used for quite a few purposes. Amongst other things, it can help companies identify their best prospects and segment their markets to personalise communications between themselves and the prospect. It can produce timely, relevant campaigns – reminding you that we’ve got a new version of the product you bought/lease finance you needed/coffee beans you use. It can also increase their cross-selling opportunities among existing customers, and help retain them. And it really is as easy as that – you hold all the data within your organisation – in spreadsheets, in Accounting systems, in CRM platforms, in website databases. So you know what customers have previously bought, what prospects and customers have viewed on your website, you know what they’ve clicked in your emarketing campaigns. You just need to access that information, pull it together, then use the information to create dynamic, relevant communication strategies for all your customers, both existing and potential. Simple in reality and in practice – it just needs an organisation to fully appreciate the value that can be generated by using data to properly profile and communicate with audiences.
How do you solve a problem like….CRM?
If I’m totally honest, I’m hardly being a visionary when I say that it’s strategically vital for all organisations to build customer loyalty and increase the ‘share of budget’ available? Research regularly tells us that the most significant increases in profitability are derived by increases in customer retention of as little as five per cent. Compare this to the cost of acquiring new customers – up to 10 times more than retaining an existing one!!. To my mind, it’s no surprise that Companies are focussing on customer retention strategies – often to the budgetary detriment of any new business acquisition programme. Getting the balance right is fundamental – May our effectiveness in retaining business be matched by a cost-efficient acquisition strategy!
My experience is that many companies felt they had ticked this particular box by implementing CRM ( customer relationship management) programmes. The investment made was considerable, the returns promised huge, but in practice the ROI metrics have not been delivered – and these metrics were largely predicated against customer retention and the increased revenue therein! So why is this? An effective CRM strategy comprises two elements –the first, deployment of an effective CRM technology. The second ( and IMHO the one on which organisations consistently fall down) is the strategic use of the CRM data to yield personalised, relevant, timely communications – via the optimal channel (s) – both on & offline. So many organisations concern themselves with new data when the real concern is not how much data they currently own or are able to obtain, but how to use the data effectively once they have it!
The net impact of this is a ‘double whammy’ – not only are organisations not making the returns they planned but they also risk losing long term customers through ignorance and an inability to address them with relevant communications.
The answer to this lies, not in a new technology , but in approaching the management of customer data differently and as the basis for the most basic of all CRM principles – “treating different customers differently”.
By using data to define Customer ( and prospect ) segments, by creating distinct and discrete content channels and by delivering this content across all media, we can accelerate the ROI by allowing businesses to drive profit through managing customer data to deliver intelligent marketing insight.
Dirty, dirty Data – necessary evil or the Fountain of Eternal Marketing youth?
Data seems to be coming to the fore again. In every context data forms the central part of every direct marketing campaign- be it off or online. In the ‘old days’ you had a very good reason to keep data clean and current – at the very least you saved the postage and production cost of your direct mail piece! With the advent of digital technology, have we as marketeers got lazy in our data hygience? It’s tempting to say yes, as many Organisations see online marketing as cheap, inpersonal and simply a cheap media choice. Yet those Companies that keep data clean, update email & postal addresses, capture interests, integrate with transactional knowledge ( who bought what & when) open the door to ‘Holy Grail’ marketing – the ability to create dynamic, personal and RELEVANT campaigns to every customer & prospect, every time. Little surprise that we see such high response and conversion rates for Clients where data is clean and the commuication is personally relevant. A check list of what you can do to keep data clean :
- Remove ‘unsubscribes’ from your data ( if you are one of our Clients this happens automatically)
- Download ’soft’ bounces and get them checked
- Capture all referrals and add them to your CRM data ( we frequently profile Organisations using this technique – it is amazingly powerful)
- Run an annual ‘cleansing’ – de-duplication, merging and updating data for incomplete,incorrect or missing fields, PAF files and against SIC code. This is a cheap service we provide but it repays the investment many times over.
- Integrate your web analytics with your CRM
What’s the easiest way to keep your revenue moving forward?
Since the beginning of the year, I’ve been involved in a whole lot more discussions with Clients ( and prospective Clients ) about revenue or business generation. My first question is always ‘ Are you maximising your relationships with your existing Customers?’ It seems an obvious point but so many organisations devote huge resources to attracting new customers without first identifying what they can do to retain and excite existing ones.
Its a well quoted fact – its 5 times easier to keep a customer than to attract a new one’. A recent peice of research by Bain and Co. gave a good insight into the impact of Customer retention. A 5% increase in retained customers leads to 75% increase in net customer value ( i.e. once you have stripped out the implied cost of winning a new customer). Secondly, organisations that implement successful customer retention programmes grow at 6 times the average rate.
A key part of servicing exisitng Clients is to understand them. We start off with a huge amount of actual knowledge – who they are, who the key decision makers are, what they’ve previously bought from us ( and when), what we’ve quoted for, who their other suppliers are etc. etc. The biggest challenge is accessing this information and turning it into usable data for communications. This information typically lies in : a finance system ( like Sage, Pegasus, SAP or Oracle ), a contact system ( like ACT, Maximiser, Goldmine, Outlook or even spreadsheets ) and most risky of all – in the heads of our Commercial staff. Just recently, I’ve noticed ( and we have won) a number of deals to bring this knowledge together and make it usable for the Organisation through the implementation of formal Customer Relationship Management ( CRM) programmes. This process gives one view of the Customer, enabling all and any Customer facing staff to see a full picture of a Customer – who they are, what they’ve bought, have they experienced problems before etc. etc.
Providing access to this level of information - both transactional and personal – allows us to engage with them on a ’1-2-1′ level with personalised e-campaigns, personalised web content and genuinely as a person whom we seek to understand.
As the economic situation tightens, I’m backing Companies which spend time understanding their customers and then communicate with them personally to ‘weather the storm’ and keep driving their revenues forwards.