Consumer Writes…
Filed under: Customer Relationship Management, Marketing Strategy, Uncategorized
It was 60 years ago that Bill Haley & ‘rock ‘n’ roll’ music created a generation gap between young people and their parents. Today, the use of digital media is creating a new generation gap – the digital “divide” – not just in accessibility but in how the generations use those technologies. The willingness to connect, and share, and ‘like’ enables brands to connect with consumers like never before – engaging in a true conversation. In this new world , there are very few physical or psychological barriers to trying new ways to do things, the Digital Generation epitomize the new mindset of the decade: digital media means everything is interconnected, anything goes, everything is available, and little is private. They are savvy, skilled shoppers, who place a high level of importance on individualism and personal involvement in the creation process. Helpfully, they are willing to share information and Brands must respond by providing members of the Digital Generation with the tools they need create or re-create content & products to suit themselves.
As the world continues to globalise and technology continues to evolve, the world for consumers will become more convenient than ever before in the history of retail. Technology will advance rapidly, customer service will be more convenient than instant coffee, personalisation will be instantaneous, and mobile marketing & commerce will find consumers wherever and whenever they desire. With social media marketing platforms marketers will capitalize on public information sprawled across Facebook, Twitter, other, as yet unknown platforms; brands will take consumer psychographics to the next level, knowing what we “like”, who our friends are, what we are thinking about, who we follow, where we go, and our daily consuming patterns. Utilising new tricks and combining it with traditional marketing promotion tactics such as: added value, cross sale, all inclusive promotions, ‘green’, health and lifestyle, convenience shopping, and now mobile location based services. Consumers no longer shop for products; brands will go shopping for consumers.
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.