Posts Tagged ‘1-to-1 Marketing

01
Sep
08

B2B Loyalty – Best Practices

Here are the latest trends in B2B loyalty, technology and analytics that can help business build a bond with other other businesses:

How do you transform your company from a mere vendor into a valued partner? By building a loyalty platform on a strong foundation of customer data—and leveraging that platform to identify, understand and influence the consumer behind the account number.

Here are some best practices that you should consider:

IDENTIFY: People, not account numbers

Here’s a look at a few of the predominant models for identifying critical B2B contacts:

Give them some face time.

Jeff Hayzlett, Chief Business Development Officer for Eastman Kodak Company, is intimately familiar    with the B2B identification challenge.Given the vast variety of customer types, Eastman Kodak’s approach is to facilitate meetings and events with end users who value the chance to interact with the company on a personal level. Kodak’s annual Graphic Users Association Conference brings Kodak product managers and software developers face-to-face with their end-users, while a series of customer councils for publishers, commercial printers, and database marketers helps Kodak identify key decision-makers and influencers and give them tools to help them grow their businesses.

Use Web 2.0 tools—but warily.

One in three small-business owners now cultivate leads and choose suppliers based on recommendations from social-networking web sites such as Facebook or LinkedIn.”Increasingly, small-business owners are getting referrals and searching for supplier recommendations through their networks. Direct mail, newspaper and broadcast advertising are becoming less efficient mediums for reaching small businesses.”

UNDERSTAND: It’s the database, stupid

Once you have identified your sweet spot of small-business customers, the next step is to spend some time understanding their current behavior and comparing it to that of your best customers. Your goal is to isolate behavioral gaps that can be overcome with the right offer.

Treat your database like an asset.

B2B data degrades much more quickly than consumer data. While a consumer might keep the same email address for most of her adult life, a small-business buyer might change jobs, get a new title or return to the corporate world. That makes data refreshment a continual challenge.

Thou shalt not live on transactional data alone.

A 2008 Marketing Leadership Council study found that, because the cost of switching suppliers is higher and more complex in B2B, “attitudes”—in other words, the customer’s emotional connection to the brand—are often better indicators of B2B loyalty than pure transactional behavior. Small-business customers can look loyal in the transaction file, but a survey might find pockets of disgruntled customers who could benefit from an intervention.

Become a data conduit.

In the consumer world, data tends to flow one way, from the consumer to the database. B2B marketers, by contrast, can also learn a lot about their small-business customers by reversing the data stream. Small-business credit cardholders who lack accounting departments, for example, can benefit from information on their business purchases. AT&T Universal Business Rewards cardholders not only earn Citi ThankYou Rewards points on all purchases, but also gain access to a wealth of tools to help track and analyze business expenses.

Source: Colloquy

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01
Sep
08

Case Study: How Harbor Sweets uses customer data effectively

Harbor Sweets is a Massachusetts-based gourmet chocolate company that offers a variety of premium sweets. In 1973, the company emerged from humble beginnings when Ben Strohecker set out to create the “best piece of candy in the world.” The result was Sweet Sloops, a sailboat shaped piece of almond butter crunch, covered in white chocolate dipped in dark chocolate and crushed pecans. Over the years, the company grew to feature additional candy lines and retail outlets across the U.S. Harbor Sweets also added a significant mail-order catalog division.

Their catalog program was successful in delivering sales during key holiday buying seasons, but the company also wanted to ensure that holiday campaign mailings – the main driver of catalog business – were maximizing sales.Harbor Sweets needed a solution that would efficiently turn existing customer data into actionable next steps. Essentially, Harbor Sweets wanted to find out if removing a single mailing to “active customers” from the holiday mail schedule – which included mailings every month from September through December – would conserve marketing resources, while refraining from negatively impacting revenue or overall response rates.

Harbor Sweets conducted a suppression test, assessing how effective the holiday campaign mailings had been at driving sales. Harbor Sweets mailed the catalog to everyone in December and ran a suppression test for September, October and November. The results were surprising.Harbor Sweets was actually hurting sales by mailing too many catalogs to customers during the holiday season. The results also found that the cadence for the catalogs could be reduced to three, while still achieving similar results.

Additionally, Harbor Sweets learned firsthand that it is imperative to be open to analyzing data and customer behavior in new ways.The more information available on existing customers, the more effective the software is in its results, whether it is predicting customer’s next steps or customers at risk of defection.

The results allowed Harbor Sweet to develop a long-term marketing process for the future. The revenue saved by removing one mailing is now applied to another mailing during non-peak times to provide customers with a more effectively targeted, timely catalog.

Source: DM review

10
Aug
08

Building a customer-centric marketing organization(CCMO) – Marketing needs to lead this change

At Cequity, in many of the client engagements with CMOs across organizations, we always highlight the changing marketing environment, where the world of “monologue marketing” has shifted to “conversational marketing”. This necessitates in marketing departments an understanding of data, closed-loop marketing competency – leads to conversion to relationship integrated messaging and marketing measurement. Here’s an interesting article on this topic:

Many of today’s marketing organizations were built and optimized for a scenario in which they had nearly complete control over the consumption of messaging. Changes in technology and society however have dramatically altered this picture. Due to shrinking reachability, and greater addressability the control has shifted to the customer. To remain relevant, therefore, marketing organizations need to re-optimize around the reality of this changed environment.

To truly optimize, marketing organizations need to reinvent themselves from the ground-up.

Strategic Platform

The core foundation of the marketing organization needs to be remodeled around the customer. Organization structure, segment valuations, KPI’s, everything needs to be defined in terms of the customer.

Tactical Planning

Where the strategy piece was about establishing where you wanted to go, the tactics is about steering things on course. The hard part, of course, is figuring out what and where you need to measure to generate useful information critical for making the right adjustments. While analytics is clearly the center piece, user experience and insights also plays an important role in this stage. Together, these groups need to work together as a team to map out a course for continuous interaction improvements.

Execution

From an operational structure perspective the execution piece remains the most unchanged. It’s not so much the how, but rather the what that has changed. Messages will still be delivered multi-channel, but the content and plan behind the message will be radically altered.

A couple of generalized thoughts on this topic; First, content is going to explode. In the age of conversations, each interaction is going to need a much more refined, personalized piece of content. Not only is more content going to be created, but will need to be managed.

10
Aug
08

Why are you still waiting to automate your marketing programs?

Companies spends millions and millions of dollars running marketing programs to both acquire and retain customers. But, we do believe that in an increasingly multi-channel environment, companies will be able to realize multi-fold returns on their spends, only if they automate the marketing process. Erick Slack writes:

Perhaps the biggest stumbling block for companies debating whether to purchase a marketing-automation solution is the fear it will be a wasted investment. But if you’re a business leader, you should really be concerned with how marketing automation can increase sales. Whether you want to capture more leads, qualify the strength of leads or determine the value of leads after a marketing campaign, marketing automation can help, which inevitably results in higher sales numbers.

Integrated Marketing

Marketing-automation solutions integrate marketing and lead-management programs to improve their effectiveness. Criteria for determining the strength of leads can be combined with tools for permission-based emails, direct mail, customer surveys and market-research solutions to ensure that you’re targeting the right customers.

Improved Sales Opportunities

Marketing automation also helps ensure that sales and marketing departments are in harmony about how to achieve the desired increase in sales. The software can provide tools, research prospective leads and conduct personalized marketing campaigns. According to strategist and business adviser Jill Konrath, “The only way to capture the attention of corporate decision makers is to create a very personalized message based on in-depth research of their firm.”

Analyze Effectiveness

Marketing-automation software additionally helps you determine if your last marketing campaign was a boom or a bust. Whether a campaign is designed for short-term results or is part of a long-term strategy, you’ll have access to real-time information about all of your company’s marketing and lead-management efforts. Analytical tools give you the ability to track campaign success or failure, and can help companies create metrics and protocols for crafting consistently effective marketing campaigns. This results in more leads, which naturally boost sales.

Given these benefits, many companies have realized the value of automating their marketing campaigns and have proceeded to take action to show quick wins and expand, once a business case is built with the right ROI metrics.

10
Aug
08

How Harrah’s Entertainment translates customer data points into the big picture.

At Cequity, we have always believed that “earning points” in a loyalty program is a means to an end and not the end itself. Many companies fail to see the data from such programs holistically and tend to treat it too tactically leading to managing the points rather than an effective customer management strategy intent with which they started these programs. One of the few companies that have made this transition happen is Harrah’s Entertainment. Here’s what David Norton, CMO of Harrah’s Entertainment had to say:

Pointillism is a painting style in which the artist dabs small dots of primary colors on the canvas. Viewing the artwork at nose-distance, you see nothing but adjacent points. But step back, and suddenly you see Georges-Pierre Seurat’s A Sunday Afternoon on the Island of La Grande Jatte.

Analysis of customer behavioral and transactional data can similarly suffer from such granular myopia. Individual data points viewed without an overall perspective not only masks the larger view, it also blinds you to opportunity.

When I joined the company in 1998, we designated customers who played $400 in a given visit to one of our casinos as VIPs who received preferential treatment. But a customer who played $402 during one visit, triggering VIP treatment, might play only $398 on a subsequent visit and receive no such treatment. More importantly, customers who played only $50 a day but visited 50 times a year received no differentiated service at all.

As our goal is to see the total picture of a customer’s play with Harrah’s casinos, members earn credits across any one of our 12 casino brands. This feature not only benefits our members; it also allows us to measure their cross-market play. A third of our revenue comes from members playing in a property other than their home property—whether home is Las Vegas, Atlantic City, Reno, New Orleans or Tunica.

Our Total Rewards database also gives us unique insight into our customers’ total relationship with Harrah’s—including their non-gaming spend. Historically, Harrah’s Entertainment earned 80 percent of its revenue from gaming; our initial data analysis revealed that we received less than a third of our customers’ non-gaming budget. Once we acquired the Caesars Entertainment family of properties, however, non-gaming revenue—from hotel stays to fine dining to entertainment to shopping—became a significant portion of our business. Caesars Palace provides a strong gaming revenue stream from a relatively small number of VIP players, but many Caesars customers come to Vegas for non-gaming entertainment. We can now encourage non-gamers to use their Total Rewards card, for stays at Caesars Palace, trips to the spa and on our shows and still receive all the benefits of our loyalty program. Today, $2.1 billion of our revenue comes from non-gaming activity—and we want the total picture of those customer relationships too so we can customize their marketing and service interactions.

02
Aug
08

Loyalty data translates in better marketing

According to a Nielsen report on consumer insights, stronger and longer-lasting customer relationships can be achieved by a sound analysis of shopping behaviour, leading to targeted marketing programmes.

At Cequity, our belief is that loyalty marketers don’t really use their loyalty marketing data effectively for creating tangible business impact. Our belief is that loyalty data has to be effectively used in real-time(week after week in grocery retail or month after month in lifestyle, CD/IT retail) in target marketing campaigns to build ” value perception” & ” personalized service/rewards privileges” amongst loyal customers.

Take a look at what the Nielsen Report has to say:

Foundations of loyalty
In an increasingly competitive marketplace, companies that use their loyalty programmes to establish a deeper relationship with their customers are better positioned to prosper. Two foundational factors are especially important within any loyalty scheme:

  1. Maintaining good customer data with insights, which can be easily distributed throughout the organisation for decision-making;
  2. Developing a business culture that constantly looks for ways to improve programmes that benefit customers by applying shopper insights.

Creating a process for gathering insights, testing programmes and learning about customer response is important. While a few interesting facts about a cardholder’s household composition might come from the initial card application, such information and even deeper insights may also be derived by capturing sales history and assessing information about customers from transactional-level purchase data.

Sales data not only tells an analyst about additional family members in a cardholder’s household, but it also identifies opportunities to target the household more uniquely through a better understanding of preferences for specific categories, products and brands to satisfy the special needs of a child or any other household member.

Analytical models
Increasingly-sophisticated models also enable analysts to understand why customers shop, how they shop, what they buy and how sensitive they are to various price structures. If properly collected and assessed, sales data can point out everything from pets in the home to family health and nutrition needs. Analysis of the data becomes one way to answer those burning business questions:
· What do customers want?
· How can I keep them shopping in my stores?
· What opportunities exist to increase sales?

The data, analysis, and decision-making are only as good as the commitment by business leaders to continuously apply the insights to developing programmes that positively impact customer behaviour. This kind of transformational change and the impact it has on the enterprise takes time. If leadership embraces the use and application of customer data, the business will follow. Even then, the business must adapt in other ways.

Structural changes needed
Organisational and structural changes are required to re-align goals and incentives or develop planning processes that place a focus on the customer. The end result, however, works. Nielsen Loyalty has witnessed established retailer programmes achieve:

  • Sales effect increases of 1% to 5% in same store sales;
  • Loyal customer basket sales increases of 5% and 9%;
  • New customer retention rate increases from 20% to 40%;
  • Supplier funding for insight and communications rises from 0.05% to 0.1% of sales;
  • Promotional budget savings from 20% to 40%;
  • At least 75% of sales tracked at customer-item level.

Every aspect of a retail business and the interaction with supplier partners must embrace the needed changes for these levels of success to occur. It does not happen quickly, but the sooner the shift in focus occurs, the sooner all parties can begin trialling new solutions.

A good example
One North American retailer, well known for rewarding it best “Platinum Fans” customers, wanted to use its Loyalty card programme to further build customer affinity and grow sales. By all accounts, this grocery chain has earned some measure of success-achieving over 85% of sales on card by reinforcing a message of customer value, targeted offers, and special services. These loyal customers received periodic special in-store gift cards and coupons presented to them directly by the store manager for maintaining high loyalty thresholds.

02
Aug
08

Gearing-up for Mobile Number Portability(MNP)

In India, yesterday the Government has announced the deadline & a roadmap for Mobile Number Portability ( MNP). Cequity believes this is going to be an important challenge for telecom operators in India and there is a need for huge customer retention & targeted marketing efforts in gearing-up to this environment, as this is just a few months away.

Here’s is how South African Mobile operators have approached this challenge:

The introduction of Mobile Number Portability (MNP) enabled South African mobile phone service customers to retain their phone number when changing mobile service provider, this was expected to test customer loyalty and trigger far higher levels of churn, as it did in other countries that have already introduced number portability. Analysts believed that more than one-quarter of consumers (a predicted 27%) will change networks within one year of the service becoming available, and such predictions have ensured that customer retention is now firmly at the top of the agenda for the country’s mobile operators.

What drives churn?
Although particularly rife in fiercely competitive industries such as telecoms, customer churn is a significant problem that spares very few companies. The mobile communications industry in particular is largely product driven and price conscious – two traditionally strong reasons for runaway customer churn. But Moodley suggests that the main driver of churn may actually be service delivery, both in terms of customer service and network performance.

“Although it might appear otherwise, with price conscious customers clamouring for the latest and greatest handsets, these reasons tend to cancel themselves out in the age of hyper-consumerism,” said Moodley. “And products and service packages are quickly replicated by the competition anyway, so there is no real, enduring advantage from either.”

“The higher rates of churn will predominantly be from customers with existing complaints or reasons for wanting to move, simply taking advantage of MNP.”

Predictive modelling techniques based on empirical evidence and analytics can help find churn patterns. By combining a variety of mathematical techniques, including artificial neural networks, statistical regression, and decision trees, many SA mobile operators determine the propensity of any individual customer to cease doing business with a company within a given time period.

The results are often surprising: “You might be under the impression that customers want the latest phones or trendier outlets, but – for example – a large number of those leaving the network may have experienced a considerable number of dropped calls in the past six months.”

Analytical customer management strategies can certainly be helpful for mobile phone network operators because they have unusually rich transactional data, which allows very specific patterns and results to be identified.

Cequity View Point: Collaborative & iterative approach is the need of the hour

Continuous, easy & quick analysis will be very useful and to maximize the efforts of marketing, customer service, and other departments, data analysis has to work in a synergistic manner. Analytical insights must be effectively used by marketers to have an interactive “dialog” with their transactional data–and also allow a cross-functional team to review the latest data and create meaningful interactions with customers that are most at risk at any given time.

Better access to and understanding of customer data will help circle heads take informed decisions and help build better customer relationships. Faster cycle times can accelerate deeper understanding and improve time-to-market–both will be key to success in an increasingly competitive marketplace like India.

The key to effectively combating number portability related churn is a flexible and iterative approach.




At Cequity, we believe customer intelligence will be the biggest competitive advantage enterprises will have in the next decade or two. Successful enterprises of tomorrow will be the ones who can organize and leverage this information at speed to optimize their marketing performance, increase accountability, improve profit and deliver growth. Cequity insights will bring to you trends and insights in this area and it’s our way of sharing best practices so as to help you accelerate this culture and thinking in your organization.
September 2017
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