Retain Customers and Increase ROI

While doing research for my presentation at this year’s DMA Annual Conference in Chicago, I came across some really surprising data. According to the 2013 Cross-Channel Marketing Report, published by Econsultancy in association with Responsys, 70% of those surveyed agree that retaining a customer is cheaper than acquiring a new one. Yet only 30% of companies are very committed to relationship marketing. In fact, 22% of companies don’t conduct relationship marketing at all. They cite technology limitations, no clearly defined strategies and lack of resources as some of the main reasons for not having a plan.

Given the importance of keeping customers and a shift in many companies from concentrating solely on acquisition to more focus on customers and lifetime value (LTV), having a customer communications plan is imperative. Customers are demanding more and expect their experiences to be consistent, relevant and personalized at every touchpoint.

The eight steps below are simply a guide to get you either started or on your way to an improved plan. Look at each step and determine what you can do now versus what might need to wait until later. Every little bit counts toward retaining customers and increasing revenue and ROI.

  1. Know your objectives and success metrics—Make sure your primary objectives are quantifiable. (For example: Increase revenues by XX%; increase renewals or mitigate churn by XX%.) Also, be sure that your secondary objectives are extensions of meeting primary goals. (For example: Satisfied customers and advocates, which lead to increased purchases and increased revenues, increased customer opt-in and generated buzz.) Plus, it’s important to ask yourself if the metrics are realistic and measurable. Assuming they are attainable, make sure you are tracking and reporting on progress.
  2. Conduct a communications auditThere are five key steps to a communications audit. Once you complete these steps, insights should enable development of specific plans/maps by segment, customer type, etc. The steps are:
    1. Build a map of existing communications to identify gaps and opportunities.
    2. Review all existing communication metrics (open rates, response rates, etc.).
    3. Evaluate (or build) a library of current offers.
    4. Analyze the impact of current touches on goals, costs and revenues.
    5. Perform a comprehensive competitive analysis.
  3. Listen to your customersThis may sound simple, but you need to make sure you’re really listening and then acting on what you hear. Use immediate feedback channels, such as surveys, one-on-one interviews and focus groups. And build longer-term feedback channels, such as customer panels and advocates, to help increase engagement. Be sure that you are continuously monitoring all customer channels and be prepared to act on the information you hear. Customers appreciate being asked for their feedback, but expectations are that their opinion will be taken into account.
  4. Determine customer segmentation and investment strategies—Use available customer data (transactional, revenue, tenure) to determine your investment, for both frequency of communication and richness of offer. For example, you might look at LTV and churn risk to determine your spend and touch strategies.
  5. Plot customer life-cycle phases and timingDepending on your business type, number of products, contract term, maturity, etc., you may have different life-cycle touchpoints for your customers. At the outset of developing a plan, you need to look at your communications framework, data, investment and measurement strategies by phase. For example, your objectives and strategies for activation will likely be different than those for nurture, renewal or winback.
  6. Define messaging strategyThink about how you want to talk to your customers, what you want to look like and what you want customers to take away. By creating a brand or voice for your communications, you can ensure that all touches are consistent and that the brand is being carried through the customer’s lifecycle, even if touches are internally managed by different groups. It’s also important to make sure the communication objective of each message is being met (e.g., cross-sell, educate, up-sell, etc.). Don’t forget to personalize where possible and speak to customers where they want to be spoken to. Targeted, personalized, relevant messages ensure customer engagement for lifetime loyalty.
  7. Set up test and implementation road mapsThe process of setting up a customer communications plan can be overwhelming, especially if there is no plan in place and no support of a customer plan. An implementation plan can help ensure that no steps are overlooked and that each team member is clear on their role. Since participation by key stakeholders and support teams is a critical component to the success of the implementation process, outlining the tasks at hand and how they will get done is a great starting point. It also allows you to build in milestones and checkpoints after key steps and manage the schedule with enough time to read results accurately and roll out the next steps.
  8. Go to market and refineNow that you’ve set a plan in motion, you’ll need a structure to ensure the plan is focused on achieving the goals, while allowing enough flexibility to adapt to changing market conditions and shifts in strategic priorities. Creating a strategic map will provide you with a blueprint to consistently track your progress, build out tactical briefs, and test and learn so you can optimize for success.

Several KERN clients have used this eight-step process to build or refine their customer communications strategies and to put plans in place. If you need help or want more information, just let me know!

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