integrated strategies for customer loyalty and value optimization
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Presented By: David Azulay – The Kern Organization Judy Mitchell – The Kern Organization
Dan Ferguson – DIRECTV Karlene Swalley – Clearwire
Integrated Strategies for Customer Loyalty and
Value Optimization
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“This may seem simple, but you need to give customers what they want, not what you think they want. And, if you do this, people will keep coming back.”
- John Illhan, Entrepreneur and Founder of Crazy John's (Mobile phone retailer)
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According to research done by Bain & Company:
No company is immune to the pressures of the market.
But companies that focus on building loyal relationships… are better positioned to remain strong.
Consider the cost of serving a long-standing customer versus the cost of courting a new one…
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5% increase in customer retention produces more than a 25% increase in profit
Why?
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Customers often pay a premium to continue to do business, rather than switch to a competitor with whom
they are unfamiliar and uncomfortable
Return customers tend to buy more from a company over time, and as they do, the cost to serve them declines
Introductions
The Importance of a Customer Communications Strategy
Getting Started –10 Key Steps
Cases –DIRECTV & Clearwire
Moderated Panel Discussion
Q&A
Today’s Agenda
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Introducing Our Panelists
David Azulay Senior Vice President,
Client Services, The Kern Organization
Dan Ferguson Senior Director of
Marketing, DIRECTV
Judy Mitchell Vice President, Client Services,
The Kern Organization
Karlene Swalley Senior Customer Base Marketing
Manager, Clearwire
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The Importance of a Customer Communications Strategy
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Just as important to have retention strategy in place as acquisition strategy
It costs more to acquire a new customer than it does to keep one
Most customers want to be appreciated and thanked along the way for their business
Expectations are increasing. Customers expect their experience to be consistent, relevant and personalized at every touch point
Getting Started – 10 Key Steps 1. Know your objectives
2. Define methods of measurement and success metrics
3. Conduct a communications audit
4. Listen to your customers
5. Determine customer lifecycle phases
6. Define targets and messaging
7. Plot the journey
8. Set Test and Implementation Plans
9. Create a brand 10. Go to market and refine again
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Step 1: Know Your Objectives Primary –Should be quantifiable • Example: Increase revenues by 10%; Increase renewals or mitigate churn by xx% Secondary –Should be extensions of meeting primary goals • Example: Satisfied customers and advocates, which lead to increased purchases and increased revenues; increase customer opt in; generate buzz
Are these realistic? • Align costs and ROI to meeting your goals
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Step 2: Define Methods of Measurement and Success Metrics • Improved customer satisfaction scores • Positive testimonials • Lower churn rates • Increased revenue or purchases • New customer referrals • Higher online registrants • Other qualitative and quantitative measures?
– Always good to look at more than one 11
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Step 3: Conduct a Communications Audit
• Dedicate resources – commit 2-4 months
• Review all existing metrics
• Analyze impact of current touches on costs and revenues
• Perform competitive analysis
• Evaluate current offer library
• Build a map of existing communications to identify gaps/holes/opportunities to better address customer needs
• Result should enable specific plans by segment, customer type, etc.
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Step 3: Communications Audit Evaluate contact strategy variations based on customer segment
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What actions do you want prospective customers to take as they move through their relationship with you?
What channels are they likely to prefer?
What will define success for each type of dialogue?
Questions to ask yourself:
Be sure to make improvements based on findings
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Step 3: Communications Audit Evaluate All Touch Points
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Step 4: Listen to Your Customers • Use immediate feedback channels
– Surveys, one on one interviews, focus groups
• Build longer term feedback channels – Customer panels to contact regularly for feedback
• 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
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Risk Treat-ment
Step 4: Listen to Your Customers
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Step 4: Listen to Your Customers SURVEY FOLLOW UP TREATMENT
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Benefit EM 1
Reas
on 4
643210
Reas
on 1
Reas
on 2
Reas
on 3
Prod
ucts
Fina
ncia
lSe
rvice
re
late
dOt
her
Benefit EM 2
Benefit EM 3
Weekly
Landing Page
Offer EM
107 5
No openNo click
thruA
OBTM Offer
Reminder EM
“Call us -- we can help” & IBTM # EM
B
Reminder EM
A
B
No openNo click
thru
ValueEM 1
ValueEM 2
ValueEM 3
Test to determine effectiveness of
benefit communications
Roll into Loyalty if good response
Thank You, Tell us how we can
help EM
Thank You EM
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Step 5: Determine Customer Lifecycle Phases
Activation
On-boarding
Engagement
Adoption
Growth
Nurture Retention
Renewal
Loyalty
Churn Litigation
Winback
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Communications framework, data, investment &
measurement strategies need to be specific by phase
Step 5: Determine Customer Lifecycle Phases
Create specific strategies for each stage
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Investment Strategy Step 5: Customer Lifecycle Phases
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Based on your likelihood for good lifetime value and churn litigation, you can determine how much money to put into a campaign
Step 6: Define Targets and Messaging
• Know your strategy – Education, cross-sell, etc.
• Determine available data – Revenue, tenure, products purchased, etc
• Consider attributes for segmentation – Profile or model against most profitable customers to
identify opportunities within your base
• Personalize where possible – Targeted, personalized, relevant messages ensure
customer engagement for lifetime loyalty
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Step 6: Messaging Hierarchy Customer Segment
Benefits message
Product Features and Benefits
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Step 7: Plot the Journey
• Define key stages to reach customers – Before contract expiration – After 3 months of no purchase activity – On purchase or activation anniversary date
• Determine which targets are highest value to your organization to set frequency accordingly
• Test different formats and channels to get the most bang for your buck
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Step 8: Set Test and Implementation Plan
• Evaluate audiences that are most critical to impacting goals – Identify groups of customers that will move the needle on
your business most if more engaged – Identify best media mix to reach your audience
• Set revenue goals to make sure costs are offset and positive ROI is achieved
• Schedule implementation with enough time to read results accurately and rollout next steps
• An implementation plan will help ensure that no steps are overlooked and that each team member is clear on their role
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• Consider a “voice” for your communications so that all touches are consistent
• Make sure look and feel of touches are clearly from the same family of communications
– Informational, promotional, whatever the objective
• Carry the branding throughout the customer’s lifecycle even if touches are internally managed
in different groups – All touches should clearly be coming from one company
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Step 9: Create a Brand
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Step 9: Create Brand Incentives for Customers
Step 10: Go to Market and Refine
Build the communications map
Define the target to test against control
Measure results against objectives
Refine strategies to test again
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Case Studies
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Case Study: DIRECTV Building a New Customer On-Boarding Strategy
• The Business Problem – In 2008, DIRECTV found that the number of new customers that were
churning off the platform within their first 90 days was on the rise and communication weren’t consistent across the various internal groups
• The Solution – Launched project to create an on-boarding strategy – Executed the 10 key steps above beginning with setting
quantifiable objectives to: • Reduce churn and improve engagement • Increase customer satisfaction numbers • Improve installation experience
– Created an integrated multi-channel plan to reach customers via installers, email, direct mail, and phone during their first 30 days of service
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• The Results • In 2011, conducted a review and found an increase in all key metrics
including reduced churn and improved customer satisfaction
• Next Steps • Now building the 2.0 version to evolve to a hyper-customized
approach based on psychographic and lifestyle information to increase relevance – Asking key questions at registration to target messages – Respecting how customers want to be contacted – Creating a community online through a Welcome Center – Integrating the website into the experience rather than just sending
customers there
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Case Study: DIRECTV Building a New Customer
On-Boarding Strategy
Case Study: Clearwire Developing a Customer
Communications Program • Started with zero customers and had to develop
a plan • Closely aligned to 10 step process to develop a
CRM program • Set priorities and timeline • Internal mapping
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StrategyMaster™ Planning Process • Designed to help marketers make significant improvements to their
communication programs
• Will establish a visual strategic mapping framework to help manage tactical implementations of marketing activities aligned around specific strategies that have been determined to achieve the given goal(s)
• The first three steps within our strategic process include:
– Strategic planning – Visual mapping – Road mapping and prioritization of implementation plans
• The structure ensures the plan is rooted in activities that are focused on achieving the goals and objectives established
• Designed to ensure that the plan is adhered to, while being flexible to adapt to changing market conditions and shifts in strategic priorities
• Participation by key stakeholders and support teams is a critical component to the success of the planning process
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Need for Multi Channel Approach
• Only 20% of customers open one or more emails with weekly contact strategy
• Although DM 5X cost of EM – the CPS were the same opening up available universe and increasing the total number of reactivations DM had X times higher response rate DM had X times higher take rate
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Thank You Q&A
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