Omnichannel Customers Are 2X as Valuable – How to Make Them Yours

With so many trying to sort out an “omnichannel” marketing strategy, I thought it would make the most sense this month to provide some structure around what it is, the best way to take the “buzz” out of the term, and provide a framework for thinking strategically about this new mandate in marketing and strategy. For starters, here’s a simple idea, or “true north,” you can use to drive your own marketing strategy as you embrace the omnichannel consumer. “Put the Customer First” and build your “omnichannel strategy” around them.

With so many trying to sort out an “omnichannel” marketing strategy, I thought it would make the most sense this month to provide some structure around what it is, the best way to take the “buzz” out of the term, and provide a framework for thinking strategically about this new mandate in marketing and strategy.

For starters, here’s a simple idea, or “true north,” you can use to drive your own marketing strategy as you embrace the omnichannel consumer. “Put the Customer First” and build your “omnichannel strategy” around them.

Let’s remember, connecting with, engaging and finding the right new customers are where customer value is created and realized in omnichannel marketing. Optimizing that value comes through studying and tuning communications, improving your relevance and becoming more creatively authentic, not in the boardroom, but in the eyes of your customer.

Today, marketers appreciate that consumers engage on multiple platforms, devices and channels—the ones they want, when they want. With mobile devices being a spontaneous window into their thoughts and an outlet for their wants and needs as they arise. What’s a bit more subtle and more often missed is the objective and capability to respect the way your customers choose to engage and buy across them in a scalable manner—as it will either fragment their relationship with your brand or galvanize it.

Consider Kohls. Not exactly a high tech player in most folks’ minds. However they now deliver an omnichannel experience that deepens relationships with them. Recently, my wife received a promotion by direct mail (I doubt if she remembers when they asked for her phone number the first time, making the connection between the POS and her online purchases), she had it in hand as she went to the website to browse. Later, she used another promotion from her email right at the POS with her iPhone.

In a single engagement with the brand, she hopped across three channels, not including a customer service call by phone. As a consumer, she didn’t even notice—she just expected it to work.

Similarly, OpenTable will consistently get you to a good restaurant based on where you’ve dined before, and what your current online browsing and mobile location is. You probably do it all the time. Your relationship with that brand hops between mobile, desktop and point of sale effortlessly—but as a consumer, you’re not exactly impressed: You expect it to work.

As a result, effective omnichannel organizations have become “stitched into” the lifestyles of their customers. Moreover, this supports the creation of competitive advantage in the measurable, trackable, digital age.

Omnichannel Means Understanding the Customer
Putting the customer first obviates really knowing and understanding your customer in more meaningful and actionable ways. Not just with an anecdote of the “average customer,” but with legitimate, fact-based methods that are built on a statistical and logical foundation. This is the basis for the “absolute truth” that your omnichannel source is dependent on.

This, too, is no small task for many organizations, but it’s becoming more “doable.” And it has to be—because your competition is thinking and investing in this path, and it’s not a long-term, viable position to not have an actionable strategy to miss the boat on knowing your customer in a way that is valuable, actionable and profitable.

But first, let’s clear up some of the confusion that we’ve been hearing for at least a year now: Is omnichannel more than the buzzword of 2015, or is it something much more important?

Multichannel
At the most basic level, “multi” means many. As soon as you adopted your second or third channel, be it a catalog or an e-commerce website, your organization became a multichannel organization. Multichannel came quickly—as it’s not uncommon that the majority of a customer base has made a purchase across more than one channel—whether you have that resolution or not is another matter, and often requires a smarter approach to collection.

Digital growth is accelerating channel expansion. With the explosion of online and digital channels and the rapid adoption of mobile smartphones, tablets and now wearables, digital can no longer be viewed as a single channel. We now have the merging and proliferation of digital, physical and traditional channels.

Many marketers have experienced as much challenge in juggling an increasing number of channels as there is opportunity. But digital channels, of course, are more measurable and challenge the traditional approaches by bringing a greater resolution and visibility for some, and confusion for others.

Key factors in leveraging, managing, and maximizing those channels include:

  • Competencies developed in the organization
  • Identifying third-party competencies, especially in digital partnerships
  • The culture of the organization
  • Support for change and innovation in marketing
  • The depth of technical capability in an organization

As channel usage expands, data assets “pile up,” though most of the data in its raw format is of limited practical use and less actionable as one would hope. From the inside of dozens of IT organizations, the refrain is common; “We’re just capturing everything right now.” Creating marketing value would require strategists and the business units.

Omnichannel Is the Way Forward
While most organizations are still working through mastering their channels and the data they perpetually generate, the next wave of both competitive advantage and threats have come with them. The customer learns what works for them relatively quickly and easily, adopting new channels and buying where they want, how they want. Those touches are often lower touch, and introduce intermediaries, and are surrounded by contextual advertising, often from competitors.

Omnichannel buyers aren’t just more complex, they are substantially more valuable. We’ve seen them be as much as twice as valuable as those whose relationship is on a single channel. Perhaps this a reflection of the greater engagement with the brand.

Delivering that omnichannel experience will require more thought, focus and expertise than before. It requires the integration of systems, apps and experiences in a way that’s meaningful—to the customer—and that of course requires an integration of the data about those purchases and experiences.

To serve the business, the Omnichannel Readiness Process has six components, each of which require thoughtful consideration:

1. Capture—many organizations are aware that they need to capture “the data.” The challenge here is shifting to what to capture, and what they may be missing. The key challenge is: It’s impossible to capture “everything” without understanding how it can and should be used and leveraged. How that data is captured in terms of format and organization is of great importance.

2. Consolidate—In order to act on the omnichannel reality, we must have all our data in one place. In the ongoing effort to find the balance between cost, speed and value, “silos” have been built to house various data components. Those data sources must be consolidated through a process that is not quite trivial if those data sources are to create value in the customer experience and over the customer lifetime.

3. Enhance—Even after we’ve pulled our data together into an intelligent framework and model, built to support the business needs, virtually every marketer is missing data that consumers generally don’t provide, or don’t provide reliably on a self-reported basis. “Completing the customer record” requires planning and investing in appropriate third-party data. This will be a requirement if we’re to utilize tools and technology to mine for opportunity in our customer base.

4. Transform—much of the data we need to perform the kinds of analysis and create the kinds of communication that maximize response now, and the customer value over time, utilizes the derivation of new data points from the data you already have. Here is one example: Inter-order purchase time. Calculating the number of days between purchases for every customer in your base allows you to see whose purchase cadences are similar, faster, slower or in decline. On average, we’ll derive hundreds of such fields. This is one example of how a marketer can “mine” data for evidence of opportunity worth acting on and investing in.

5. Summarize—The richest view of a customer with the best data in its most complete state is a lot to digest. So to help make it actionable, we must roll it up into logical and valuable cohorts and components. Call them what you will—segments, personas or models—they are derivative groups that have value and potential that you can act on and learn from.

Many marketers traditionally spend 80 percent to 90 percent of their time and effort on getting their data to a point where it serves both the omnichannel customer and their brand. However, marketers can do better with emerging tools and technologies.There is no replacement for solid data strategy that is built around the customer, but efficiencies can be gained that speed time-to-value in an omnichannel environment.

6. Communicate—The prep work has been done, you’ve found the pockets of opportunity, now it’s time to deliver on the expectations the omnichannel customer holds for marketers. At this juncture, we need to quickly craft and deploy messages that resonate in ways consumers will think about their situation and your brand. They must address the concerns they have and the desires and opportunities they tend to perceive.

Omnichannel customers expect you will recognize them for their loyalty and their engagement with your brand at multiple levels, and that those experiences will be tailored in small ways that can make a bigger difference.

They expect your story to better-fit with their own, if not complete it. That sounds like a dramatic promise, but the ability to know your customers and engage them in the way they prefer, and at scale, is upon us.

Keep It Relevant to Your Business
This entire process must include of course, the answers to key business questions about the types of discoveries we’d make and questions we’d answer with it—for example, does the Web cannibalize our traditional channels? (Hint: It surely doesn’t have to).

That said, we’ve learned to start with the most basic questions—and are not surprised when there are no robust answers:

1. How many customers do you have today?

2. Do you have a working definition of a High Value or Most Valuable Customer?

3. If so, how many of those customers do you have?

4. How many customers did you gain this past quarter? How many did you lose?

a. Assuming you know how many you lost, what was the working definition of a lost customer?

5. How many customers have bought more than once?

6. What’s the value of your “average” customer, understanding that averages are misleading and synthetic numbers are not to be trusted? But we can measure where other customers are in terms of their distance from the mean.

7. Who paid full price? Who bought at discount? Who did both? How many of all the above?

8. For those who bought “down-market,” did they trade up?

9. How many times does a customer or logical customer group (let’s call them “segments,” for now) buy? How long, on average, is it between their purchases? And the order sizes, all channels included?

10. All this, of course, gets back to understanding more deeply, “Who is your customer?” While all this information about how they engage and buy from us is powerful, how old are they? Where are they from? What is relevant to them?

Now, even if a marketer could get the answers to all of these questions, how does this relate to this “Omnichannel” Evolution?

Simple. It only relates to your customer. Of course, they are the most important actors in this business of marketing—in fact in the business of business. What this really means is deceptively simple, often overlooked, and awesomely powerful:

Omnichannel Is Singularly Focused on Customers, Not Channels
It’s about the customer, and having the resources, data and insights at your disposal to serve that customer better. Virtually all of your customers are “multichannel” already. Granted, some are more dominantly influenced by a single channel. For example, online through the voice of the “crowd.” But even then, the point of omnichannel only means one thing: Know your customers across all the channels on which they engage with you. Note the chasm between having the dexterity to examine and serve customers across all the channels, and just knowing their transactions, behaviors or directional, qualitative descriptors.

So “knowing the customer” really means having ready access to actionable customer data. Think about it. If your understanding of your customer data isn’t actionable, how well do you really know your customer in the first place?

Considering the 10 questions above, and evaluating the answers in terms of the most important questions about your customers, is a solid starting point.

When you’ve worked through all of these, you’re now ready to create experiences and communications for customers that are not only relevant, but valuable—to your customer and to the business.

When you’re adding value and are channel-agnostic, as you must become, you’ve achieved the coveted omnichannel distinction that market leaders are bringing to bear already.

Not only is this an impressive accomplishment professionally, it surely is—but remember—it’s the customer we have to impress.

Bad Thing! Or Why Segmentation by Consumer Attitudes May Be Dangerous

For years, B-to-B and B-to-C marketers have relied on attitudinal segmentation research to help them group their current customer base, and potential customers as well, for communication, promotion, marketing and experience initiatives. The thesis has been that, by asking a small, but meaningful, set of attitudinal questions, they would be able to develop an index, algorithm or framework equation that ranked these consumers by propensity to buy, both near-term and long-term.

For years, B-to-B and B-to-C marketers have relied on attitudinal segmentation research to help them group their current customer base, and potential customers as well, for communication, promotion, marketing and experience initiatives. The thesis has been that, by asking a small, but meaningful, set of attitudinal questions, they would be able to develop an index, algorithm or framework equation that ranked these consumers by propensity to buy, both near-term and long-term.

These frameworks—they’re arithmetic, so we can’t call them “models”—typically include questions regarding the importance of elements like value for money, acting with the consumer’s interests in mind, credit and payment terms, having knowledgeable employees, offering products which will meet the consumer’s needs, and the like. From these questions, basic segment categorization can be determined; and, once these three, four or five segments are established, we’ve often seen marketers go on to build assumptive plans and conduct further, more detailed, research around them.

The goal of these approaches is to produce attitudinal segments, which the questions can predict with high accuracy, often in the 80 percent or 90 percent range. This creates what economists would call a “post hoc ergo propter hoc” situation, Latin for “after this; therefore, because of this.” It is a logical fallacy, essentially saying that A occurred (the responses to the attitudinal questions); and then B occurred (the cuts, or segments, of consumers). Thus, A caused B. Once the B, or segment creation, stage has been established, further fallacies, such as creating reliable marketing, operational and experiential strategies around these supposed propensities, can be built. It’s a classic situation, where correlation is thought to be the same as causation. As your economics or stat professors may have told you, correlation and causation are far from being identical concepts.

As a consultant and analyst, I’ve seen this result of this application of research and analytics play out on a firsthand basis on multiple occasions. Here’s a recent one. A client in the retail office products market had been using an attitudinally derived element importance question framework for small business market segmentation purposes. The segment assumptions went unquestioned until followup qualitative research was conducted to better shape and target their planned marketing and operational initiatives. Importance of certain products and reliable service were identified in the research as key areas of focus and opportunity for the office products retailer; but, in the qualitative research, power of both focus areas appeared, anecdotally, to be consistent across all segments. And, even though implied supplier roles were suggested to build purchases, this was much more “leap of faith”-based on the established quantitative research segment personas than actual qualitative research findings.

There are related issues with what we can describe as quasi-behavioral measures, such as single question metrics (likelihood to recommend to a friend or colleague or the amount of service effort required on the part of a consumer); or traditional customer loyalty indices (where future purchase intent is included, but also attitudinal questions such as overall satisfaction). It’s not that they don’t offer some segmentation guidance. They do—on a macro or global level; but they tend to be less effective on a granular level, especially where elements of customer touchpoint experience are involved.

And, they tend to have limitations as predictors of segment behavior, a key business outcome for marketers and operations management. When compared to research and analysis techniques, such as customer advocacy and customer brand-bonding, which are contemporary, real-world frameworks built on actual customer experience—high satisfaction scores, high index scores and high net recommendation scores produced likely future purchase results (in studies across multiple industries) which were often 50 percent to 75 percent lower than advocacy or brand bonding frameworks. I’d be happy to provide proof for anyone interested in reviewing the findings.

So, that’s the scenario. The challenge, and potential danger, for marketers and those responsible for optimizing customer experience is that these attitudinal and quasi-behavioral questions are just that—attitudes and quasi-behaviors. Attitudes are fairly superficial feelings, and tend to be both tactical and reactive. And, because they are so transitory, their predictive value is often unstable and unreliable. Quasi-behaviors are also open to many similar challenges. More importantly, attitudes and quasi-behaviors are not behaviors, such as high probability downstream purchase intent based on actual previous purchase, evidence of positive and negative word-of-mouth about a brand based on prior personal experience, and brand favorability level based on experience. These are especially valuable in understanding competitive set, and they have real, and very stable, predictive and analytical value for marketers.

As Jaggers, the lawyer, said to Pip in Charles Dickens’, “Great Expectations,” take nothing on its looks; take everything on evidence. There’s no better rule.” For marketers, that’s excellent shorthand for taking everything on behavior, and perceptions based on documented personal experience, rather than attitudes and quasi-behaviors.

4 Attribution Models in the Age of Big Data

For marketers, attribution is the Holy Grail. For those unfamiliar with the term, attribution means determining what marketing channel or budget was responsible for generating a particular action. Without proper attribution, it’s pretty darn difficult to perform any kind of meaningful ROI calculations on your marketing spend. In fact, I wrote another post about attribution earlier this year or so ago titled “The ‘A’ Word—Learn It, Love It, Live It!,” which pointed out that in today’s marketing world, attribution isn’t always what it’s cracked up to be.

For marketers, attribution is the Holy Grail. For those unfamiliar with the term, attribution means determining what marketing channel or budget was responsible for generating a particular action. Without proper attribution, it’s pretty darn difficult to perform any kind of meaningful ROI calculations on your marketing spend. In fact, I wrote another post about attribution earlier this year or so ago titled “The ‘A’ Word—Learn It, Love It, Live It!,” which pointed out that in today’s marketing world, attribution isn’t always what it’s cracked up to be.

Now it’s no secret that attribution analysis is rather difficult to perform in an age of proliferating media, multichannel customers and, drum roll … Big Data. Think about it, how do you gauge which marketing channel was responsible for generating a sale when a customer was sent and read an email, received a direct mail piece and visited a microsite, Googled the company name and found the homepage, but clicked on a sponsored link leading to a landing page, went to and Liked a Facebook page, became a follower on Twitter, tweeted about it to his friends … and ultimately made a purchase using an App on an iPhone. Which channel gets credit? Email, direct mail, organic SEO, mobile, social? All of them? None of them? Some of them? It’s enough to make your head spin.

Now enter Big Data. In this column, I’ve written extensively about the challenge to marketers posed by Big Data. I know, it’s the meme du jour … seems like you read about it everywhere you go these days. Basically, Big Data is the massive accumulation of information that’s taking place across organizations as they market and engage with their customers and prospects across an ever-expanding proliferation of channels.

As customers and prospects interact with firms across different channels, the data continue to pile up. It’s this deluge of information and how to make sense out of it that is being referred to as Big Data. But, as I’ve written before, Big Data is really the problem—not the solution, per se. The fact that organizations are collecting all of this information is great. It’s what they are doing (or not doing, as you’re about to see) with it that’s most important.

I recently read a study done by the Columbia Business School and the American Marketing Association titled “Marketing ROI in the Era of Big Data.” The study was a survey of 253 corporate marketing decision-makers, director-level and above, at large companies. The results were striking.

They found that 91 percent of senior corporate marketers believe that successful brands use customer data to drive marketing decisions. OK, fair enough … couldn’t agree more. But, among those who are collecting data, a measly 39 percent admit they’re actually unable to turn this information into actionable insight. Pretty surprising, huh?

That’s not all. A whopping 65 percent of marketers admitted that comparing the effectiveness of marketing across different digital media is “a major challenge” for their business. An astounding 57 percent of marketers are not basing their marketing budgets on any ROI analysis whatsoever. And to add insult to injury, 22 percent are using brand awareness as their sole measure to evaluate their marketing spend. That’s right, as their sole measure. A direct marketer by trade, I almost spit out my coffee when I read that last stat.

But the shocking thing is based on my experience, I do not find this to be out of the ordinary. In fact, I met with one client recently and was shocked to learn that the client had basically thrown in the towel when it come to defining attribution, and had created hyper-simplistic ROI analysis by using a control customer group to whom the client didn’t market at all, and compared how much this group bought against the rest. Sounds pretty wonky, right? The crazy part is that even the simplistic model is astronomically better than the 57 percent who don’t even bother with ROI in the first place.

So, what are some solutions to the attribution conundrum? Well, there are several popular models that marketers are experimenting with, and each one of course has its plusses and minuses.

1. First-click attribution—credits the channel where a customer first engaged with the firm. On the plus side, this model actually attempts to discern where the customer journey actually began. The downside is that in today’s environment where marketing is often run in silos, it can be challenging to track customer engagement in a multichannel manner.

2. Last-click attribution—credits the channel where the last action took place (i.e., where the conversion occurred). On the plus side, this model is super easy to track. The downside is that it only measures the channel that’s best at generating the sale itself, and completely disregards how the prospect was initially brought into the fold.

3. Equal-weighting attribution—tracks all of the touchpoints where the customer engaged with the firm, and gives them all equal weight in terms of generating the conversion. The advantage of this model is that it takes a holistic view of the customer-vendor relationship. At the same time, this model overlooks the disproportionate role one channel may play over another.

4. Custom-credit attribution—a hybrid model created by the marketer based on its marketing strategy, customer base, and so on. If done right, a custom model can be highly effective, as it’s designed based on facts on the ground. The only downside is, well, you’ve got to create and test it—which is often easier said than done!

Okay, guess I’m out of room for this post, so I’ll end it here. In any event, I’d love to hear about what if any attribution model you’re been using, how it has worked out, and so on. Let me know in your comments.

— Rio

No More Menial Jobs and 2 Other Steps to Customer Experience Transformation

As a marketing consultant, I read great articles about Customer Relationship Management (CRM) every day on the job. Most of them focus on the sales and marketing aspects of CRM … what strategies to employ, tools to use, messages to send out and so on. But let’s not forget that world-class CRM programs also include awesome customer service, essentially creating a Total Customer Experience that fosters long-term, profitable relationships with customers.

As a marketing consultant, I read great articles about Customer Relationship Management (CRM) every day on the job. Most of them focus on the sales and marketing aspects of CRM … what strategies to employ, tools to use, messages to send out and so on. But let’s not forget that world-class CRM programs also include awesome customer service, essentially creating a Total Customer Experience that fosters long-term, profitable relationships with customers.

For many companies, however, the customer service element in CRM is often an afterthought. Banished to a windowless office in the bowels of the company, customer service teams are quite literally out of sight, out of mind. Much of the time, this function is even outsourced entirely. But I have a sneaking suspicion things are going to change big time in coming years, and here’s why.

It’s no secret that companies are now dealing with super-informed, savvy and influential end-users who leverage Social Media and the vast research resources of Web 2.0 to make their purchase decisions. Let’s call this new end-user ‘Customer 2.0.’ In this new paradigm, the balance of power is shifting away from the sales and marketing teams, as firms are discovering that Customer 2.0s are by and large unresponsive to traditional sales and marketing tactics.

This means that customer service is, quite literally, becoming the first and only line of defense. If customer service is poor, it follows that the overall Customer Experience should be lousy, too. Given these facts, it shouldn’t be too controversial to suggest that in the business world of tomorrow, excellent customer service will not only the hallmark of a successful firm, but a Key Performance Indicator (KPI) by which success is measured.

Providing top-notch customer service necessitates transforming the way a firm does business and engages with its clients—aligning it to a model where customer service plays a central role in the firm’s operations. Welcome to the world of Customer Experience Transformation.

For customer service, I define Customer Experience Transformation in three broad swathes:

1. PersonnelIt’s time to view customer service as a profit center, not a cost center.

Say goodbye to the days in which customer service is viewed as a cost center, staffed with bottom-of-the barrel employees who can easily be replaced. To the contrary, customer-focused firms hire smart, savvy and highly motivated customer service representatives, knowing full well that these valuable employees are the firm’s principal ambassadors to the outside world.

I recently read an excellent article in Ad Age titled “Are You Ready for a World Without Menial Jobs?” The crux of the article is that instead of cutting costs, the world’s most successful retailers are actually investing heavily and spending for more than their rivals when it comes to recruiting, training and retaining customer service staff. Turns out, this steep up-front investment ends up paying off in spades down the road, in the form of higher sales and increased profitability.

2. SystemsWorld-class service needs world-class infrastructure supporting it.

Truth be told, customer support is only as good as the systems a firm has in place to support its operations. In the world of Customer 2.0, a Web presence acts as a primary point of engagement with customers. In that vein, it’s crucial to provide customers a Web presence that is not only clean, clutter-free and easy-to-navigate, but also—especially when it comes to providing personal or account info—personalized and secure. Furthermore, a website must be also optimized for ALL major Web browsers and operating systems, including—and especially—mobile.

In the age of Social Media, no firm that’s serious about providing customer service can avoid having a social media strategy. Without getting into a nuanced approach required for firm-wide Social Media engagement, as regards customer service, Social Media can and should be used to listen to, engage with and monitor a company’s customer base. There are some great SCRM (SocialCRM) and Social Media monitoring tools out there. Supported by savvy staff, they can be used to ensure customers are being engaged with quickly and effectively.

Internally facing, there are myriad important questions to ask, as well. Where are customer data stored, and how often is this database updated? How often are these data being synced with information from outlying systems, including IVRs, marketing tools, etc? What CRM solution is being used, and are best-practices being followed? If not, good luck tracking KPIs.

3. DNAChange the way you act, and you’ll change the way you’re perceived.

In many ways, corporate DNA is the most important element in Customer Experience Transformation. Corporate DNA is synonymous with corporate culture, which permeates the way in which an organization engages with its customers. For many companies—especially those in legacy industries—becoming customer-focused requires a major pivot.

To illustrate this point, let’s focus on the healthcare industry. Because in the US, health insurance is almost always procured by the employer, the primary point of engagement with end-users is usually when they call up to see why claims haven’t been paid. Now if you’ve never had healthcare in the US, you know this is most definitely not a pleasant experience. No wonder people don’t care for healthcare companies, in general.

Now, of course, denying and approving claims is far from the only thing that healthcare companies do. But, as a customer, you’d never know it. What this implies is an industry ripe for transformation.

If a healthcare company wants to be regarded as a healthcare company—as opposed to a health insurance company—then why not start by acting like one? Better yet, act like a health partner, providing customers with practical healthy lifestyle tips and ideas that will improve their health and, presumably, lead to fewer claims down the road.

Better yet, find out more about customers and send out highly personalized healthcare information they can use in their daily lives. Or, taking it a step farther, how about using that information to create fun contests and social media engagements customers can participate in, ‘gamifying’ the user experience.

In this model, although the business model has not changed, the overall customer experience has been transformed, resulting in a more positive brand perception, higher lifetime value and, of course, increased profitability.

Is your organization creating an awesome customer experience? If you have any questions or feedback, please let me know in your comments.

Thanks,

—Rio

7 Customer Survey Tips, or How to Know Your Customer For Increased Leads & Profits

Ask any business owner and they’ll tell you, one of the most important rules of thumb is “know thy customer” (KTC). For many years, I’ve found the best way to KTC is implementing periodic customer surveys, then creating a “customer profile” sheet. 

Ask any business owner and they’ll tell you, one of the most important rules of thumb is “know thy customer” (KTC).

Knowing who your customers are—not just on a superficial level, but also on a deeper level—is fundamental for business longevity. It can help your business with most any targeted marketing efforts such as social media marketing (communities with like-minded interests), direct mail and email list selection, copywriting, media buying, affiliate marketing and more. It can also help with bottom-line goals such as bonding, lead generation and sales.

For many years, I’ve found the best way to KTC is implementing periodic customer surveys, then creating a “customer profile” sheet. Ideally, you want to survey at least two times per year, especially after large attrition or list growth.

The profile sheet is important, as it’s a quick reference of your “Joe and Jane” customers, as well as your ideal ‘target’ lead. After all, your prospecting efforts should be a reflection of your current customer base.

But surprisingly enough, not every business knows how to effectively implement and data-mine its online surveys and the respective results.

Here are some quick tips to get the best performance from your customer surveys for business growth and retention:

1. Keep surveys easy and short. The ideal length should be no longer than 10 to 20 questions and questions should be easy to answer. That means thinking of typical questions and having pre-populated multiple choice answers that only need a mouse click.

2. Go 360. Questions should cover demographics, geographics and psychographics. Also, for potential joint venture or advertising opportunities, it’s smart to also ask some competitor and purchase-behavioral type questions.

3. Segmentation is key. Send at least two separate emails to your list. One survey to paying customers and one survey to non-paying customers (leads). It will help later to have these two segments separated when you review response results. If one segment is less responsive than another, you can isolate future “bonding” strategies.

4. Offer incentives. I like to offer free, immediate and easily accessible gifts for survey participation after completion of a survey. Once users submit their last response they are redirected to a download page to free reports or similar. People are taking time out of their schedule and should be “rewarded” accordingly.

5. Be creative with the email subject line. I’ve found that response is greater if the focus of the subject line is more on the reward, rather than the goal. Readers respond better to the mention of freebies and gifts (the “what’s in it for me”), than asking for survey completion. Survey subject lines are viewed as clinical and boring, thus glared over in the inbox.

6. Embrace online tools. Use an easy, cost-effective online survey, such as SurveyMonkey.com. There’s different options and price points, varying on need and robustness. But ideally, you’d want to be able to collect emails and tie responses down to the user (email) level.

7. Allow feedback. Always have an “other” field for open comments. People like to either vent or add praise, so don’t limit them with only having all multiple choice. I tend to make this option the last question.

If you’ve set up your survey correctly where you can drill down responses to the user (email) level, you can then created “buckets” (categories) of common themes. For example, buckets could be based on RFM (recency, frequency or monetary) or on other categories such as interests.

You can then use this information for database marketing efforts and send more personalized messages to your list by group (or “bucket”). This targeted marketing approach has been proven to increase open, click, response and conversion rates by more than double!

Not surveying your list is really doing a disservice. You are not really getting to know your customers; thereby, aren’t offering your best editorial or promotional messages, or creating the best products.

If you’re truly looking for better retention, more customer engagement, and increased sales or leads, then make the time to survey your list.

If you’ve never done this before, then you’re truly leaving money on the table, my friend.

Social CRM Starts With Best Customers

If best customers — approximately 20 percent of your customer base — account for 80 percent of sales, then one would think identifying and striving to create a unique experience for those shoppers would be the goal of nearly every marketer on the planet.

I’ve been reading a lot about social CRM recently. Lots of talk about combining data and intelligence from multiple channels, how to merge and understand structured and unstructured data, and the critical role algorithms play in helping brands anticipate a consumer’s next move. But what struck me most while reading through the numerous articles and analyst reports was the apparent lack of focus on identifying and catering to best customers.

If best customers — approximately 20 percent of your customer base — account for 80 percent of sales, then one would think identifying and striving to create a unique experience for those shoppers would be the goal of nearly every marketer on the planet.

While I’m not suggesting brands abandon their efforts to leverage social media to connect, engage and influence all consumers, I am suggesting they think more strategically around identifying best customers and creating unique and special experiences for those customers. So, how should brands approach such efforts? Start with the following basics:

  1. Listen: To build a unique and engaging experience, listen to and understand the kinds of conversations customers are having and, specifically, what they’re saying about your brand. Insights gained through listening can often identify a shared passion (be it travel, sports, music, finances, etc.) that’s essential in engaging best customers in ongoing conversations.

  2. Learn: If your brand has a loyalty program and robust data, you’re already a step ahead. If not, you’ll want to conduct some proprietary research across your best customers to understand how they use the social web, and to inform your segmentation and marketing strategy further. This research will also be critical in developing enhancements to your existing programs and developing new social programs that not only appeal to your segments, but offer value.

  3. Engage: By now you’ve gained a good understanding of your key customers and influencers. The next step is to build a truly unique and special experience for them, leveraging all touchpoints: website, email, customer service desk and presence on social networks. Take the time and effort to build a lifecycle communication program for every segment, paying attention to community management. Rethink your loyalty programs — perhaps shift your focus from promotions to rewarding best customers for participating with your brand — be it their community contributions, social network activity or brand advocacy.

  4. Influence: As you begin to engage your best customers, don’t forget the “social” in social CRM. Leverage social tools to facilitate and encourage sharing and brand advocacy. Flag and thank active customers, and reward them for their advocacy.

Finally, track and anticipate what’s coming next. The greatest benefit of focusing on your best customers is the ability to manage and execute based off the data. Amazing things begin to emerge when you not only know who your best customers are, what segment they fall in, what products they like and how often they use them, but also their email activity, loyalty/purchase activity and social activity.

By analyzing this data, leading brands can build algorithms that drive lifetime value and improve campaign and marketing performance across channels. So for all of your thinking about social CRM, remember that the first group you want socializing their experiences with your brand are your best customers. Make their experiences with your brand memorable, and arm them with incentives and tools that enable them to participate and advocate for your brand.