Marketing Success Is (Almost) All About the Data: Optimizing Customer Loyalty Behavior Initiatives

Much of what I’ve learned over the years about sales, marketing and customer service has to do with the critical importance of customer data, and how those data are converted to actionable insights. It’s how companies generate the right customer data, manage and share data the right way, and use it at the right time. It’s also how they use data to the best effect, to optimize loyalty and profitability, that makes them successful, or not, on an individual customer basis. Culture, leadership, and systems will facilitate effective information gathering, storage and application; and, CRM, CEM, ERP, or other acronyms notwithstanding, it’s impossible to be successful without having as much relevant anecdotal and dimensional content about customers as possible.

Much of what I’ve learned over the years about sales, marketing and customer service has to do with the critical importance of customer data, and how those data are converted to actionable insights. It’s how companies generate the right customer data, manage and share data the right way, and use it at the right time. It’s also how they use data to the best effect, to optimize loyalty and profitability, that makes them successful, or not, on an individual customer basis. Culture, leadership, and systems will facilitate effective information gathering, storage and application; and, CRM, CEM, ERP, or other acronyms notwithstanding, it’s impossible to be successful without having as much relevant anecdotal and dimensional content about customers as possible.

Bill Gates, often a prophet, said in “Business @ The Speed of Thought” (1999):

The best way to put distance between you and the crowd is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose.

He might have added, had he really understood how to create and optimize customer loyalty, that what information, particularly customer-specific information, a company collects, and how they manage, share and apply it to the customer will determine how successful they can become.

One of my key sources for the uses of information gathered by customer clubs and, particularly, loyalty programs, for example, is friend and colleague, Brian Woolf (www.brianwoolf.com). Brian is president of the Retail Strategy Center, Inc., and a fountain of knowledge about how companies apply, and don’t apply, data generated through these programs.

In a Peppers & Rogers newsletter, for example, Don Peppers quoted Brian in his article, “The Secrets of Successful Loyalty Programs”:

Loyalty program success has less to do with the value of points or discounts to a customer, and much more to do with a company’s use of data mining to improve the customer experience. Top management hasn’t figured out what to do with all the information gleaned. You have all this information sitting in a database somewhere and no one taking advantage of it.

You need to mine the information to create not only relationships but also an optimum (purchasing) experience. The best loyalty programs use the customer data to improve not only promotions, but also store layout, pricing, cleanliness, check-out speed, etc.

Firms that do this are able to double their profits. When these elements are not addressed, all you’re doing is teaching the customer to seek out the lowest price.”

Tesco, one of the world’s largest retail chains, is using its customer information for a number of marketing and process initiatives. In his book “Loyalty Marketing: The Second Act,” Brian described how Tesco leveraged customer data drawn from its loyalty program to move into offering banking and financial services:

With information derived from its loyalty card and enriched by appended external demographic data, they can readily develop profiles of customers who would most likely be interested in basic banking services, as well as an array of related options, ranging from car loans and pension savings programs, to insurance for all types of needs—car, home, travel and even pets. It costs Tesco significantly less than half of what it costs a bank to acquire a financial services customer. Without a doubt, having detailed customer information gives them a competitive edge.

A few years ago, Tesco parlayed its offline customer data to also become the world’s largest online grocery and sundries home delivery service. Additionally, Tesco uses its customer data to target and segment communications to the millions of its loyalty program members by almost infinite demographic, purchase and lifestyle profiles. In his book, Brian notes that Tesco can create up to 150,000 variations of its promotion and reward statement mailings each quarter. These variations, as he says, ” … are both apparent and subtle, ranging from the product offer (i.e., which customers receive which offers at what price) to the content of the letter and the way it is personalized.”

Tesco is absolutely a company that knows how to leverage customer information. Its customer database contains not just demographic and lifestyle data, food spending in stores and on home delivery, but also specifics about its customers’ interest in, and use of, a diverse range of non-food products and services. As Bill Gates’ statement suggests, incisive and leveraged customer data has enabled Tesco to put distance between itself and its competitors, in both traditional and non-traditional retail markets.

An understanding of the real value and impact of customer information, and a disciplined plan for sharing and using the data to make a company more customer-centric, is needed more than ever. A good analogy, or model, for CEM and loyalty program effectiveness or ineffectiveness in building desired customer behavior, may be what can be termed the “car-fuel relationship.” A car, no matter how attractive, powerful and technically sophisticated, can’t go anywhere without fuel.

Not only that, to reach a desired destination, the car must have the right fuel for its engine, and in the right quantity. For customers, the car is CRM and its key data-related systems components (data gathering, integration, warehousing, mining and application).

The destination is optimized customer lifetime value and profitability. The fuel is the proper octane and amount of customer data.

Leading-edge companies are focusing on customer lifetime value as a destination. They are collecting the right data and using the right skills, processes, tools and customer information management technologies to make sure that key customer insights are available wherever they are needed, in all parts of the enterprise. Jeremy Braune, formerly head of customer experience at a leading U.K. consulting organization, has been quoted as saying: ” … organizations need to adopt a more structured and rigorous approach to development, based on a real understanding of what their customers actually want from them. The bottom line must always be to start with the basics of what is most important to the customer and build from there.”

I completely agree. It’s (almost) all about the data.

6 Ways to Use Email Partnerships to Increase Sales

Email marketing campaigns are typically limited to the people who subscribed to the company’s messages. Partnering with non-competitive organizations increases exposure to offers and helps grow your email address database faster. Finding potential partners is easier than one might think. The need to provide fresh content on a regular basis opens the door for partnership development. The key to doing it well is to find organizations that cater to people who match your customer demographics. Conduct extensive research before reaching out to potential partners.

Email marketing campaigns are typically limited to the people who subscribed to the company’s messages. Partnering with non-competitive organizations increases exposure to offers and helps grow your email address database faster. Finding potential partners is easier than one might think. The need to provide fresh content on a regular basis opens the door for partnership development. The key to doing it well is to find organizations that cater to people who match your customer demographics. Conduct extensive research before reaching out to potential partners.

When considering opportunities, clearly define your objectives, know what you have to offer, start small, and build from successful experiences. Choosing partners that have similar corporate values contributes to the trust level. Recipients who trust your partner tend to automatically trust your company and vice versa.

Google Offers
Google’s promotions are designed to work with Google Plus Local. It uses email and an android app to deliver messages to the people who have joined the program. The app delivers messages to subscribers when they are close to the location of participating companies and when chosen offers are nearing expiration.

Partnering with Offers is free at this time. There are minimal requirements for participation: Your business must have a physical location in the United States that serves customers, it must be verified using Google Places for Business, and the product line must be eligible. This partnership is easy to set up and cost effective.

Pinterest
The rich pins option for Pinterest has a new feature that sends emails to users when items they have pinned go on sale. The emails include good imagery and a simple marketing message that reads “Good news! Today your [item] pin from [company] is [discount]% less.” The message is followed with a “See Pin” call to action button and “Happy Pinning!”

Using rich pins is limited to movies, recipes, products and articles at this time. The products category is the only one that includes pricing making it eligible for the sale email notifications. Participation is free, but it requires oEmbed or semantic markup on your website for information collection purposes.

Non-Profits
Helping others is good for business. Non-profits have supporters that may not be familiar with your company. You have customers that may not be familiar with specific non-profits. Partnering with these organizations increases awareness of their cause and your company.

When partnering with non-profits, create multichannel messages that benefit all participants. One approach is offering a discount coupon when someone donates a minimum amount to the non-profit. Make it appealing to supporters by offering savings greater than the amount donated. Your objective is to gain new customers that will stay with your company. Monitoring the activity of newly acquired customers after the initial purchase validates the partnership. If you are acquiring hit & run shoppers, a different non-profit may be a better choice.

Publications
Keeping up in a high demand for original content arena is challenging. Partnering with publications, online and off, works well for companies that offer informational products. Create mini-guides from your larger offerings that can be given to readers.

Choose partners with content that matches your products well. Offering to host the distribution of the mini-guides gives you the opportunity to capture email addresses. (Test with and without gating to see which works best.)

Educational Organizations
Companies offering products that appeal to students or parents can partner with campuses to increase exposure and capture new customers. Credit card companies have this process down to a science. Learn from their processes so you can appeal to the people participating.

Choose to partner with campuses that offer degrees in the fields that match your product line. For example, if your company sells teacher supplies, choose a campus that teaches education. Giveaways, sweepstakes, and contests work well for students. Design them to appeal to the students and open the door for a long-term relationship.

Non-Competitive Businesses
No company offers everything people need to live their life. Test partnering with companies that offer complementary products. This introduces your company to people who are highly targeted. In return, your participation provides reciprocal information.

Monitor all messaging to insure that your partner’s communications are consistent with yours. Create an agreement that includes limits and the ability to verify accuracy in the information exchange. Choose partners carefully because you don’t want to provide your customer information to a potential competitor.