How Events Hurt Major Gifts — And What to Do About It

I was in a meeting with the fundraising staff of a very prominent and successful nonprofit, and the leader of the major gifts program told the familiar story of how he and his staff had been pulled away from their major gift work to organize an event that “meant a lot to the board.”

eventIt happened again.

I was in a meeting with the fundraising staff of a very prominent and successful nonprofit, and the leader of the major gifts program told the familiar story of how he and his staff had been pulled away from their major gift work to organize an event that “meant a lot to the board.”

I was stunned by what I was hearing, because the major gift staff already had its hands full with substantial increases in goals for the fiscal year, and now it was being recruited to spend a good deal of time and money organizing a feel-good event that, quite frankly, had nothing to do with fundraising.

It was true that the event would net $50,000. But when I heard that number, I asked if staff time had been calculated into the cost. No, it hadn’t. And when we did the math, that $50,000 net disappeared in a nanosecond.

What is it about nonprofit boards, leaders and staff who so easily catch events fever and lose their way on thinking objectively about this topic?

Yes, a well-organized event, with the right content, can raise the profile of a nonprofit. But then, why not have the public relations or communications department handle it? Why pull the major gift folks away from relating to their good donors to do this work? I know. Because it’s the donors on the caseload that will be the core group who will make the event financially successful.

Hold on. Did you just hear what I said? The donors on the caseload will make the event financially successful. Hmm. So we are moving money from the major gift officer’s caseload to the event and increasing the expense to secure that money? Yep. Crazy. And, likely, the gift the major donor gives at the event will be far less than what she could have given if the major gift officer had managed the giving outside of the event.

But these major donors will bring their friends, and we can make them our friends, and everything will be grand. It’s true. I have seen this happen. But not very frequently. Here’s why. The friend has come at the invitation of the major donor, and two things are working against them getting further involved:

• The friend is simply servicing an obligation. They have no intent to get involved. It is a nice social time out with a good friend and that’s that. Or they are trading favors. “You came to my gig last month. I go to yours now.” And while you could turn this around with a compelling program, the fact is …

• There is no compelling program presented. This has always amazed me. We get all of these wonderful people together. And they have a ton of capacity to give. But all we offer, besides a nice meal, is some quick facts about who we are, a testimonial, an award to a board member or key volunteer and other nicey-nicey things. And everyone goes home feeling good.

If the leaders in your organization have events fever — in other words, hardly any argument or reasoning will dissuade them organizing an event — then make the best of it by doing the following:

1. See if you can get some other department to do the heavy lifting. Get PR, communications, the volunteer coordinator, the assistant to the executive director — someone other than you — to organize it. In other words, protect your major gift time as best you can. Time is all you have. And there is very little of it to put toward relating to your caseload donors. So have a mindset of delegating as much as you can.

2. Sell tickets to cover costs. This isn’t a new idea, and it’s regularly done. I only mention this to set up the next point. Your objective is to break even or have a positive net to cover the labor involved.

3. Create a compelling program that presents an “I can’t avoid supporting it” project. Yes, you heard correctly. I am suggesting selling tickets and asking for gifts at the event. And the ticket-selling process should clearly outline what you are doing. “I am selling tickets to cover costs because I want you to come with your friends and hear about this exciting must-do project.” Obviously, you have to create something that the donor and their friends and other prospects want to attend.

Think about this like you do when you go out with friends to dinner and split the check. That’s all that is going on. The donors are covering the cost to attend a presentation. The whole event must then be carefully choreographed, from start to finish, so that the donors and their friends are completely engulfed in the drama and journeys of the people who will be helped when they get involved. When I say start to finish, I mean things like:

  • The look of the ticket and program.
  • Signage at the venue.
  • Material on the tables or, if outside, those materials as well.
  • What the greeters say to people coming in.
  • The sequencing, cadence and messaging of the program — every single element is discussed and programmed. Nothing is left to chance.
  • The testimonials and comments of people invited to speak.
  • The pictures, videos, music and any other program elements.
  • Every single element is strategic — even when and how a meal is served. Everything.
  • The price tag for the project needs to be large enough to accommodate the giving goals you have set for every donor on your caseload and their friends and other non-donors who may be present. You do not want to have a $100,000 project when the sum of all the goals of the donors present is $750,000. Doesn’t make sense.

Here’s the thing. Nothing is left to chance. Everything is intentional. And all of it draws you to this amazing thing “we must all do!” That is what I mean by compelling. You are drawn in and compelled to act. That is how engaging the program/project is.

4. Seed the event and the giving at the event with up-front giving by selected donors. Go to selected caseload donors and ask them to come to the event and make a commitment to the project. You might ask for a matching gift that can be unveiled at the event. It could really be quite dramatic. Picture this. The project is $850,000 and one donor, in advance, has pledged a $300,000 matching gift.

At a strategic moment at the event, the executive director calls on the donor to speak. She says something like, “When I heard about this project, I just had to get involved. Think of the difference we all could make if, tonight, we funded the whole thing! It would be so exciting. Look at all the lives that would be forever changed. That is why I am putting up a $300,000 challenge grant. Whatever you give tonight, up to $300,000, I will match. Come on, let’s get this done!” Wow, that would be something.

***

So, you get what I am saying about the same old, same old event vs. a version of what I am describing above. This is a real fundraising event. Not the faux event that so many nonprofits spend so much time on. If you are going to do an event, do it right. Make it cause-oriented vs. just a happy time.

The cause is why the donors are involved — they want to make a difference in someone’s life. Program your event toward that reality. It will make a tremendous difference in the financial outcome and how the donors feel about your organization.

Customer ‘Loyalty’ — It’s Never a Sure Thing

As “Data,” “CRM” and the “Customer Database” continue the march toward the center of the marketing organization in tens of thousands of businesses, not surprisingly another “classic” marketing concept is rather “new” again — customer loyalty.

CRM keyAs “Data,” “CRM” and the “Customer Database” continue the march toward the center of the marketing organization in tens of thousands of businesses, not surprisingly another “classic” marketing concept is rather “new” again — customer loyalty.

Customer Loyalty: Where to Start

The right place to start in your consideration of customer loyalty and creating a loyalty program is simple, and yet relatively often, rather overlooked.

A simple question we ask when discussing the “loyalty” dimension of customer experiences and the customer data they produce goes something like this: What does success look like when you implement a customer loyalty program?

The answer to that varies — but the worst answer is “nothing.”

“Nothing” is never determining what the end in mind should be for your customer loyalty program in the first place. When organizations invest in defining the outcome they seek, they are roughly 20 percent of the way to success. As the axiom goes, “If you spend 90 percent of your time defining the problem, you’ll solve it in 10 percent of the time.”

What Can We Expect From Loyalty Initiatives?

So what should we expect from a customer loyalty program? Here’s a partial list we’ve heard from the brands where we’ve used customer data to inform and improve customer loyalty:

  • You keep those customers longer
  • You generate more social referrals
  • Those customers buy more often (frequency)
  • They are less sensitive to pricing and increases in particular
  • The cost of customer acquisition can actually be lower
  • Exchanges and returns decrease “naturally”
  • You recognize profit growth

These are all very real outcomes you can expect from a high-quality customer loyalty program built around your unique customer and your business.

How Does Loyalty Really Work?

This is the best question to ask. Most organizations I’ve worked with on managing a customer base (customer database) to drive business performance begin with a gold, or black card, a name for an elite club or a space they will convert to lavish “loyal” customers with attention.

Your Secret Weapon for Amplification: Employees!

There are sales enablement programs, partner and channel enablement programs and even influencer enablement programs. Why are there then, so few employee enablement programs—especially when both the knowledge of the company and the CRM/integrated marketing technology is already in use?

There are sales enablement programs, partner and channel enablement programs and even influencer enablement programs. Why are there then, so few employee enablement programs—especially when both the knowledge of the company and the CRM/integrated marketing technology is already in use?

Very few companies fully engage employees in the work of connecting with customers, prospects and new markets, according to a 2014 Altimeter Group survey of HR and marketing executives. Only 41 percent of respondents reported having a strategic approach for employee engagement, and just 43 percent say they have a culture of trust and empowerment. Yet, Altimer finds that company who do engage employees in a purposeful digital outreach enjoy measurable business impact, greater reach and improved customer satisfaction.

One of the biggest factors in this untapped opportunity, according to the report, is that most employees don’t have a clear understanding of what they can or should share on behalf of the brand. As a result, most stay quiet.

A quick way to measure the impact on your business is to assess the variance between the collective reach of your employees on LinkedIn, Twitter or Pinterest and the number of fans and followers on your branded corporate pages. That delta is your opportunity-every professional post or pin by an employee is an opportunity to connect people back to your corporate properties.

Of course a purposeful approach to empowering employees must be respectful of everyone’s personal brand and voice. Forcing people to stiffly spout the company line will not only backfire in terms of employee loyalty, it will be a turn off for readers. The engagement has to be authentic in order to resonate.

The technology is here-in the past decade there has been a plethora of new digital tools for helping employees connect with each other and with their professional communities. Many tools are embedded in the CRM and sales enablement tools already in use for outside engagement. Why aren’t people using them internally? Perhaps because the presence of a tool itself is not enough-to create business value the tools must be accessible, helpful and aligned with the business culture.

Marketers who want employee engagement must develop a repeatable and respectful plan for advocacy:

  • Cross-Functional Reach:
    While sales, marketing and service teams often advocate for the business as part of their job descriptions, employees across the organization can also be incentivized to participate. Making these activities a win-win for the employee and the employer is key to participation.
  • Training:
    Most employees would be happy to support a respectful program, but truly do not know what to say. Setting clear boundaries and sharing sample messaging is a start, but also be explicit about the “how to” aspects. Encourage employees to make the message personal-and thus of higher impact-by translating the corporate message into their own voice.
  • Culture of Mutual Respect:
    Employees who cannot be trusted with confidential information also can’t be expected to fully engage in any innovation or forward-thinking programs. If this is the case for your organization, then your culture may not be a fit for employee engagement.
  • Content:
    Most businesses are publishers today-from blogs to social media to customer service scripts. These are rich sources for content that can be easily shared and amplified through employee engagement.

Creating active and visible employees may give some managers pause. Altimer recommends encouraging personal brand building anyway, claiming the risk is low that top talent will be poached. The opposite is usually true, the report says. Employees build a sense of pride and connectedness, and become invested in the company success.

Beyond email signatures and call center scripts, how is your company tapping the rich network of your employees to build the brand, amplify messaging and generate leads? Are your employees already active participants in sharing your company brand story? If so, how can you bring that forward into a more purposeful program? Share your challenges and ideas in the comments section.

Building Your Brand Religion

Even with the most finicky of customers in an increasingly chaotic and complicated world, lifetime value and brand loyalty can still be achieved. But not how you might think. It’s not the loyalty programs, frequent purchaser points (only 35 percent enrolled redeem these, per Forrester Research), and free gifts that stack up the purchase orders for a given customer. And it’s not the great service that can be matched by your competitors, either. It’s something much deeper. The same something that keeps the church pews warm, tithing coffers full and baptismal fonts busy.

Even with the most finicky of customers in an increasingly chaotic and complicated world, lifetime value and brand loyalty can still be achieved. But not how you might think.

It’s not the loyalty programs, frequent purchaser points (only 35 percent enrolled redeem these, per Forrester Research), and free gifts that stack up the purchase orders for a given customer. And it’s not the great service that can be matched by your competitors, either. It’s something much deeper. The same something that keeps the church pews warm, tithing coffers full and baptismal fonts busy.

The secret to lifetime value and referrals from your customers is really no secret at all. It’s simply the psychology of hope, loss and rewards, and trust that has made religion the biggest industry worldwide. Without question.

Consider:

If loyalty were dead, all of this money could not be generated from the millions of loyal believers who give up, on average, nearly 3 percent of their annual incomes to their religious faiths. If you take just U.S. wage earners with an annual income of $40,000, that comes up to about $93 billion a year in tithing—the equivalent in revenue for the worldwide video game industry in 2013, according to Gartner Research. And you wouldn’t have nearly 44,000 people attending a single group’s service on Sunday where the only product being sold is hope.

While we direct marketers are clearly selling more than hope as we peddle tangible products and services to millions of customers each year, our marketing ROI could truly become divine if we follow even just a few of the tenets from religious psychology. The primary tenets or cornerstones of all successful religions are:

1. Hope or faith in a better life (in this case, an afterlife);

2. Trust in your leaders to guide you with integrity;

3. A sense of community, or like-minded souls who have the same values, ideals and beliefs; and finally,

4. A fervor so strong about your beliefs that you are willing to spend much of your time on this earth spreading your faith’s gospel and bringing others into the fold—all on your own time, at your own expense and without any pay (besides the joy of knowing you brought eternal joy to others).

These are the same four cornerstones that make for successful branding and must be present in any brand’s marketing programs today.

Hope: All products are emotional purchases—your car, life insurance, clothing, furnishings and even food. Each time you swipe that payment card, you are doing so with the unconscious hope of gaining some intangible value associated with that product. Be it status, safety, reliability, an image that will attract romance or job opportunities for you, or a break from the fear of failing your children, spouse or job. What is the hope associated with your products? And yes, this applies to both B-to-B and B-to-C.

Trust: I’m not sure if there has even been a lower level of consumer trust for big brands as there has been in the past decade. Regardless of what industry you are in, trust is fleeting and hard to get, even for a small moment in your customers’ lifetime. Consumers are eager to find brands they can truly trust to stand behind their promises and products, and to actually put consumers’ interests, and those of the community at large, ahead of their own. There a few who do that well. Tom’s shoes is a great example. Even though the company sells a pair of shoes for around $65 which costs it $9 to make—earning it a profit of around $56 a pair—people love and trust Tom’s, because it promises to donate one pair to a needy child for every pair sold. And Tom’s produces evidence that it really fulfills this promise. The leaders of Tom’s shoes are right up there with the rich pastors of the world for selling hope that the world can be a better place, providing people with a means to make it that way, operating with integrity and cashing in on millions at the same time.

Community: Also known as “congregations,” we flock toward people with like values to feel safe, validated and empowered. Many people lose their faith at some point in their lives and question the religion of their childhood, and a large number of these fallen-from-faith adults stay true to their religion at the cost of losing a community of support, friends and a trusted network to be there when they are in need. Leaving is too high a price. The same applies to brand communities. Brands that bring consumers together for events or group discounts like “Family and Friends” create unbreakable equity as consumers pay a price to switch that is far higher than money, in many cases.

Evangelism: We love telling friends about a great purchase and then getting great satisfaction (really, decision validation) when they buy the same thing. It is our innate need to know we are making wise choices that others believe are wise, as well. This is particularly strong when it comes to our faith. The Mormons are famous, partially due to the recent Broadway musical, “Book of Mormon,” for their aggressive missionary program—whereby they have 80,000 missionaries evangelizing all over the world paying their own expenses, and working for free to build the church’s membership base. Why do they do it? Because they truly believe they have found the secret to a happy life and an even better afterlife, and they are compelled to bring others into their joy. This same need to share sources of personal joy with others applies to customers. Like religions, brands just need to create the tools to make it easy to do. Religions like Mormonism and Rick Warren’s Saddleback Church have a book that members share with others. Religious-like brands have discounts and free trials for loyal customers to share freely.

When you find the right tools and provide the right incentives to your loyal customers, you can engage free marketers for your brand who will work on their own time, at their own expense and for the reward of knowing someone else loves your products, too! Seriously, what more can a brand want? (Other than a tax exempt status!)

As you start a crafting a new marketing plan, throw out the four Ps and starting focusing on the above “Four Cs”—the cornerstones of your brand’s religion—and see how quickly you reap the rewards in this lifetime (and the next!).

Mentoring: Give a Little, Get a Lot

Last summer, I heard that my alma mater was launching a mentoring program between graduates and enrolled Seniors. Even though I no longer reside in my college town, I quickly volunteered to be a guinea pig for remote mentoring

Last summer, I heard that my alma mater was launching a mentoring program between graduates and enrolled Seniors. Even though I no longer reside in my college town, I quickly volunteered to be a guinea pig for remote mentoring.

The woman running the program was hesitant at first—her vision was to put grads and students together face-to-face and create events that would bring the mentor/mentees together outside of 1:1 meetings.

Even though I reside in the San Francisco Bay Area and my college is in chilly Ottawa, Canada, I convinced her to team me with a student who was studying abroad for a semester so neither of us would be on campus.

Luckily I was paired with a wonderful senior named Mitch who was spending a semester in The Netherlands and studying marketing. We hit it off immediately, swapping stories about our pasts, our work experiences and talking about his goals when he graduates (to work in sports marketing). Mitch proved to be intelligent, inquisitive and eager to learn about the real world of marketing and advertising.

In our weekly calls, I answered a lot of questions (about marketing strategies and tactics and concerning specific job functions in the industry), but we also talked about some very practical things like how to put together a solid resume and a LinkedIn profile. Frankly, I was a bit surprised that in this social media crazed world, this very bright student was not that familiar with LinkedIn and how to use it to his advantage. Upon having further conversations with my college graduate son and his friends, it seems none of them were particularly savvy about LinkedIn and how leverage it to their advantage.

Helping Mitch with his resume was a fascinating exercise in marketing. His first draft provided a laundry list of all his summer jobs, but didn’t successfully position his experience and his growing expertise. As I quizzed him on what he actually did at each job, I helped him extract the salient messages he needed to convey about his skills and accomplishments—it was similar to working with a client to help them clarify and synthesize a product’s attributes and benefits, and how they stacked up to the competition.

For example, during his Junior year, Mitch worked for a marketing agency that was helping Microsoft increase its mindshare among college students. He described that job as “Independently reach and educate University students regarding the benefits of Microsoft products while entrusted with expensive technology.”

After some probing into what he was REALLY doing and the knowledge and skill set it required, we rewrote it to read “Manned an on-campus booth and answered questions about various Microsoft software products while retaining proficiency in Microsoft Windows 8.1 and the Microsoft Office Suite of products. Using Microsoft-provided software / hardware, performed a Pre- and Post- Attitudinal Behavior Study.”

Now he sounded impressive!

What was most exciting, however, is that this week Mitch advised me that a Netherlands-based sports organization that he follows on Twitter had tweeted about an opening for a marketing assistant. We quickly got to work refining his resume to match all the skills the job description required and crafted an introduction letter that further highlighted his skills.

We also did a LinkedIn search to determine who the position would report to and poured over the hiring managers resume. I encouraged Mitch to spend time on the company’s website, social media sites to become immersed in the brand, its mission, brand positioning, communications messages and key issues the company is facing.

Yesterday Mitch was contacted by the hiring manager and asked for work samples and to set up an interview. We then went to work prepping him with questions he might ask during the interview process. Honestly, I was as excited as Mitch was!

As I finish this column, I’m waiting to hear the outcome of that first important job interview, but either way, I’m confident that this young man will be a marketing rock star and any firm would be lucky to employ him. And, I relish the opportunity to help another grad enter the world of marketing fully knowledgeable with the skill set to market themselves successfully.

Mastering the Complexities of Multichannel Digital Marketing

Integration is like the Holy Grail of marketing. Connecting the dots at the customer level, across channels, devices and owned and non-owned properties is hard, but not impossible. Multichannel marketers must commit to meeting the customer along a matrixed journey. In a session I led at DMA2014 in San Diego last month, we discussed the types of lifecycle marketing, automation and buyer-centric programs that are most effective for drawing marketers out of silos and into a collaborative multichannel approach.

Integration is like the Holy Grail of marketing. Connecting the dots at the customer level, across channels, devices and owned and non-owned properties is hard, but not impossible. Multichannel marketers must commit to meeting the customer along a matrixed journey.

In a session I led at DMA2014 in San Diego last month, we discussed the types of lifecycle marketing, automation and buyer-centric programs that are most effective for drawing marketers out of silos and into a collaborative multichannel approach.

Andrew “Drew” Bailey, marketing principal at FedEx, said that the most important thing is to have a roadmap that is blessed by the executive team. “We’re mapping out a 3-year roadmap for our strategic objectives, now branded ‘Purple Journey’ (color selected from the brand logo). We try not to be paralyzed by our own processes. We still have to keep the lights on while we move things forward.”

Customers don’t think about channels, so why are marketers still clinging to our silos? Silos occur for a very valid, if not a very good reason, said Staples Director of Analytics and Customer Insight James (Jim) Foreman. “You solve a single need, and then new needs are solved by bolting on something to the original solution and you end up with a lot of things duct-taped together,” he said. “To emerge out of the rut, you need to prioritize with people, upgrade your specifications and budget based on the benefits you will earn from the change.”

There is certainly a people-process-technology synergy that has to happen for great customer experience. “It’s a three-legged stool,” Jim said, “But the glue and power comes from data.” Technology has surpassed our ability to use it well, so a key aspect of your IMM and CRM planning has to be that terrible “P” word that all marketers hate because we really want to do it all, “Prioritization.”

“The purpose of marketing has not changed, but the technology has changed,” Jim said. “Now that we are smarter about—and faster to respond to—the customer, the key is to make sure that we still listen to customers and synchronize touchpoints to recognize people across channels. We’ve learned a lot by combing through the data, inserting touchpoints at conversion points (a video watch, certain session length, repeat purchase, email behaviors, change of address, etc.) and encourage customers to engage with us across a richer journey. We greet you at each new interaction, informed with data from the past—which customizes the experience as much as possible.

“That translates to higher share of wallet, as Staples becomes important to both business and personal needs (customer need), both office and technology needs (product offering), and offline and online (multichannel).”

Not all customers are created equal, and a huge benefit of CRM-driven marketing is to treat all customers well, but some customers better/differently. This allows more personal and custom experience, and builds brand loyalty—especially in competitive, price-driven markets.

“We deliver packages really well,” Drew said. “But when there are concerns, customers can be pretty vocal via social media, so you have to do a good job of addressing the needs of all customers, even when you mess up.”

One approach Drew shared: “We encourage all our team members to be patient, passionate and persistent. With a ‘Good, better, best’ approach, we can help employees be the champions of our customers.

“Change happens from the work of champions,” he continued.

The data that matters to us most is our own delivery performance data—we need the ops teams to play well with the marketing team, Drew said. Staples starts with basic Web behavior—views, clicks, purchases—but quickly augments with demographic data from online accounts and the loyalty program. “We find that a mix of data is most helpful to understanding the next-best offer,” Jim said.

Successful multichannel marketing is in large part due to the way each interaction is met and tackled by the various people and machines that make up your company’s front line. Focus on those that move the needle for your business, stick to an endorsed plan of action, and be nimble and open to changing as your customer and market demand.

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.

One Size DOES NOT Fit All in B-to-B Marketing

Here’s a painful truth: B-to-B lead generation takes a lot of hard work BEFORE you execute any marketing or sales program. Work smarter, not harder, and follow these six steps to make a real difference:

Here’s a painful truth: B-to-B lead generation takes a lot of hard work BEFORE you execute any marketing or sales program.

Work smarter, not harder, and follow these six steps to make a real difference:

  1. Do your homework. What do you know about your existing customers? Do they fall into any particular vertical industries? What types of job titles do they encompass? It’s doubtful that they’re all C-level executives—chances are your real customers are well down the food chain. Select your top four or five vertical industries, identify their job titles, and plan your next steps with these verticals in mind.
  2. Find prospects that look like your target. Finding the right target is NOT like finding a needle in a haystack, and if you’ve always relied on renting a D&B list, then good luck to you. Think like your targets. Join their industry organizations, attend industry conferences and read their trade publications—increase the breadth and depth of your industry knowledge. Most of these organizations/events make their lists available for rent, and their data is probably more current and accurate at the levels you’re really targeting.
  3. Determine your targets’ pain points. What problem does your product or service solve? It’s probably different by vertical industry and by job title/function. Rent your list and use an outside research firm to contact prospects to help identify the challenges facing them in your particular area of expertise.
  4. Gather sales support assets. Use the information gathered in Step 3 to reposition your product, create new white papers or industry articles aimed at different functional areas within each company. Review existing case studies and determine how you can refresh and repurpose them by vertical industry based on your new found insights. Create assets digitally and in hard copy so you can use them in fulfillment and follow-up efforts.
  5. Create a destination of information. Before you start reaching out to prospects, create an online destination BEYOND your existing web site. Organize your new assets by vertical industry, as most organizations want to know that you understand and have experience in their category. A healthcare company, for example, will probably not have the same challenges as a financial services organization. And it’s most likely that your solution wouldn’t be identical either.
  6. Execute an outreach program. Now that you know your top four or five verticals, you’re ready to tap targets on the shoulder. Create a campaign by vertical target in order to highlight key benefits that are most relevant to that target (you should know what these are as a result of your research in Step 3).

All your outbound communications to each of these job functions within each of your target verticals should be different. The individual in finance, for example, will want to understand ROI while the individual on the technology side might be concerned about how well your product can be integrated into existing technology.

Your research should have already helped you identify the pain they’re facing, so leverage that learning in your communications. Whether it’s the initial contact, the follow up materials, or the landing page, mirror what you’ve heard to make the conversation most relevant from the beginning. Your participation in industry events and conferences should help you establish the correct tone and language in your communications.

B-to-B marketing should never apply a “one size fits all” strategy. The more relevant your communications, and the more you can demonstrate that you understand their particular industry and business challenges by tailoring your solutions, the more likely you are to engage in a meaningful discussion with your target. Listen to feedback and refine your communications accordingly. And yes, the results will be worth it.