Monday, 31 March 2008

How much do you REALLY know about your customers?

How much do you REALLY know about your customers?

I recently met a new client who told me that he knows very little about his customers or the reasons they buy one product in preference to another. As shocking as this might sound, I’m almost certain he’s not alone. A great number of businesses we speak to can tell you all about their sales figures, about their average order values or about the number of new customers they have acquired. But when it comes to actually knowing what a customer thinks of them or perhaps more importantly, the business’ perception of themselves compared to that of their customers, then very few have a clear understanding of what makes their customers tick.

Perception mapping

In our experience, a simple solution to this problem can be to conduct a questionnaire to both internal stakeholders and a business’ customers and then analysing the results using perception mapping. Perception mapping uses survey data to provide a visual representation of the perceptions of diverse segments, in particular, highlighting key differences. It is particularly useful when analysing the differences in perceptions from a company and customer point of view in areas such as service levels and product quality. Perception mapping can help prove or disprove the perceptions or assumptions of a business and identify gaps in the service or product offering.

Are customer survey’s a little “old hat”?

People may argue however, that customer surveys are a little “old hat” or that they struggle to get significant enough responses to allow accurate analysis. Again in our experience, if the right questions are asked in a non-intrusive way, using the most appropriate medium and to the right customers (and by that I mean ones who have an existing relationship with the business), then response rates can be surprising. We have seen response rates from online customer surveys as high as 75% and that’s without offering an incentive to respond. Clearly it helps to have a very receptive and loyal customer base in order to see response rates that high but other surveys we have run on behalf of clients regularly get response rates in excess of 25% which gives more than enough accurate data to perform detailed analysis… providing enough questionnaires were sent in the first place obviously!

Questionnaires…a great way of getting customer insight

Questionnaires are also a great tool for cleansing or filling gaps in your customer profile information… without customers feeling as though they are being interrogated by the Spanish Inquisition. Any analyst will tell you that having information like date of birth, occupation or postcode in customer data is invaluable when it comes to accurate profiling and segmentation or building customer insight initiatives such as propensity models. By clearly stating the purpose of the questionnaire (i.e. to improve customer service or help with product development) and asking carefully planned, relevant questions, detailed information on customers can be built-up and incorporated into database profiles.

…And to conclude

So in summary, here are a few points to remember and some advice about the successful use of customer questionnaires and surveys:

• Planning – think about why you want to perform a survey in the first place. Is it to address a specific business objective, to prove or disprove a theory or to gather valuable profiling data?

• Relevance – Make sure the questions reflect the information you want to gather and that they are relevant to the customers purchase behaviour… there is no point in asking a question if no action can result from its answer!

• Objectivity – Try and make your surveys and questionnaire as objective as possible, after all you want your customers to be honest in their responses even if the results make for difficult reading.

• Channel – If all your customer interactions are conducted online or via email, then it’s a good idea (if not an obvious one!) to conduct a survey via the same channels. Online surveys give the added benefit of direction integration into marketing database systems without the need to data capture the results.

• Format – Complicated questions in a poorly designed format will only serve to dissuade customers from responding. Equally, complicated questionnaires with lots of free text will make data

• Analysis – Most companies would say that they analyse the results of the surveys they have conducted but in our experience, very few actually get the most from the data they capture. Using a specialist data analyst or customer insight company can really help unlock intelligence in data and help you get the most from a customer survey.

But what do you think? What response rates have you seen and how successful have your surveys been?

Wednesday, 26 March 2008

Database Marketing – Five Top Tips

Most marketing professionals understand the reasons for collecting good customer and prospect data and most also understand (in theory at least) what to do with that data.

However, one thing that never ceases to amaze me is the number of businesses that don’t get the best from their data. So for that reason, below are some basic tips for using and getting a return from what has the potential to be a huge asset – your database.

Keep it clean – There’s no point in collecting huge quantities of customer and prospect data if it isn’t regularly cleansed and updated. With customers moving around frequently and more and more people subscribing to TPS and MPS, you need to give your campaigns a fighting chance of success by starting with a clean and up-to-date database.

Unlock the intelligence – Most customer databases have a story to tell and can offer so much more than just a mailing list. Modern customer insight and data mining techniques can add real value and help drastically improve the success of marketing campaigns by targeting customers that are statistically more likely to buy your products.

Make it relevant – How many people have received marketing messages from a company that they have an existing relationship with but which are completely irrelevant to them? If you have transaction and sales information in your database (or you can prise it from your Accounts Dept.) then you’ll know what your customers buy, when they buy it and how likely they are to buy related products… Why not use this information to make your campaigns 100% relevant to your audience?

One size doesn’t fit all – If your message is relevant and timely then your campaign should succeed - right? Wrong! Make sure you give consideration to the communication medium, not all of your customers and prospects will respond (or welcome) traditional DM no matter how relevant the message. Today’s marketing professionals have a wide range of channels available to them from email, SMS and DRTV or even good, old fashioned, telemarketing. Trial and measure your campaigns across different mediums before rolling them out completely - different customer/prospect profiles will respond to different channels.

Learn from experience – So your data is clean, your message is relevant and the communication channels have been chosen, the campaign goes live and the results are encouraging, happy days! Well of course that’s good but the results of even the most successful campaign can tell a valuable story and inform your next campaign. One thing we always advocate is analysing the results of a campaign to understand factors such as which channel brought back the best response rate, what the profile(s) of the responders were and the time lag from message delivery to response. These factors (and more) will all help your next campaign to become even more focussed and help target the customers/prospects most likely to respond.

If you pay attention to this advice and ensure that your database continues to evolve and grow, then your marketing campaigns will have every chance of success. But we’re keen to hear your feedback and experience, what database marketing techniques have proved most successful for you?

Customer Churn – Not just Your loss, but Your Competitor’s Gain

Very few businesses can claim to achieve 100% customer satisfaction and 100% customer retention despite the fact that these - theoretically – would be the goals for any self respecting business. Given that you lose customers, the issue is how easily you can identify the real value of a lost customer. In these days where word of mouth marketing and social networking become more and more prevalent – does losing one customer result in a knock on effect? Could your ‘accepted’ customer attrition be hurting you more than ever before?

These questions may be difficult, if not impossible to answer. They’re the classic Economist’s Opportunity Costs. They are challenging marketing personnel the world over. However, there is a simple solution – real customer insight can enable you to pre-empt customer churn. If you had a means to identify that customers were about to defect, then you would take appropriate action to retain them. As we are always told – it is less expensive to keep a customer than it is to find a new one. So who has this magical crystal ball?

Many analysts assess customer profitability and make assumptions and calculations on ‘life time value’ – however, these become worthless if you lose the customer! You can’t implement your customer relationship management if you haven’t the customer to relate to anymore!

Remember, if your customer stops buying from you that’s bad enough, but what makes it worse is they are probably buying from your competitor. That’s lose-lose for you in anybody’s eyes.

Wednesday, 19 March 2008

Propensity Modelling: The Green Option

The advantages of propensity modelling are well documented: it allows you to score and target the right customers, optimise resources and avoid indiscriminate mass marketing. However, the impact on the environment should not be overlooked.

In 2006, direct mail accounted for 500,000 tonnes of paper. That’s a big impact on the environment, especially considering the significant amount that would have been thrown away unopened, let alone unread.

Of course, the materials used, accurate suppressing and the cleanliness of data are viewed as playing a significant role in lessening the environmental impact of direct mail. Propensity modelling should be viewed in the same way.

Propensity modelling allows an organisation and its marketing department to score and target customers based on their propensity to act in a certain way, for example, the propensity of a customer to take up an offer or respond to your call to action.

By sending direct mail to only the customers you believe your message or offer will be relevant to, not only will you see better response rates from your campaigns, potentially maximising profitability, you can also reduce your below the line spend and your impact on the environment. Truly targeted and relevant direct mail means a reduction in paper usage, production of printed material, printing inks, delivery fuel and use of packing machinery (and related energy consumption), thereby helping the environment.

And ‘Green’ credentials or environmental impact are becoming increasingly important to consumers who are looking to make an informed choice about their purchases. Recent research has shown that people are more likely to buy from companies who are carbon neutral, fair trade, or involved with charitable work.

Publicising your company’s investment in areas such as sustainable consumption, environmental management systems, environmental accreditation and charitable donations can all help reinforce your brand values and develop productive customer relationships.

What are your thoughts on Propensity Modelling?

Customer Insight vs. Management Information

We talk to a large number of companies who believe they are maximising their customer insight opportunities. However, on further examination it becomes evident that, whilst many do have effective management information systems, they are not taking full advantage of the insight they can gain through their customer interactions.

So, what are the differences between customer insight and management information? There are no hard and fast rules and often they overlap, but the following provides some basic distinctions.

Management information is delivered by developing prescribed data queries based on a pre-determined requirement. Customer insight is delivered through database and knowledge base exploration, evaluating theories and developing data models, sometimes utilising complex data mining algorithms.

Of greater significance is that, whilst the output of management information tends to be paper based/electronic reports and/or presentations (e.g. weekly sales reports/campaign response rate presentation), the output of customer insight will tend to be deployable and measurable customer relationship initiatives used to acquire, develop and retain the right customers (e.g. retention programme/targeted direct marketing extract/pricing rule change).

We’d like to hear you views on this subject matter. Do you feel that management information is used effectively in your business? What would you like to get out of your systems?

Tuesday, 11 March 2008

Cutting Edge – Phone Rage (Channel Four, 6th March 2008)

So Channel Four has uncovered deep customer dissatisfaction with call or contact centres; with outsourcing overseas; on-hold music; voice managers – press one for; and the like…

How did the programme inform – is it representative of the call centre industry or just of EVERY company that has a telephone help desk, enquiry line, complaints’ department, etc., etc.?

What the programme failed to address is why many of these ‘departments’ have to exist in the first place. If companies took advantage of the vast amount of information being provided by their customers, when they bother to call, they could easily overcome many of the issues raised. A highly experienced colleague once continuously asserted in training, "that a complaint is a positive buying signal" – and whilst at the time it always seemed bizarre – over the years it is clear she was absolutely right.

Why do companies fail to engage with their customer facing staff – whether in-house or outsourced - and use the information that is provided daily to enhance and improve their product and service offering?

What became clear is that people are principally calling because of a process failure – they were less concerned with where the call was answered but more with how quickly their problem was resolved. Was it resolved without multiple call transfers, did they have to re-explain the issue, were staff empowered to make decisions?

For many businesses the focuses of their call centre – in-house or outsourced – are call length and cost; they are still rarely about customer and service insight; about relationship development and sales opportunities (even when things go wrong!) and that, for me, is where the programme missed its Cutting Edge opportunity.

Monday, 10 March 2008

Customer Service is king in the land of increasing product choice

What’s the definition of good customer service? We can all give examples of where we’ve experienced that warm, fuzzy feeling from being treated as a valued customer and perhaps even more examples of where we’ve been left feeling decidedly turned off after yet another interaction with an obnoxious customer services agent. But have you ever stopped to think about the quality of the product or service in each case… Good service relating to a mediocre product or worse, dreadful service relating to a supposedly excellent product?

Customer service; the good and the bad

Case in point – I recently went for a meal at my favourite local restaurant which is usually excellent for both food and service but on this particular occasion something wasn’t quite as normal. From the moment we stepped into the restaurant things got off on the wrong foot, we couldn’t have our usual favourite table and instead were stuck in the middle with waiting staff brushing past every thirty seconds. “Fair enough” I thought, “they’re busy and I can’t always have my own way” but then we had to wait ages for them to take our order after being seated which is never a good start!

When the food did arrive, the waitress seemed more interested in what was going on behind the bar than serving us and the meal didn’t seem to be quite as tasty as usual. Now whether that was because it genuinely wasn’t up to the chef’s usual high standards or because my taste buds had somehow been affected by the below average customer service, I’m not too sure, either way, that warm, fuzzy feeling was strangely absent. Again, when it came to paying the bill, what I would normally think is quite a reasonable amount for dinner and wine at what is after all, a supposedly upmarket restaurant seemed rather on the expensive side.

Fast forward to the weekend and my partner and I decide on the spur of the minute to visit the new Indian restaurant close to where we live. I was a little sceptical about being able to reserve a table at such short notice but was pleasantly surprised when the Restaurant Manager said it wouldn’t be a problem, (box number one firmly ticked in the “excellent customer service” category).

We duly arrived on-time for our meal and we were greeted by the warmest welcome I’ve ever had whilst being ushered to a discrete table that’s perfect for people watching (my partner’s favourite pastime!). After a bit of friendly banter with our waiter, we ordered our food which then arrived a short while later and I tucked into my favourite King Prawn Bhuna which definitely tasted better than I was expecting. More smiles and chatting with the waiter, an offer of complimentary drinks and it’s time to pay the bill. “Very reasonable” I thought this time (to be honest, it was perhaps a little towards the top end of the scale for an Indian meal for two) but I gladly paid and left a generous tip too… “We’ll definitely be going back there again”, my partner and I both agree.

….And the point being?

Now you might be wondering what I’m ranting on about (or thinking this person eats out too much) but what these experiences highlight for me is how a few small things can make a massive difference to how a customer perceives your product. It’s not a difficult correlation to make; excellent customer service can seriously enhance your product’s positioning in the marketplace and increase your brand value too. Likewise, poor customer service can do a huge amount of damage to your brand, costing you customer loyalty and affecting your market share (not to mention the bill your PR agency will charge for fixing the problem).

So my advice is this, you may have the best product in the world or you may be competing with fifty other suppliers in a highly competitive market place but in order to gain the competitive edge and increase customer loyalty, you need to get your customer service function spot on. This can be done by either:

a) Outsourcing your customer services to an industry expert such as an experienced contact centre, therefore allowing you to concentrate solely on what you do best, producing exceptional products, or by:

b) Employing experienced staff, maintaining high standards through continual training and immediately dealing with any issues that arise.

Whichever route you decide on, treating your customers as valued individuals will always ensure they have that warm, fuzzy feeling and stop you losing them to the competition.

We’d really like to hear your thoughts, should customer service be king?

Welcome to the new blog of EWA Bespoke Communications

EWA is an award winning relationship management agency and we specialise in providing outsourced marketing services including:

Database Marketing
Customer Insight
Contact Centres
Response Handling
Print & Fulfilment
Relationship Management

We have been in business for over twenty five years and provide outsourced customer relationship management programmes for clients such as M&S, Nissan, adidas and Merial Animal Health.

As an outsourcing agency, return on investment is ingrained in everything we do at EWA and clients need to see a return on the trust and financial commitment they place with us. That is why every campaign we handle is strictly managed to agreed service levels and outcomes are analysed to gauge their effectiveness.

To give an example; approximately three years ago EWA highlighted to M&S the need for a customer retention programme in order to help reduce customer churn. The programme that was developed and put in place by our Systems and Customer Insight team has today seen customer churn levels reduce by 20% which represents an additional £750,000 worth of orders since the programme’s inception… impressive results we hope you’ll agree.

The reason for launching our new blog is simple… we have a lot to say! EWA has been a market leader in customer relationship management since 1981 and we want to share our knowledge, create debate and discuss areas of work which we are passionate about. As with all blogs, it will be a work in practice so please check back regularly and feel free to send us your feedback on any of the topics we write about.

The blog will become the voice of EWA and will be contributed to by experienced staff in senior positions across the company. We’ll be discussing topics as varied as customer service and the benefits of outsourced contact centres to getting the most from your data and how eMarketing impacts our lives.

We believe we have expertise in supporting outsourced marketing services for our clients and our blog is an opportunity to tell you about what we do; for you to question us; challenge us; learn about us and most importantly engage with us!

We’re looking forward to your thoughts and comments and welcome anyone to join the online conversation!