Product Direction in Action

Being a tentative member of the Digital Generation (I’ve got a Facebook account and I own an iPod so I just about qualify) I thought it was time I got round to loading my CD collection onto my PC and using Apple’s iTunes application for more than just loading the odd song to my iPod.

Having spent almost every evening for a fortnight loading all my CDs into iTunes I discovered a great new feature called Genius. Basically it allows you to play a song, click the Genius button and iTunes then creates a playlist of other songs from your library that go well together. It also recommends new music, films and TV shows that it thinks you’ll like based on your current library and you can preview and buy the recommended items with a single click from iTunes.

Being a bit of a sucker for a gadget I spent quite a while playing with the Genius feature, creating playlists covering all different sorts of music (I have an eclectic music collection) and each time the selection Genius came back with was more or less what I would have chosen myself and in some cases it was probably better.

The recommend new music feature also led to my first paid for music download. Up until recently I have been firmly in the buying CDs camp meaning I’ve often bought them on the strength or one or two singles from a band or a friend’s recommendation. The thought of downloading music and not really ‘owning’ a physical copy hadn’t really appealed… until now. I’ve only downloaded a couple of singles and podcasts so far but I’m beginning to see the attraction, why buy a whole album only to find out you only like half of the tracks on it when you can just buy the ones you like?

It has to be said that I’m a Marketing Managers dream when it comes to features like this which is ironic considering what I do for a living but I love functionality that adds real benefit to the user and is not just a cynical sales or marketing tool. The iTunes Genius feature is one of the best examples of product direction I have seen recently and is up there with Amazon’s ‘customers that bought X also bought Y’ functionality. Both work in a similar fashion and use product or service association to recommend items that the user is statistically likely to find appealing and let’s face it who hasn’t spent more with Amazon than they intended as a result!?

It’s a relatively simple concept; analyse the purchase patterns or online behaviour of previous customers to build product associations and understand which combinations of products customers are most likely to buy. These associations can be used to drive cross-sell and up-sell opportunities by marketing and promoting the associated products together. This is particularly relevant and successful in the ecommerce sector but can be used in offline marketing as well as Digital Marketing.

So congratulations to Apple on another innovative product introduction...now it’s got me thinking which of our clients could use a similar product direction tool?

Buying Online is Painless Right?

I’d like to talk about a recent experience I had while shopping for my husband’s birthday present. I wanted to buy him some clothes but didn’t have enough spare time in my busy schedule time to go to the shops. The perfect place for me was obviously online; shopping at whichever shops I wanted all under one roof, no rain, no fighting for car spaces and most importantly, no hordes of people.

After some virtual ‘window shopping’ I finally found the perfect gifts all on one well known site for less than I had hoped to spend. My total basket came to £150 and I was very satisfied with my shopping experience, all I needed to do was pay but this was where my nightmare began!

I only had 10 minutes left before work but for some reason my account wouldn’t accept my password so I followed the instructions and my correct password was emailed to me instantly. Although it was the same as the one I had previously entered, I was impressed by the speed of the response. However, when I tried to log in again, an error message flashed saying I had tried to log in too many times and had now been logged out for half an hour! My happy online shopping experience was slowly fading away.

An hour later (just to be on the safe side) I tried once again to log in but still nothing. After a further two hours of receiving the same message I was more than a little annoyed and started trying to find a help line I could call. Surprise surprise, there was no customer service number listed, only an email address. I Googled the company and found a number for their head office.

Whilst the lady I spoke to was very polite the only help she could offer was “I’ll email customer services and they’ll get back to you within the hour”. I informed her I had done this 3 times already over 3 hours ago and hadn’t received a response. “Well that’s the best I can do for you I’m afraid, but I will mark it as urgent”. Great, this was not going well at all and I was beginning to lose the will to live.

I tried to forget about my little shopping drama and move on, feeling very frustrated. I wanted to shop but no one would let me, my husband does that enough I thought, I don’t want my favorite online stores to stop me as well!

At around 4pm that day I received a call from the Customer Care team but they weren’t particularly interested in hearing my vent. They just wanted to tell me I could back log in but all I wanted to do is tell them about what had happened, after all, feedback is important right? I asked the Customer Care agent to stay on the phone while I logged in which she agreed to with a very loud huff, making me feel like I was keeping her from something infinitely more important.

At last, I managed to log in and tried to pay for my items realising though that I couldn’t as the contents of my basket hadn’t been saved. Marvelous, all I want to do is spend some money with them! So back I went and started to look half heartedly for my items. I found the first which was a jumper but it’s sold out in the size I wanted… argh!! I shut down my browser and threw a bit of a tantrum in the style of my 3 year old son, much to the amusement of my work colleagues which left me feeling a bit silly.

After work that night I drove to my local shopping centre and found all I needed within half an hour (a new personal record). Any questions I had while shopping, the staff in the shop concerned solved immediately. I got home exhausted but happy and feeling good for getting my shopping fix… I also gave in and treated myself while I was out (well you would, wouldn’t you!)

Looking back on the whole experience, I honestly think that if I could have picked the phone up and spoken to a real person the second my password stopped working I would have placed my order by 8.30am and been a very happy girl. Instead they lost my order and any future purchases as I really do not have the time (or indeed inclination) to deal with these kinds of issues again. I was a very loyal customer spending on average £100 a month, £1200 a year, maybe £2000 if you included shopping for Christmas last year but the whole debacle put me off using the store again. It’s a shame but like so many people when things go wrong you just want to talk to someone.

I’d be interested to hear about your online shopping experiences, have you had the same frustrations and are e-retailers missing a trick by directing us to only deal with them via email?

Why it’s Important to do your Homework

It’s Thursday afternoon and I’ve just had a second cold call in as many days from a telemarketing agency trying to sell their services to me. Whilst I can’t complain about their enthusiasm or technique (the last lady who called was particularly polite), if they had done their homework beforehand they’d have realised that we’d be competition for them. Looking at this in isolation you might think it’s not a huge issue, it’s just some poor telemarketer being forced to grind out 20 calls an hour working from an excel spreadsheet and from that perspective you’d be right. However, look a bit more closely and you’ll see that that kind of untargeted, scattergun approach is the worst kind of marketing faux pas you can make and here are the reasons why:

1. It’s a waste of their time and yours. If the telemarketer has targets (and lets face it, who doesn’t?), that’s one less genuine call they could have made.
2. Brand damage. For a company that pitches itself as a ‘targeted B2B telemarketing agency’ making untargeted calls surely goes against their ethos?
3. Cost. The agency had probably bought the data list that our company is on, paid the IT person that loaded it into their database and paid the telemarketer at least a basic salary (that’s without taking into account any kind of overheads) – so what’s the true monetary cost of that call?
4. Annoyance factor. I’m a fairly level headed kind of guy and not prone to writing complaints or ‘disgruntled of Guildford’ letters (except maybe for this blog) but it is extremely annoying to receive calls from agencies that clearly have no idea about what we do.
   

As a new business person myself I spend a great deal of my time either pitching to prospective new clients or researching businesses that I can approach with our service offering i.e. businesses that appear to have a genuine need for what we do. Clearly there is an investment in terms of time to conduct this research but what it does mean is that it increases the chances of each approach I make being successful – or to put it another way, it removes a great deal of wasted time trying to talk to businesses that will never have a need for what we do.

And that’s really the point of my long-winded rant, taking the time to research prospects before you contact them, be that via email, DM or telephone can make a huge difference to your success rate and position you as a thoughtful, professional organisation.

There are number of ways to ensure you get your targeting right. If your new business team has the luxury in terms of time and can Google each prospect before they call them then great, if not a fairly simple customer profiling exercise should be undertaken before you purchase new data. That way you can identify the profile of your most profitable customers and purchase data which matches that profile. Or to be even more targeted, you could bring predictive models in to play which use multiple variables to statistically predict which businesses are most likely to purchase your products or services, giving you a pool of prospects that are genuinely likely to be interested in what you have to say.

Anyway, enough said, that’s my rant over; I’ll get back to praying to the cricket Gods for an England win next week and avoiding cold calls!

Spend or Save? - Tactics to Survive a Recession

Spend or save? – what are your tactics to survive an economic downturn or recession?

History shows that at times of economic down turn or recession, one of the major impacts to business is either a lack, of or slow down of decision making – particularly in terms of marketing spend or customer communications.

Clearly it is important at any time to understand the value and return on investment of your spend and also the potential impact of hesitation or the ‘Ostrich Syndrome’ – but when things are tough it’s not just important, it’s essential.

Through Customer Insight, we can examine trends in customer behaviour and most importantly value – this enables critical decisions to be made about where and how to make the best use of potentially limited spend to positively influence customer actions and decisions.

How much do you really know about your most profitable customers?

What proportion of your customer base contributes limited or no profit to your business?

Which customers are ripe for development – and when?

How much do you understand about the customer journey, your interaction and the touch points – by individual?

What impact are your communications having on customer behaviour and spend?

If you can’t answer these questions accurately – the chances are your spend isn’t working hard enough for you and at worst your messaging and communications are confusing, unrewarding, impersonal, and have little or no impact. The good news is that the answers probably lie in your data – all we need to do is find them.

Now is not the time to postpone or cancel your interaction with your prospect or customer base – but it is absolutely the right time to pay much more attention to whether your communications add any value to your relationship with the people that can influence your business future – it costs surprisingly little to find out!

Online Retail and Customer Insight – The Perfect Partners?

Online retail not only offers companies an efficient and economical sales route over more traditional channels but also provides an invaluable resource of customer data and behavioural trends. The only question for marketers is how to put this wealth of information to best use?

In my view there are two options:

1) Sit back and do nothing hoping that the various presumptions about your customers and their buying trends continue to hold true

2) Unleash the power of your data through a combination of customer insight solutions to understand the unique nature of each customer’s buying behaviour.

Any business focussed on acquiring, developing and retaining the right customers - and in doing so benefiting from increased profits - will of course choose the second option. So which customer insight solutions can be deployed and what are the actual benefits that can be realised as a result?

Propensity Modelling - Through the profiling and segmentation of existing customers, propensity models can be designed to predict how they may behave in the future, based on past events and score them accordingly. This greatly increases the chance of a successful campaign by only communicating with prospects for which your message is relevant and avoiding indiscriminate mass-marketing. Essentially propensity modelling helps target the right audience to reduce cost and positively impact customer conversion and up sell.

Cross-Sell Modelling – The purpose of cross-sell modelling is to identify product association trends in transaction history. The analysis would identify trends of which products customers are most likely to buy in conjunction with another product. Whilst business knowledge and intelligence says that some products and services will naturally go together, analysis usually uncovers hidden associations. These associations can be used to drive cross-sell and up-sell opportunities by marketing and promoting the items together with the ultimate effect of increasing the value of each customer’s order.

Retention Programmes – In the current economic climate businesses are being forced to focus on their customer retention programmes (and in some cases formulate them). Of course the more astute companies will have prioritised this tool throughout – research shows ‘that acquiring a new customer costs five to seven times as much as maintaining a profitable relationship with an existing customer’, (Marc Fleishhacker: Ogilvy Consulting). The difficulties with retention though are; are you retaining profitable customers; and ensuring that your message to a customer at risk of lapsing is relevant, timely and delivered via the right channel. The mistake that many companies make is to take a broad brush approach to retention and target customers in large clusters with the same message. EWA’s Critical Lag programme is specifically designed to address this problem. It involves analysing the frequency and time lapse between customer’s purchases or interactions to identify lag trends. Based on this analysis, individual customer communications can be tailored to deliver specific messages designed to encourage customers to continue their relationship.

I have highlighted just a selection of the customer insight programmes that can be used others such as geo-demographic profiling, the application of the Pareto principle, impact assessment and forecast mapping will provide another layer of valuable, detailed information.

Deploying any customer insight programme is of course just the first stage, determining how you incorporate the insight gained into your marketing communication programme becomes the next focus. So look out for the second part of this blog in which I will focus on the types of customer communications that insight programmes can drive.

When is a lapsed customer not a lapsed customer?

What defines a lapsed customer? Tricky question isn’t it, is it a customer that hasn’t bought from you in last six months, twelve months, or eighteen months even? Now I know some of that comes down to what your company produces, (for electrical retailers for example, it’s probably not that unusual to see “regular” customers who purchase once every eighteen months), but surely there must be a way of actually quantifying which of your customers have actually lapsed or are in danger of doing so?

And then there’s the question of how best to reactivate those lapsed customers; or more importantly, stop customers getting to the lapsed stage in the first place.

Something as simple as a personalised email can be the solution - but if you’re thinking of sending bulk email campaigns to all your “lapsed” customers, stop right now. Treating everyone the same is not the answer! And here’s why…

Imagine your business sells electrical components to the repair industry, supplying buyers from the one-man-band, TV repair man to big household name electrical retailers.

You have a considerable pot of loyal customers who purchase regularly but who each have quite unique purchase patterns. The big electrical retailer buys large quantities of components on a weekly basis whereas the small TV repair man buys the odd component once or twice a month. Both are loyal customers and both purchase regularly - in their own way.

And this is the key point to make. If the TV repair man went for a month or two without purchasing, it wouldn’t be too far outside of his usual behaviour but if the big electrical retailer didn’t purchase for two weeks that would be a problem. Treating both the same when it comes to being lapsed (i.e. contacting them after six months of no activity) would mean potentially losing a lot of revenue as you would have six months without the big electrical retailer buying from you. Also by this stage, they’d have most likely gone to your competition so trying to reactivate them would be nearly impossible.

So as you can see, treating each of your customers as individuals is absolutely key to managing any lapsed customer programme. It removes the broad-brush approach and means that whenever a customer lapses or looks like they might, you’re on the case immediately and can hopefully stop them going elsewhere.

So how do you go about implementing a programme to address the issue of lapsed customers? Well one way would be to consider EWA’s “Critical Lag”.

Critical Lag is a programme designed and developed by EWA’s Customer Insight team to identify customers whose buying habits show the potential to lapse. It can then deliver customer specific communications to significantly improve retention, reduce churn and help to build brand loyalty.

In a nutshell, Critical Lag is a set of business rules and algorithms which can be deployed to a marketing database and used to determine when a customer has fallen outside of their usual or expected purchase behaviour. This will trigger a communication to the customer. The key thing to remember is that Critical Lag looks at each customer’s unique purchase behaviour and only triggers a communication when they cease – or change - that behaviour.

The communication that follows can be sent in a number of different ways, that’s really down to you and the type of products you sell; but as with all marketing campaigns, relevance is key. So perhaps an email designed to encourage customers to return or to promote relevant products. Segmenting your customers by value is also worth considering so the most valued customers (in terms of their value to you) would perhaps receive a phone call with an incentivised offer whilst other medium value customers might receive a simple “we miss you” email or text message.

To give you an example of where this programme has been successful, Critical Lag has been implemented by EWA for a retailer as part of their customer communication programme. Over a three year period the programme has increased annual revenue by around 7%, generated approximately £1,100,000 of additional orders and has increased customer retention by 20%.

So, as I’m sure you’ll agree, a lapsed customer may not always be truly lapsed and treating your customers as individuals will always deliver better returns than lumping them in with the herd.

But what are your experiences, is customer churn a major problem for your business, and are you acquiring fewer new customers than those that you lose? We’d love to hear your thoughts.

Being Green can help your profit margins

Everyone is talking about going “Green” and corporate social responsibility. But unlike a lot of people, we at EWA are doing something about it and so can you.

EWA understands the benefits of going Green, not just to the planet but also to a company. We are not suggesting you become eco-warriors, although we would be more than happy if you do become one! We don’t want to brainwash you or make you feel guilty about the way in which your company operates its marketing campaigns. What we will do is help you do your bit. ‘More action and less talk’ is what we say.

Over the last few weeks I have monitored my post. The amount of untargeted, un-personalised direct mail I receive each day is amazing. Not only is this hugely damaging to our planet, but it costs the companies who produce it a small fortune. None of this post has had ANY relevance to me at all. Now, I’m a girl who likes to shop, but I’ve not made a single purchase or registered with any of the companies that have contacted me. If I had been sent information related to products that are relevant to me then I would have been more likely to buy from the companies concerned. I’m afraid to say all the post I received went in the recycling bin, apart from one mailing that was delivered on recyclable paper which I actually took the time to read. What a huge waste of money and our planet’s resources.

Direct Marketing can cost companies huge amounts of money and because of the untargeted nature of some campaigns; often little return on investment is seen. Some surprisingly do not even monitor the campaign’s success or track the volume of responses. As my Mum would say, “you may as well chuck your money down the drain”!

In today’s world, being Green does not only help the environment, but can also help your company’s profit margin too, something I’m sure you are interested in. So what can you use to help you become Green and see a better ROI from your marketing campaigns? The answer is simple - Customer Insight.

Customer Insight is in my mind a green weapon that all companies that care about the planet and profit should be using. Customer Insight is the collection, deployment and translation of information that is essential for a business to acquire, develop and retain the RIGHT customers.

Customer Insight makes sure all communications to potential clients and existing customers is relevant to them as individuals, avoiding mass marketing, huge amounts of paper wastage and cost.

Customer Insight is an essential marketing tool in an increasingly competitive market place. A greater understanding of your customers will help you position products to them that are relevant and help promote loyalty, something that can only be good in today’s financial climate and above all it will give you piece-of-mind that you know your customer and what they want better than anyone else. You will increase your profit, save money AND help save the planet. Sounds good doesn’t it? So why not give it a try and see if you can do your bit and go Green with the added bonus of a bigger profit margin.