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Using Customer-Driven Marketing to Act Like the Corner Store 

Larry Mosiman | Aug 18, 2010 852 views No Comments

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I like shopping at my local grocery store. The employees recognize me and we shoot the breeze while they ring up my purchases. It makes for a pleasant experience, one of the reasons I keep coming back. But while it’s close to the bygone days of the general store, it still falls a bit short.

Back then, personal relationships were the heart of the business. Shopkeepers enjoyed what we now call a high offer-to-response ratio: they used personal knowledge to offer something you were likely to buy—at the right price at the right time.

While such a personal experience is unfeasible in our era of mega-stores and online outlets, customers still want to feel recognized and appreciated, whatever channels they use to browse or buy. They want relevant offers that show you understand their needs and that match their shopping and communication preferences.



So, how do you act like the corner store when marketing spans multiple contact channels and the customer is a moving target?

Aaron Cano gets it. The former Vice President of Customer Knowledge at 1-800-FLOWERS, now Vice President of Customer Insight at MBS, is a strong proponent of customer-driven marketing.

About identifying influencers and using that information across multiple channels and brands Cano says “We’re talking about understanding the customers’ personas and making real-time decisions, using information at the point of contact to change the conversation with them, to engage them in a real-time environment.”

Cano has six recommendations to achieve exceptional customer insight:

1. Rethink customer relationship management (CRM).

Cano says CRM is no longer about promoting things to customers, but building relationships with them, via a “mutually profitable exchange of offers, services and communications.”

This process must be embedded at all organizational levels and optimized in four key areas:

  • Customer insights. Base segmentation on customer behavior and third-party data that delivers deeper customer knowledge, particularly about your highest-value customers.
  • Message relevance and timeliness. Use customer insights to develop proactive communications that consider not only on what the customer is likely to purchase, but also what motivates and influences choices.
  • Contact optimization. Develop specific, differentiated and dynamically adapting contact strategies for each customer-value segment and promote collaboration across channels and business units.
  • Customer acquisition. Once you know what your high-value customers look like, proactively identify and acquire more like them—you’ll start off with a good idea how to interact with them successfully.

2. Break down the walls between channels.

Looking at channels in isolation provides a fragmented customer picture. “A Web visitor who appears to be of low value might do significant business in retail locations. That affects how you treat her,” said Cano. “We need to optimize all touch points together for one holistic view.”

3. Segment based on persona, not just demographics and transactions.

Marketers have always known that finding out what makes customers different—age, income, zip codes, value tiers, etc.—and treating them accordingly makes marketing more effective.

What if you could also segment based on an understanding of your relationship with them as well? That’s persona marketing.

“Persona marketing adds a qualitative element to a segment. Understanding why customers behave the way they do and what influences them enables you to adjust the tone and manner of your communications with them,” Cano said.

Persona marketing works because is based on understanding what makes customers tick.


4. Consider customer lifetime value, not just past history

Acting only on a customer’s present profitability, marketers could misjudge and mismanage the relationship. Customer value does not stand still. But a retrospective view doesn’t account for likely future changes in customer behavior, market conditions and product life cycle.

To consider future profit potential of customers, marketing and sales teams have begun considering customer lifetime value (CLV)—the net present value of the likely future profits from a customer. CLV shows you which customers will offer the highest value over the course of their relationship with you, which in turn identifies core attributes you should look for in prospects.

“Depending on the brand, it might not matter what a customer purchased 15 years ago,” said Cano. “But if I knew the potential dollar value of that customer at a point in time, I could adapt my offers and my investment.”

5. Capture information from every touch point

“We have so many channels—Internet, call centers, in-store, wireless and mobile, direct mail, third party, newspapers,” said Cano. “where customers are interacting. Each offers a way to listen, differentiate and gather information. Every contact is important. Every contact is an opportunity to learn and to engage.”

Combine customer data from all those points of contact, from multiple channels, and disparate data collection systems and you create a holistic view, Cano said. That data foundation is essential for understanding the customer’s complete needs and value to the business.

All customer interactions are opportunities to communicate with a customer to deliver messages, listen to their needs, and observe behaviors.

6. Use that customer information now, during the customer’s visit

“Once you understand your customer segments by persona, you can differentiate your conversations and offers,” said Cano. He emphasizes analytics: descriptive analytics to identify high-value customers and persona attributes, test-and-learn cycles to continually refine that knowledge, and predictive analytics to anticipate the impact of marketing decisions.

“All of this is moving more toward adaptive learning,” said Cano. “Somebody comes to your Web site and browses around; his online activities give you new information about his interests and preferences. Based on that new knowledge, you change your conversation with the customer in a real-time decision process that ultimately drives more engagement and loyalty.”

Adaptive learning can be applied in different ways, depending on the channel. For instance:

  • In the store: place scanners throughout the store for customers to check prices, create wish lists or research product details. Use the information to generate custom coupons or send real-time offers to the customer’s mobile device based on what the customer has scanned and the customer’s profile.
  • On the Web: leverage click-stream data and customer knowledge to direct the customer to a different page, change banners, alter offers, or communicate real-time and offers via live chat. Order confirmation notices could change based on the customer’s history and current purchase.
  • In the call center: direct calls to specific agents using different scripts based on customer identification at the start of the call. Change offers as the conversation reveals new information.For instance, adjust up-sell and cross-sell offers if current purchases place the customer into a new segment.

“People complain about email,” Cano said. “But email is still very effective at reaching customers. But how do you get them to engage? If you say the same things over and over, they’re not going to open your emails. But when they see that you understand who they are, they’ll open that email and the one after that.”

Copyright © 2010 SAS Institute Inc., Cary, NC, USA. All Rights Reserved.

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