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Leverage the Six Stages of Customer Loyalty: Attract Suspects and Convert Prospects

Article by on September 4, 2007 Editor's Pick No Comments

There’s an old saying, “Rome wasn’t built in a day,” and neither is customer loyalty. Customers become loyal to your company and its products and services one transaction at a time. In today’s digitized world of ever-expanding customer-touch tools, finding the right tool for the right loyalty-building job can get downright confusing. I find that it helps to think in terms of loyalty stages, as people evolve into your best customers. They are: suspect, prospect, first-time customer, repeat customer, client and advocate.

In this three-part series, I’ll give you a quick tour of these stages and the various tools and techniques a cross-section of firms are using to leverage them. In this first part, I look at the earliest stages—attracting suspects and converting prospects—before a person has even made a purchase.

Loyalty Stage 1: Attracting suspects

In today’s “connected” world, ideas drive buzz when they are:

  1. Simple
  2. Word-of-mouth friendly
  3. Supported by tools to facilitate customer conversation

This three-step success formula worked exceptionally well for Blendtec, a small, Utah-based maker of high-end home and commercial blenders. The fledging company needed more business, so executives brainstormed: How do we earn more market awareness on a shoe-string budget? Their answer? Online videos with a simple, word-of-mouth friendly premise: CEO Tom Dickson, dressed in white lab coat and goggles, blending up a host of everyday objects (baseballs, a Tiki Torch, Transformers, an iPod, a video camera) in a light-hearted, don’t-try-this-at home presentation schtick.

By Week 3, the company had dropped all other search engines from its budget.

How did Blendtec facilitate online awareness and conversation? By posting the video on YouTube! Within a week, the Will It Blend? videos became a YouTube hit. Uploads followed on such other sites as Revver.com and Digg.com. At the end of the first seven days, the Will It Blend? video campaign had six million views. But that’s not all. Other product makers, anxious to leverage the campaign’s popularity, began paying Blendtec on average $5,000 to film promotions for their firms using the Will It Blend? format. Bottom line, the videos became a revenue producer in their own right. Awareness went way up, along with sales. Blendtec reported a 43 percent sales increase for 2006.

Loyalty Stage 2: Converting Prospects

Search engines are a great source for prospecting. But, to weed out high-potential prospects from mediocre suspects, it is vital that a firm’s online search campaign be as “spot on” as possible in three areas:

  1. Whom to target
  2. How to position your products and services
  3. How to effectively qualify prospects.

The right way. One company that did it the right way is Citrix Systems, a U.S.-based infrastructure software maker, which, in an effort to generate better sales leads, in early 2006 began using real-time, post-click analyses (conducted by Ion Interactive) to maximize paid search campaign conversion. The campaign was designed to attract buyers to Citrix’s new HIPPA-friendly (Health Insurance Portability Act) software product.

The campaign’s purpose was to generate high-quality leads that Citrix Systems sales agents could follow up on. Based on post-click marketing segmentation analysis, Citrix immediately learned that more than 70 percent of search engine respondents were not in the target audience of hospital decision-makers. But even with only 30 percent of the respondents in the target audience, conversion rates still soared 525 percent, based largely on the new campaign’s use of directed click paths and audience-specific messaging.

Within 10 days of launch, Citrix used RTP analyses (which looks at respondents, traffic sources and paths) to confirm Google as the best-performing search engine. By Week 3, the company had dropped all other search engines from its budget. The sales lead campaign launched with two test paths. Immediate real-time analysis revealed that Path A was performing significantly better than Path B. Based on real-time data, Citrix Systems crafted and launched Path C, with nearly double the results of the already- successful A path. This segmented traffic converted at a sales lead rate of 12 percent—or almost 2,500 percent better than the previous campaign, launched in 2005. All in all, the campaign recalibration was impressively achieved within the first three weeks of campaign launch.

Too much too soon. Like Citrix Systems, 247 Workplace, a Los Gatos, California, maker of office furniture, wanted to generate better sales leads. And also like Citrix, the furniture maker looked to the web to help the generation/qualification process. The 247 strategy was to make virtual salesmanship more proactive. Rather than wait for the web visitor to click on a “help” button, 247 Workplace went one step further. When the visitor logged on the web site and looked around for several minutes or clicked seven or eight pages deep into content, a service agent detected the presence and solicited a real-time dialogue through an Instant Messenger-like prompt that read, “May I help you?”

A year into this more proactive stance, the company dropped it. While some web visitors liked the prompt attention, others found it intrusive and in direct conflict with the anonymity of web browsing. So the company listened to customer feedback and wisely dropped the feature, opting, instead, for customers to make the first move at chat engagement. The lesson here is just because you can doesn’t mean you should in today’s connected marketplace. On the web, as in person, it’s important not to be perceived as too pushy. Both online and off, prospect conversion is a delicate dance that requires a “lead and follow” balance on both sides of the sales transaction.

In Part 2, I’ll look at the middle stages, the first-time customer and the repeat customer.

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