Keys to Consistently Cultivate High-Value Customer Relationships

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Thanks to investments in process, data capabilities, advanced analytics and new generation channel technologies, digital touchpoints are becoming more integrated and ubiquitous than ever before. Brands have never had more opportunities to engage with consumers in a meaningful, relevant, timely and targeted way.

Cultivating relationships with high-value customers requires precision in analytics-driven targeting, personalization and strategic pricing. High lifetime value (LTV) customers are typically profitable because they pursue value in a relationship with the brand vs. price promotions. Customers want more than discounts. They want brand value. They want personalized experiences that communicate accessibility, affordability and impact. Even if they are not “relationship-seekers” from a segment viewpoint, they still require communications that are timely, relevant, proactive and personalized or it is just a matter of time until they defect.

The good news is that companies can access the data, technology, and insights to discern consumption patterns, replicate them, and incite behavior change.

By harnessing the power of precise data and advanced technology, a shift in customer behavior towards loyalty-centric habits that yield long-term business benefits is now attainable. The key to unlocking these opportunities hinges on brands prioritizing a unified, cross-channel customer engagement strategy.

In other words, brands can consistently cultivate high-value relationships. Here’s how.

#1 Start With High-Value Actions

Effective customer engagement approaches are rooted in pinpointing the high-value activities (HVAs) that accelerate the consumer’s evolution to high LTV. HVAs are the fundamental consumer actions directly linked to favorable business outcomes. For most businesses, gently steering customers towards executing a handful of HVAs while interacting with your brand can lead to an exponentially positive influence. In practice, the data science team must continuously identify the 20% of the HVAs that provide 80% of the value.

Once customers complete a high-value action, they are significantly more likely to generate brand value than less connected consumers.

While these HVAs will differ by market, sector, and brand, companies should identify several use cases where data-producing customer engagement will most significantly impact bottom-line results and cultivate connections that facilitate making companies more sustainable.

Take, for example, retail outlets and fast-food chains. A customer who opts to purchase online and then collect it from the store is completing an HVA because they have a higher lifetime value and a greater average order worth.

Similarly, an HVA might be as simple as adding items to a wish list in media and entertainment. Customers with even one thing on their wish list are 70 percent more likely to return in the subsequent month than those without.

Understanding which actions generate the most benefit for your brand will assist you in fostering the proper habits among your customer base.

#2 Find Relevant Moments

After pinpointing the high-value actions that fuel the success of your brand, try to comprehend how these behaviors provide value to your customers. When and under what circumstances is it beneficial for individuals to act this way?

The deeper your understanding of your customers in these specific situations, the more powerful and personal your customer engagement strategy will be.

Artificial intelligence (AI) and predictive analysis models can help identify these relevant moments. AI-powered customer engagement allows brands to respond to a broad spectrum of micro-moments, meaningful instances for smaller demographic sections identified with more accurate prompts. Today, a handful of brand leaders across the globe are pushing the frontier of innovation on combining AI targeting capabilities with AI-generated content, a powerful “one-two” punch.

Ultimately, this combination of targeting rules and content enables brands to be more timely and personalized. This requires more than providing customers with a good deal or a hot bargain.

Brands possess the ability to simplify life or inject a sense of exhilaration, offering the appropriate emotional gratification in light of the current events in individuals’ lives when they interact with them.

This approach is more efficient and effective than traditional marketing approaches, positioning brands to optimize their long-term financial outlook with every interaction.

#3 Experiment with New Approaches

Customer engagement serves as a mechanism for data collection and an avenue for implementing insights. Since data is the lifeblood of modern marketing and customer engagement, brands should continually experiment with new engagement strategies to determine best practices that genuinely resonate with their customers.

This process is more accessible than ever before. A/B testing has become remarkably straightforward and easy to implement, making it practical for brands to conduct creative trials.

For instance, Car Next Door, an Australian ride-sharing company, was eager to determine how to encourage their drivers to develop comprehensive profiles and enhance the attractiveness of their listings to customers. Through experimentation with the onboarding process and incentives like badge earning, the firm doubled the conversion rate from listed cars to completed profiles.

At the same time, companies should experiment with engagement practices that break through the noise. Many consumers are inundated with conventional engagement incentives that often induce apathy rather than inspire excitement.

By experimenting with new approaches to customer engagement, brands help ensure they continue to evolve as their customers’ preferences change and adapt.

Converting Quantity to Quality

Brands have never had more opportunities to engage with and foster high-value customer relationships.

That alone doesn’t guarantee success.

The key to effectively utilizing these opportunities lies not in simply increasing the number of customer interactions but in optimizing their quality. This means focusing on high-value actions, identifying relevant moments for engagement, and constantly experimenting with novel strategies. In doing so, brands can consistently cultivate high-value customer relationships that last.

Dennis DeGregor
Dennis DeGregor serves as VP, Global Experience Data Practice, Ogilvy/Verticurl. Dennis is the lead data strategy advisor for Fortune 500 brands globally on enterprise CX transformation, analytics, and leveraging technology for competitive business advantage. He has written numerous books on the subject of enterprise data, strategic AI, and leveraging the global Internet for competitive advantage through data-driven CX transformation.

1 COMMENT

  1. This article is very insightful and informative. I agree that brands need to focus on high-value actions and relevant moments to cultivate long-term customer relationships. I especially liked the examples of how different industries can identify and leverage HVAs to increase customer loyalty and retention. I think predictive analytics are powerful tools to help brands deliver personalized and timely experiences across channels. Thank you for sharing your expertise and insights on this topic.

    Regards,

    Michael Wichkoski

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