Blueprint for Customer Loyalty


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Blueprint for Customer Loyalty

  1. 1. Contact: Dave Ury, dave@lifecyclemarketing.netCustomer Insight & Lifecycle MarketingConfidential and ProprietaryCustomer Insight & Lifecycle Marketing
  2. 2.  Overview 3 Customer Intelligence 7 StrategicAlignment 11 Lifecycle Marketing 14 Conclusion 20 Recommendations 21 Appendix 22Confidential and ProprietaryCustomer Insight & Lifecycle Marketing2
  3. 3. Confidential and ProprietaryCustomer Insight & Lifecycle Marketing3
  4. 4.  Digital subscriptions and memberships present an excitingopportunityto build lasting, profitable relationships withconsumers But the business model has inherent challenges: Fast changing, competitive environment Easy come, easy go nature of digital memberships Lack of communicationreach and frequency Thus, lower customer engagement, loyalty and lifetime value(LTV) are often a strategic problemConfidential and ProprietaryCustomer Insight & Lifecycle Marketing4
  5. 5. Alignment• ConflictingObjectives:e.g. customeracquisitionimpact on churn• Insight isgathered but notleveraged• Extraordinaryinvestments maybe neededMeasurement• Difficultybenchmarking ortesting• Limited access toproduct usagedata• Time lag betweenexecution andmeasurableresultsAssumptions• Service isaccessible andperforming well• Service has highmind-share orengagement• Low usage is justa featureawareness issueConfidential and ProprietaryCustomer Insight & Lifecycle Marketing5
  6. 6.  To maximize customer LTV, digital subscription businesses needa comprehensive loyalty strategy encompassing:1. Customer Intelligence = Behavior, Attitude, Demographics2. Strategic Alignment = Right Customer, Right Product3. Lifecycle Marketing = Execution of Customer Treatment Strategy The good news is that these essential components can bemanaged in parallel to some degree, and frequently there arequick wins to be foundConfidential and ProprietaryCustomer Insight & Lifecycle Marketing6
  7. 7. Confidential and ProprietaryCustomer Insight & Lifecycle Marketing7
  8. 8. Customer value should drive priority, while all metrics shouldinform product planning and customer treatment strategyMetric Description and ExamplesCustomerValueDefine what each customer is worth in terms of profits to thecompany. Commonly defined as LTV. Your customer base isyour most valuable asset, what is the asset worth?BehaviorBuying: Purchasing additional products, subscription renewalsProduct Use: Range and frequency of product feature andcontent useAdvocacy: Sharing/recommending to friendsAttitude/PerceptionCustomer Feedback. What features and attributes matter themost? Would they recommend to a friend? Why do they stopbuying?Performance Service delivery. Uptime, outages, etc.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing8
  9. 9. Attrition byCohorts Average Lifetime by Sales SourceConfidential and ProprietaryCustomer Insight & Lifecycle Marketing96 6.5 7 7.5 8 8.5 9ReferralsWebsiteEmailPaid SearchAffiliatesAverage Lifetime Duration(subscription in months)01020304050607080901001 2 3 4 5 6 7SubscriberAttrition byTenure (subscription in months)Jan Sign-upsFeb Sign-upsMarch Sign-ups
  10. 10. Interactions Profile UpdateConfidential and ProprietaryCustomer Insight & Lifecycle MarketingCommunication10- Website Visits- Membership Log-ins- Content Use- Purchases- Campaign Response- Customer Support- Record at Individual-Level- Enhance with PredictiveModeling, Segmentation,etc.- Event-Based Messages- Alerts- Offers- Recommendations- Customized UI
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  12. 12. Right CustomerUnderstand the profileand needs of happy,high-value customersRightMessageRelevant to high-value prospectsand customersRightProductMatch the needsof high-valuecustomersCustomer loyalty and theresulting profitablerelationships are all aboutdelivering a great fitConfidential and ProprietaryCustomer Insight & Lifecycle Marketing12
  13. 13. Executive Provide oversight and maintain program priorityMarketingProduct Management: Product matchesneeds of target customerCustomer Acquisition: Target consumers andchannels that return profitable customersCRM: Targeted treatment designed to engageusers, provide support, and reinforce sale(s)ITIntegrate richcustomer data withtools that supportanalysis andtargetedcommunicationStaff and align around a clear loyalty strategy because“everything affects churn”Confidential and ProprietaryCustomer Insight & Lifecycle Marketing13
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  15. 15. Confidential and ProprietaryCustomer Insight & Lifecycle Marketing15Management of the customer relationship should be needs-based,and oriented around lifecycle phasesOnboardingHabituate &ExpandRelationshipRe-engageor SaveCustomerEngagement& ProfitabilityCustomerTenure
  16. 16. Objectives: Deliver the product, maintain excitement, provideorientationConfidential and ProprietaryCustomer Insight & Lifecycle Marketing16Event Description and NotesPurchase Flow Simple, quick, and reinforce the saleOrder Confirmationand WelcomeSingle, comprehensive message confirming status andproviding recommendations on what to do nextProduct Delivery andAccessUser’s first engagement with product. Track“conversion” fromsale to first use, performanceperceptionsUser Guide, Tutorialsand SupportMake support easy to find. Show user how to get thebest value, even if UI is highly intuitiveFree Trial ConversionTimely and relevant upsell for free trial users. Test todetermine optimum timing, message, and medium
  17. 17. Objectives: Make product part of customer’s routine and expanduse. Facilitate loyalty, additional purchase and advocacyConfidential and ProprietaryCustomer Insight & Lifecycle Marketing17Event/Touch Point Description and NotesUpdates, News,AlertsMaximize awareness of new features, content or other“news”. Communicate with targeted, relevant messagebasedon explicit or implicit interestsTips andRecommendationsIncrease user’s perceivedvalue of the product byintroducing/promoting features they haven’t usedX-Sell, Up-SellOnce value has been established at initial service bundle,encourage user to expand the relationship with relevantofferEncourage andRewardAdvocacyMake it easy to share with friends, and motivate customersfor doing so with rewards, a better user experience, etc.
  18. 18. Objectives: Re-engage customer, problem resolution, billingoptimization. Manage voluntary and involuntary churnEvent/TouchPointDescription and NotesPaymentProcessingFor auto-renewals, billing optimization can be an easieropportunity because it’s often just back-end processes changesCustomerSupportCould apply at any point in lifecycle, although most contactsoccur when customer has an issue and is at-risk of cancellingProactiveOutreachInfrequent or dormant users are usually at-risk. Communicatehigh value features and relevant contentCancellationRequests“Save” customer by uncovering the issue and offeringa solution.Manage through self-help or customer care agentRenewal Notice Proactive reminder when customer must actively renewWin-Back Targetedrenewal offer to high-value, former customersConfidential and ProprietaryCustomer Insight & Lifecycle Marketing18
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  20. 20.  No gimmicks required to increase customer LTV, just somebasic principles: Targeted customer selection Product designed to fit the target customer Relevant, timely communication and treatment Product meets performance expectation Benchmark and track progress The customer relationship develops and loyalty/profitability isearned over timeConfidential and ProprietaryCustomer Insight & Lifecycle Marketing20
  21. 21.  Increase customer loyalty and LTV with a strategiccommitment and programmatic approach Next Steps:1. SOW - Deliver a specific, time-bound project description2. Audit - Complete a customerexperience and cross-functionalaudit to identify and prioritize opportunities3. Review - Review audit findings with management team toconfirm priorities4. Execution and Measurement - Yielding positive results andadditional learningConfidential and ProprietaryCustomer Insight & Lifecycle Marketing21
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  23. 23.  Situation: To better understand the drivers of early subscriber churnat RealNeworks, we examined account sign-in data. We discoveredthat many former customers had never signed-in to access theirsubscription during their entire tenure. Treatment Strategy: Proactively contacted these “orphaned”customers via email and offered help with account access. Execution: Designed a series of tests covering email subject lineand content, and landing page content. Also presented alternativecontent and treatment if customerhad installed software client ornot. All tests were compared against control cell which received notreatment. Results: Winning test combination increased first-time sign-in by46% and reduced 90 day attrition by 6% over control cell.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing23
  24. 24.  Situation: Using web surveys at TeleNav, we identified key productfeatures that were strong drivers of customer satisfaction, yet a largeshare of users were not aware of these features. Treatment Strategy: In addition to increasing visibility of thesefeatures throughout the customerlifecycle, we initiated a monthlyemail newsletterfocused on the satisfaction-drivers. Execution: Each edition of the newsletter focused on a singlefeature, highlighting use cases and benefits. To determine anychange in behavior, a series of four newsletters were sent to a testcell, while a control cell didn’t receive the recurring campaign. Results: After 4 months, the test cell receiving the monthlynewsletterhad 27% lower attrition than the control cell.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing24
  25. 25.  Situation: Significant churn at RealNeworks was caused bysubscribers credit cards failing to authorize and settle duringautomated billing . While the billing success rate was alreadyrelatively high, we determined that even small improvements couldyield meaningful revenue. Treatment Strategy: Focused on testing and optimizing back-endbilling processes. Execution: Tested and carefully measured any lift fromreconfiguring the timing and number of “recycling” attempts on failedcredit cards. Applied several other process changes identified withthe help of our payment processor, testing each in isolation. Results: Reduced monthly customerchurn by .5%, and yielded$600k/yr incremental lifetime revenue.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing25
  26. 26.  Situation: Based on primary research and customer supportfeedback at TeleNav, we identified issues with on-boarding, productfeature awareness and on-going support for small and mediumbusiness customers. Treatment Strategy: Created a more robust CRM program. Helpedcustomers get needed support and maximum value. Execution: Deployed a series of new treatments including websiteknowledge base, welcome email, new user activation guide, andtutorial videos. Initiated new order status reports to carrier partners,working with them to improve order processing success andexpedite timing from order placement to fulfillment. Results: Increased top-box customer satisfaction rating 32% yr/yrand reduced contact center call volume by 15%.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing26
  27. 27.  Situation: At RealNetworks, there were a broad set of factorsinfluencing customerchurn, as well as significant resource andorganizational hurdles affecting our ability to manage it. Treatment Strategy: Addressed customerchurn as strategicproblem. Execution: Built cross-functional team with performance goals tiedto customerloyalty. Segmented customers by behavioral andattitudinal data, creating a profile of our high-value target customer.Used same data to identify satisfaction drivers. Results: Delivered loyalty “blueprint” including full-year budget forcross-functional team. Gained support for key initiatives including:email platform, data warehouse, music recommendation engine,revised acquisition strategy, shift to agile development and improvedproduct performance, and range of relationship marketing programs.Confidential and ProprietaryCustomer Insight & Lifecycle Marketing27
  28. 28. Dave Ury is Marketing Director and Principal of Customer Insight & LifecycleMarketing. He is an accomplished leader offeringover 20 years of provensuccess in relationship marketing including acquisition, CRM, and retention.Dave has successfully led national marketing efforts and cross-functionalteams for large brands including Cox Communications, AT&T Broadband andRealNetworks. Clients include Cricket Wireless,Allrecipes, Smilebox andWhitePages. He earned his B.A. in Business Economics from the Universityof California, Santa Barbara, and his M.B.A. from the University of Colorado.Dave can be reached at, or 425-999-7548Confidential and ProprietaryCustomer Insight & Lifecycle Marketing28