Developing and Retaining Customers
What we’re covering <ul><li>Defining the customer </li></ul><ul><li>Developing customers </li></ul><ul><li>Segmenting your...
Defining your customer
Who are we talking about? … . you know  about and have bought from you … .. you know about  and have  never   bought from ...
Customer Acquisition vs Customer Development
How does a customer define you? <ul><li>Customers buy from you because </li></ul><ul><ul><li>You provide a product or serv...
Defining ‘a customer’ <ul><li>‘ Customer’ is a very broad concept </li></ul><ul><li>Many ways to define a customer </li></...
Defining ‘a customer’ <ul><li>‘ How you define ‘customer’ in your business depends on a variety of factors </li></ul><ul><...
Developing customers
Developing customers <ul><li>You’ve just spent money on acquiring a customer </li></ul><ul><li>What do you do next? </li><...
Developing customers <ul><li>How do you ‘tempt’ customers to buy more? </li></ul><ul><li>How do you decide which customers...
Developing customers <ul><li>The big advantages of marketing to customers are: </li></ul><ul><ul><li>You know who they are...
Developing customers <ul><li>Who’s going to give the best return? </li></ul><ul><li>Most common modelling is RFM  </li></u...
Segmentation
Segmenting your customers
Segmenting your customers <ul><li>Which groups contribute most - and least </li></ul>
Segmenting your customers <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
Segmenting your customers <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
Understanding costs
Understand your costs Customer Mailing Affiliates PPC
Particularly in the ‘grey’ areas
Contact frequency
Contact Frequency
Contact frequency
Optimising performance
Optimising Customer Performance <ul><li>For the vast majority of your customer base basic analysis tools will work fine. <...
Optimising Customer Performance <ul><li>Monitor the structure of your database </li></ul><ul><li>If the numbers in the top...
Optimising customer performance <ul><li>RFM would lead you to focus on the top left hand </li></ul><ul><li>More sophistica...
Customer strategies
Customer strategies Contact methods <ul><li>Contact drives sales </li></ul><ul><ul><li>Variety of Contact Mechanisms </li>...
Customer strategies <ul><li>Different types of customer will be best served by differing strategies. For example: </li></u...
Customer strategies New customers (recent single buyers) <ul><li>Objective: Convert to Multi Buyer </li></ul><ul><ul><li>W...
Customer strategies  Existing customers (multibuyers) <ul><li>Objective: Convert to higher level multibuyer and maintain r...
Customer strategies  Best customers (recent 2+ multibuyers) <ul><li>Objective: Convert to yet higher level multibuyer and ...
Customer strategies  Fading customers (6 - 9 month buyers) <ul><li>Objective: Catch before they fade away </li></ul><ul><u...
Customer strategies  Lapsed customers (9 month + buyers)  <ul><li>Objective: last chance to get back as buyers before aban...
Data & Testing
Upcoming SlideShare
Loading in...5
×

4 Developing & Retaining Customers Profitable Multi Channel Marketing March 2010

1,255

Published on

Developing & Retaining Customers
So, you’ve acquired a customer (or at least someone who’s bought once). How do you go about converting them into a truly valuable ‘long term’ customer and how do you evaluate how much to spend on them and when to stop?

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,255
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
116
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

4 Developing & Retaining Customers Profitable Multi Channel Marketing March 2010

  1. 1. Developing and Retaining Customers
  2. 2. What we’re covering <ul><li>Defining the customer </li></ul><ul><li>Developing customers </li></ul><ul><li>Segmenting your customers </li></ul><ul><li>Understanding your costs </li></ul><ul><li>Contact frequency </li></ul><ul><li>Optimising performance </li></ul><ul><li>Contact strategies </li></ul><ul><li>Data and Testing </li></ul><ul><li>Summary </li></ul>
  3. 3. Defining your customer
  4. 4. Who are we talking about? … . you know about and have bought from you … .. you know about and have never bought from you … .. you know nothing about and have bought from you You know nothing about and have never bought from you
  5. 5. Customer Acquisition vs Customer Development
  6. 6. How does a customer define you? <ul><li>Customers buy from you because </li></ul><ul><ul><li>You provide a product or service they want at a point in time </li></ul></ul><ul><ul><li>At a price they consider realistic </li></ul></ul><ul><ul><li>With a service that they find acceptable </li></ul></ul><ul><ul><li>And because they trust you (or at least don’t distrust you) </li></ul></ul><ul><li>Generally they won’t buy from you any more if any one of these elements is no longer true </li></ul>
  7. 7. Defining ‘a customer’ <ul><li>‘ Customer’ is a very broad concept </li></ul><ul><li>Many ways to define a customer </li></ul><ul><ul><li>buyer </li></ul></ul><ul><ul><li>multibuyer </li></ul></ul><ul><ul><li>active </li></ul></ul><ul><ul><li>best </li></ul></ul><ul><ul><li>lapsed </li></ul></ul><ul><ul><li>new </li></ul></ul><ul><ul><li>profitable </li></ul></ul><ul><ul><li>………… .. </li></ul></ul>
  8. 8. Defining ‘a customer’ <ul><li>‘ How you define ‘customer’ in your business depends on a variety of factors </li></ul><ul><li>Such as: </li></ul><ul><ul><li>Cost of recruitment </li></ul></ul><ul><ul><li>AOV </li></ul></ul><ul><ul><li>Purchase frequency </li></ul></ul><ul><ul><li>Lifetime value </li></ul></ul><ul><ul><li>Contact cost </li></ul></ul><ul><li>Final analysis - its all down to profitability </li></ul>
  9. 9. Developing customers
  10. 10. Developing customers <ul><li>You’ve just spent money on acquiring a customer </li></ul><ul><li>What do you do next? </li></ul>
  11. 11. Developing customers <ul><li>How do you ‘tempt’ customers to buy more? </li></ul><ul><li>How do you decide which customers are most likely to buy? </li></ul><ul><li>How do you decide on the most appropriate temptation(s)? </li></ul><ul><li>How do you decide how much to spend and when? </li></ul>
  12. 12. Developing customers <ul><li>The big advantages of marketing to customers are: </li></ul><ul><ul><li>You know who they are </li></ul></ul><ul><ul><li>You know what they bought </li></ul></ul><ul><ul><li>You know may know what triggered the purchase </li></ul></ul><ul><ul><li>You certainly know how they bought it </li></ul></ul><ul><li>Developing customers is about using, and building on, this information to drive sales through a planned contact strategy </li></ul>
  13. 13. Developing customers <ul><li>Who’s going to give the best return? </li></ul><ul><li>Most common modelling is RFM </li></ul><ul><ul><li>Recency </li></ul></ul><ul><ul><li>Frequency </li></ul></ul><ul><ul><li>Monetary </li></ul></ul><ul><li>More complex modelling can refine this but get the basics right first. </li></ul>
  14. 14. Segmentation
  15. 15. Segmenting your customers
  16. 16. Segmenting your customers <ul><li>Which groups contribute most - and least </li></ul>
  17. 17. Segmenting your customers <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
  18. 18. Segmenting your customers <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
  19. 19. Understanding costs
  20. 20. Understand your costs Customer Mailing Affiliates PPC
  21. 21. Particularly in the ‘grey’ areas
  22. 22. Contact frequency
  23. 23. Contact Frequency
  24. 24. Contact frequency
  25. 25. Optimising performance
  26. 26. Optimising Customer Performance <ul><li>For the vast majority of your customer base basic analysis tools will work fine. </li></ul><ul><ul><li>RFM analysis </li></ul></ul><ul><ul><li>Source of initial order </li></ul></ul><ul><ul><li>Possibly initial product category </li></ul></ul><ul><li>This will identify both </li></ul><ul><ul><li>Your existing ‘best’ customers </li></ul></ul><ul><ul><li>Those customer types which provide the best ROI and thus the ones you want to target and encourage </li></ul></ul><ul><li>Once you’ve got this data and acted on it you could look at more sophisticated modelling – it will fine tune the boundaries but is unlikely to change the general approach </li></ul>
  27. 27. Optimising Customer Performance <ul><li>Monitor the structure of your database </li></ul><ul><li>If the numbers in the top left are rising you’re winning </li></ul>
  28. 28. Optimising customer performance <ul><li>RFM would lead you to focus on the top left hand </li></ul><ul><li>More sophisticated modelling, such as regression analysis, might find subgroups to rule in or out linked to other variables </li></ul><ul><li>But this is more likely to impact the yellow areas than any other </li></ul>
  29. 29. Customer strategies
  30. 30. Customer strategies Contact methods <ul><li>Contact drives sales </li></ul><ul><ul><li>Variety of Contact Mechanisms </li></ul></ul><ul><ul><ul><li>Mailed catalogues </li></ul></ul></ul><ul><ul><ul><li>Other mailings (leaflets / postcards) </li></ul></ul></ul><ul><ul><ul><li>Bounceback catalogues </li></ul></ul></ul><ul><ul><ul><li>E-mail </li></ul></ul></ul><ul><ul><ul><li>Outbound telephone </li></ul></ul></ul><ul><ul><ul><li>Text </li></ul></ul></ul><ul><ul><li>And these can be enhanced with </li></ul></ul><ul><ul><ul><li>Offers </li></ul></ul></ul><ul><ul><ul><li>Promotions </li></ul></ul></ul><ul><ul><ul><li>Personalisation </li></ul></ul></ul>
  31. 31. Customer strategies <ul><li>Different types of customer will be best served by differing strategies. For example: </li></ul><ul><ul><li>New customers (recent single buyers) </li></ul></ul><ul><ul><li>Existing customers (multibuyers) </li></ul></ul><ul><ul><li>Best customers (recent 2+ multibuyers) </li></ul></ul><ul><ul><li>Fading customers (6 - 9 month buyers) </li></ul></ul><ul><ul><li>Lapsed customers (9 month + buyers) </li></ul></ul>
  32. 32. Customer strategies New customers (recent single buyers) <ul><li>Objective: Convert to Multi Buyer </li></ul><ul><ul><li>Welcome e-mail as soon as order likely to be delivered featuring: </li></ul></ul><ul><ul><ul><li>Greeting to the business </li></ul></ul></ul><ul><ul><ul><li>Feedback form asking to comment on experience </li></ul></ul></ul><ul><ul><ul><li>Product ‘offer’ related to add on to first purchase </li></ul></ul></ul><ul><ul><li>Catalogue mailing within 4 weeks </li></ul></ul><ul><ul><li>High frequency contact strategy (most frequent mailing and e-mail strategy) </li></ul></ul>
  33. 33. Customer strategies Existing customers (multibuyers) <ul><li>Objective: Convert to higher level multibuyer and maintain recency value </li></ul><ul><ul><li>High frequency contact strategy by mail and e-mail </li></ul></ul><ul><ul><li>Introduce graduated promotions to contacts after first 1/3 of season </li></ul></ul>
  34. 34. Customer strategies Best customers (recent 2+ multibuyers) <ul><li>Objective: Convert to yet higher level multibuyer and maintain recency value </li></ul><ul><li>These are the most valuable customers AND the ones that like your product and service the most </li></ul><ul><li>The aim should be frequent contact but there should be less need to promote </li></ul><ul><ul><li>High frequency contact strategy by mail and e-mail </li></ul></ul><ul><ul><li>Tailor e-mail / personalised print communication to reflect ‘special’ status </li></ul></ul><ul><ul><li>Exclusive product offers </li></ul></ul><ul><ul><li>Delay promotion to last 1/3 of season and focus on exclusivity / first chance to get offers. </li></ul></ul>
  35. 35. Customer strategies Fading customers (6 - 9 month buyers) <ul><li>Objective: Catch before they fade away </li></ul><ul><ul><li>Lower frequency contact strategy </li></ul></ul><ul><ul><li>More use of e-mail </li></ul></ul><ul><ul><li>Stronger ‘come back’ promotions </li></ul></ul><ul><ul><li>Mail at start of season and with Sale catalogues </li></ul></ul>
  36. 36. Customer strategies Lapsed customers (9 month + buyers) <ul><li>Objective: last chance to get back as buyers before abandoning </li></ul><ul><ul><li>Low frequency contact strategy </li></ul></ul><ul><ul><li>Heavy use of promotions / offers </li></ul></ul><ul><ul><li>‘ Last chance’ call to action </li></ul></ul><ul><li>Assess seasonality (e.g. gift buyers at Christmas) and tailor contacts accordingly </li></ul>
  37. 37. Data & Testing
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×