Retention and Relationships : Marketing Thoughts by Michael Greenberg

Last month’s column for Chief Marketer.  I’d planned on covering the first three elements in more detail before publishing this article, but we’ve been very busy at the office for the last couple of months.

This column touches on the power of recognition, the value of real interaction, the retaining power of collaboration (and the low cost content it can provide), and includes a push to enable advocacy by your customers.

[Things are quite busy on the work front…but I will get back on schedule starting with this post.]

Direct communication, possible once a customer is identified, unlocks a whole new level of interaction, where marketers can differentiate the message.  The various options now available enable a much more nuanced relationship with your customers.  Looking at these options is instructive in understanding the value that this element can add to your overall best customer management.

Triggered email is the high ROI workhorse of differentiated communications.  Expectations for email relevance will only continue to grow, so marketers need to continuously increase their capability to develop and deliver messages that reflect actions, attributes, and environmental factors.

Custom printed or variable printed direct mail is a personalized variation on traditional direct mail.  Ideally the same factors that make triggered email relevant are incorporated into direct mail content, either through differentiated messaging and creative, or “statement”-type data for a formal program.  In reality direct mail can and should eventually have the same level of flexibility as email.  Good marketers will incorporate this capability into their arsenal for one good reason - it works.

Targeted promotions are an evolved version of coupons, with the qualification and award tuned to the individual recipient.  While most marketers can only provide relevance through the targeting (that is, identify segments and craft promotions for each), we’re not far from algorithmically generated promotions taking over.

Site personalization is the one area that should be far more prevalent than it is.  Variable site content has been around for a long time, yet only a few companies capitalize on the increases in conversion and repeat visitation that can result.  If everything is going right, the site is reflecting the activity going on elsewhere, such as the targeted promotions above, with landing pages for the individualized triggered email.

There are other types of direct communication that are still emerging.  Widgets, small client-side apps that can be added to websites directly or via some basic integration, are quickly gaining traction and critical mass.  While many are just distributed links to a site home page, more interesting technologies are available when a company opens up their APIs, with Facebook as the current shining example.

My latest at Chief Marketer.  Its the third in the series on developing a loyalty strategy proposal.  The three taken together provide a framework for addressing all of the key questions regarding a loyalty (or relationship marketing) program.

At its core, ROI isn’t that tough to figure out, but the secret sauce is estimating the impact on transaction size, frequency, and retention.  There’s nowhere you can find those numbers online, since every company has a unique mix of factors that influence the values.  Experienced practitioners can do that estimation for you.  If they don’t ask you what your plans are for employee training as part of the program, then be skeptical about what they tell you…

My latest at Chief Marketer.  Part two of a three column series that walks through a basic approach to loyalty program strategy.  This one looks at the different program structure options and discusses how they are applied based on the segment-specific strategies developed in the first column.

My latest article at Chief Marketer.

The gist of it is a series of non-obvious benefits to loyalty marketing:

Loyalty programs can be very cost-effective, especially after breakage.

Loyalty programs get you more e-mail addresses of buyers.

Points programs let you promote without actually lowering prices.

Loyalty programs build lock-in, especially important for easily substituted businesses.

Loyalty programs improve the customer tracking rate.

Loyalty programs make it easier to reward nonpurchasing—but valued–behavior.

Loyalty programs let you give status to your best customers.

Loyalty programs greatly increase the likelihood of a message being read.

Surprise and delights appeal on a very deep level.

Loyalty programs tend to attract those who are most likely to respond to them.

The details of each of these points are discussed at Chief Marketer.  Enjoy.

My latest article for Chief Marketer is one that influences everything we do at Loyalty Lab.  The idea of reserving substantal resources for hidden programs is key to long term success in relationship programs, especially for companies where a small number of customers account for a substantial portion of revenue and profits.

My latest Chief Marketer article.  Best Buy’s decision to revamp their program, including dropping the annual fee, is a good example of how companies should approach loyalty programs.  Keeping program benefits current, by dropping elements that hinder or do not help the program and adding new ideas, helps keep programs relevant to active and high potential customers.

I’ve noticed that many companies still try to figure out the exact best way to do something in advance.  In some cases there is no other option, but nowadays its much easier to adapt to customer response or market conditions.  Better yet, test multiple ideas simultaneously, and let the market pick the winner.

That’s the premise behind my latest article for Chief Marketer, which I encourage you to read.