Retention and Relationships : Marketing Thoughts by Michael Greenberg

I’ve already received several requests for clarification on the customer grid from my Chief Marketer column.  Once you have chosen two criteria for segmenting customers, imagine a grid with each criterion on one axis.  Each combination of criterion values represents a segment to be investigated.

So if a hypothetical sporting goods store was set up where Criterion A is Private Label Credit Card Holder = {Y,N} and Criterion B is Activity Type = {Outdoorsman, Weekend Warrior, Family Sports}, there would be 6 boxes in the grid.  (Resemblance to a company where I once ran marketing is completely coincidence.  Besides, that company no longer exists.)  For each box, provide an objective and develop the strategy to accomplish each objective. 

For example, the Outdoorsman PLCC Holder has a lot of Open To Spend and lots of big ticket items in his typical wish list.  So the objective might be to generate big ticket purchases.  The loyalty strategy here might be to focus on long-term accrual, so that he can save up benefits to use on his one big purchase.  Or you might assume he has already made at least one big ticket purchase (a possible third criterion for your grid) and your objective is to maintain his spending level.  The loyalty strategy here might be to provide point acceleration on key consumables or accessories throughout the outdoor departments or provide increased accrual rates when a spending threshold is met.

My most recent column at Chief Marketer.

I’m finding more and more of our new clients and current prospects would benefit from additional insights into basic loyalty strategy, which prompted this most recent column.

As every serious marketer knows, the role of math, modeling, and statistics is only growing.  As I was recently perusing academic research and white papers on association rules, I was struck by how important my econometrics background has become.  I could follow the math and logic but I doubt more than 2% of all the marketing professionals I’ve worked with could also have done so.  As technology like on-demand CRM levels the application playing field, the winners and losers will increasingly be defined by strategy and tactics derived from superior insights.  Much like my earlier assertation that customer individuality will only increase, the importance of superior data-driven insight will only increase.

So if your children want to follow in your marketing footsteps, be sure they learn the statistics they will need to operate in the not-too-distant future of marketing.

My latest at Chief Marketer.

uTANGO has a business model built on a 30-year time horizon.  What if all companies took a longer view of their customer relationships?  Lifetime value would be more heavily influenced by retention, leading to changes in the allocation of marketing resources.  Plus acquisition spending would eventually come down, as revenue from existing customers begins to grow more quickly.

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.

OK, I have to admit I did not pick the title…my editor at Chief Marketer did.

But here’s my latest article.  My main point is that marketers should focus on improving their ability to deliver relevant products and messages to an increasing number of smaller customer segments.  Its based on individuality trends that are unlikely to reverse in the coming years.  Enjoy.

Its now time to find out how effective everyone’s relationship efforts were throughout the year. Confronted with a blizzard of offers, catalogs, ads, and products, consumer choice will come down to who can cut through the clutter.

The first test is Thanksgiving weekend, where companies are pouring email and direct mail into the hands of key customers (well, lets be serious, everyone is getting something).  I count inbounds from 46 different companies on personal accounts on Monday-Tuesday alone, plus direct mail inbounds from another 33 on the same days.  While deals still influence visitation if someone offers just the right item, nowadays the choice is heavily influenced by our relationship with the destination.  Its nice that some companies are reaching out to me now, but trying to relate to me once a year just has little impact on my decision.

The second, and more interesting, test is the email and direct mail they deliver in the 3rd and 4th weeks of December.  Who will try and relate to the gifts I bought last year, and point me towards similar categories?  Who see that I respond to coupons?  This is the fun part of holiday…I’ll come back to it in January and analyze.

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.

Every marketer wants to keep a finger on the pulse of their target market.  I’ve long followed job openings to study how marketing organizations change over time.

But SEM data is a direct pipeline into the minds of your target audience.  Watching how specific keywords grow or decline in importance around a particular topic is fertile ground for spotting changes in your business.  For example, I’ve seen a significant shift in the interest in “loyalty” in relation to “CRM” in the retail world.  So it appears that retailers have figured out that CRM is a technology, while loyalty is a strategy.

Something to keep and eye on and ask your analysts to look at every once in a while.