How does your DM, CRM
or CLV strategy look like?
What is the analysis of your common situation?
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Are You satisfied with the flow of new customers?
Are the customers you are recruiting profitable?
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Is the retention rate correct?
Are the “right” customers leaving you ( = non-profitable)?
Can you identify and activate passive customers or
customers you are about to lose?
Cultivating
customers
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Are your customers buying everything they can from you?
Are you satisfied with additional sales or cross-sales?
Regaining
customers
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Do you fully understand why your customers leave you?
Are your customers coming back?
Gaining
customers
Keeping
customers
What has experience taught us of the
value of our customers?
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In most of enterprises, despite the line of business, the
average share of customers is rarely more than 30 %!
To gain an extra euro from an existing customer is 5-10 times
cheaper than from a prospect!
There is a direct link between high market share and the
profitability of a company.
Why working with data of customers?
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“Everybody” knows that it is 5-10 times more expensive to gain a new
customer than to keep
the existing.
“Everybody” knows that you can develop your existing customership
with additional sales and cross-selling (= improve your market share).
We need to know the value of our customers to be able in the best
manner to divide the existing resources to gain maximum profitability
We need in a “positive way” to discriminate our customers and
prospects to gain, keep, cultivate and regain the most potential ones.
The database gives credible facts of the outcome of different marketing
investments.
The way of looking at marketing has changed
DA
direct advertisement
DM
database marketing
customer relationship management
1960-70
1980-90
2000 >
Respons
The rate of answers / %
ROI
Net Sales/the costs of
activity per
activity
ROMI and CLV
(customer lifetime value)
The growth of the portfolio of
customers
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Focus on products
Focus on sales
Focus on channel
Short-term
Mass
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Focus on products
Focus on sales
Focus on channel
Short-term
One-to-one
CRM
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Focus on customer
Focus on sales
Focus on profitability
Long term
One-to one
What are the limitations and possibilities of the
different aspects?
DA
direct advertisement
DM
database marketing
CRM
customer relationship management
1960-70
1980-90
2000 >
Respons
The rate of answers / %
ROI
Net Sales/the costs of
activity per
activity
ROMI and CLV
(customer lifetime value)
The growth of the portfolio of
customers
REGISTERS of names
and addresses to
customers + prospects.
REGISTERS of names
and addresses to
customers + prospects
AND customer behavior
with identification of a
card (or similar)
REGISTERS of names and
addresses to customers +
prospects AND customer
behavior with identification
of a card (or similar) AND
flow of customers and the
reasons to it.
How we increase the lifetime income
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We ensure that the customer buys more frequently
We ensure that the customer buys for more at any occasion
We ensure that the customers stay as customers for longer period
(The Annual Income per Customer = Customer frequency x the average
purchase
The Lifetime Income = The Annual Income per Customer x duration)
Customer Lifetime Cycle
Understand the reasons
of termination of
relationship by
behaving politely and
by asking if we can
keep them informed of
what is going on.
Ensure the Customers choice
by collecting customer data,
ensure re-sales, place the
customer in the accurate
segment of value.
Active win-back
Regain
New
Finish
Keep
Keep the customer by
showing them the
additional value of the
relationship
Save
Cultivate
Getting
”bored”
Proactive regenerating
of the relationship with
profitable customers
Start to build the
Customer Relationship
by rewarding and
engaging, give hints
and inspiration.
Additional Sales and
cross-sales by giving
the customer
possibilities of
purchasing more
products and services.
The new Marketing Plan for more accurate
communication with customers
Type of Activity
Process driven
Season driven
Product driven
Goal
Gain
Keep
Retention %
Cultivate
Growth of
frequency
Value of individual
Regain %
purchase Regain
Changing the behavior from Focus on Products
to Focus on Clients means:
The collecting of Customer Data is a primary
issue!! The whole organization must focus on
collecting and up-dating information of
prospects, existing customers and lost
customers.
Use the Customer Data to enable better
decision making (communication, price
setting, range of products, organization etc.).
Database
Opinion
Organisation
Creative
communication
Give the organization all the reports and
analysis needed for a profitable cultivating of
your customers.
Accurate information gives you
opportunity to communicate more
efficient with Flow of Customers and
Behavior-related issues > increases your
CLV. Gives you opportunity to work on
right prospects to become customers.
Information of Customers
Database
Database
Opinion
Organisation
Creative
communication
What sort of knowledge do we have of our
customers in our database and how do
we update the information always to
have a correct insight of a customer?
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contact information
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demography
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sosiodemography
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customer history
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response history
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areas of interest/preferences
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plans for future
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permission marketing
Opinion of customers
How do we work more systematically and
structurally with our customer
information to be all the time able to
learn more to make better decisions?
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customer analysis
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flow of customers
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the customer CLV
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migration of customers
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share of customers and potential to
grow
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scoring analyses
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segmentation and customer profile
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customer profitability
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sales and marketing processes
Database
Opinion
Organisation
Creative
communication
Opinion
Creative communication
How do we use our opinion to produce
creative communication which gives the
effectiveness desired and affects the
customers as desired?
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directed information based on
information
about the customer/prospect
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always many possibilities to respond and
must be measurable
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link together product, calendar and
behaviorbased communication
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take care of your brand in directed
communication
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be ready to use rewards to strengthen the
effect/put it in your budget from the
beginning
Database
Opinion
Organisation
Creative
communication
Creative
communication
Organization based and focused on Customers.
Database
Opinion
Organisation
Creative
communication
Organisation
How do we support the organization to be
more effective on successful
development of customers?
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the leaderships understanding and
commitment to develop the work for the
customers
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a responsible person for the CRM, who is
forming the strategy and is in charge for
operations
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new key figures for measuring
development
of customers and loyalty.
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a registered policy always to test new
solutions, despite the cost per unit.
The corner stones for successful DM and
the different issues importance in the
effectiveness of direct marketing?
The choosing of desired target group
The offer
Timing
Design, text and structure
c. 40 %
c. 30 %
c. 15 %
c. 15 %
to be noticed: every part of a campaign must be done 100 %.
Step one:
The Target Group,
whom should I contact?
How do you find your target groups for your seasonal or product activities?
Use the classic “RFM-method”
R = Recency (has recently been doing business with you).
F = Frequency (has been several times in contact with you or purchased)
M = Monitary (has purchased for a remarkable amount).
Step two :
What shall I offer?
The offer must include one or many of the advantages mentioned:
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earn or save money
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save time
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convenience
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improving your health
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keep your position
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gain respect
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hang along
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missing critic
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security for your family
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purchase smartly
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avoid physical pain
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fulfilling your desires
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keeping up a good reputation
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having beautiful things
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be able to attract the opposite sex
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becoming respected as an individual
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enjoying life
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succeeding better than “your neighbor”
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to avoid problems
Step three A:
When do I have to act?
New customers
Active Customers + top 20 %
Wish them welcome + average 20-70 %
give them chance + bottom 30 %
Passive Customers
Lost
customer
Wish them welcome /
get new purchase
React
Regain
Have purchased during
last 8 month.
Have not purchased during
last 8 month
Have not purchased during
last 12 month.
Step tree B:
When do i have to act?
Season related:
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e.g. weather
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Christmas
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birthday
Individually related:
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age
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sex
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living place
Product related:
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news
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extra services
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out-let
Step four:
How should I present the offering:
The Key components in a Sales letter
The Envelope
Brochure
The Responding card
The Sales letter
Envelope:
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Name and address without any tricks. Though, BIGNAME, is well used.
It must always be tested, whether information on envelope OR blank works!
Differ yourself from all the other mailings.
Take into the production ALWAYS something which wakes up the interest.
There is two sides on the envelope.
Sales letter:
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You just glance at the entire letter, then one reads what is most interesting.
You have only a few a seconds to awaken some ones interest.
It is always from one person to one person.
The “Johnson box” tells the advantage in few words.
Short words, short sentences, headlining (in between).
Extra advantage, active P.S.
Answers people awaits:
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What are you doing for me, if I approve Your offer?
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How do you do it?
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Who is in charge for the promises you given?
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For whom else have you given this?
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What will it cost me?
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How can I be in contact with you?
The Respond card
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Ad in the receivers data > make it easy to buy.
Give the receiver a limited time “window” to act.
Always repeat the offering, the card must function as a “stand alone”.
The Brochure
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Gives a wider picture of the product/service itself.
Gives possibilities to present satisfied users/buyers.
Gives a “certification” that the sender has a large range of solutions.
Gives opportunity to additional sales.
Give opportunity to cross-sales.
Can be used for big or many pictures.
Gives opportunity to build up the brand.
Stays with the customer after the return card is sent away.
Some conclusions
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build up a customer “club” (= database). Start now, techniques are irrelevant.
try your way out: test, learn, make mistakes, adjust, return.
be proactive.
use a lot of time to strengthen the loyalty among the most profitable customers.
develop different offers to promote additional or cross-sales.
find interests of value to ensure, that you feel bad to leave the community. listen to your
customer and do investigate how satisfied they really are with your solutions > act
according to this information.
develop proactively your offers in the perspective in which living situation your customer is.
send out systematically offers in a tempting manor.
test, test and test.