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Accelerating Customer Experience “Marketing so insight-led that it feels like a service” Ajay Kelkar,Cequity Marketing trends! The big picture • Three technology trends are disrupting marketing • Media fragmentation • Addressability • Interactivity & Customer control Trend #3: Interactivity • Permits marketer to engage with audience in two way dialogues • Customer wants to manage her relationship with the brand! Brings in a huge amount of Customer data ! Marketing Imperatives! Every Marketer’s Imperatives! • Relevancy and readiness • Customer understanding • Customer experience and relationship • Be ready when the customer is ready • Master especially the internet & mobile channel Every Marketer’s Imperatives! Services Marketing Services Marketing • While a service experience is “fragmented” • You can hold a product in your hand • A “Service” tends to be a “sum of many parts” • For a Retailer-right from the entrance, the people, the ambience contribute to Brand experience “Sculpting a branding idea around packaged goods is much easier. The bottle of Coke can’t talk back. It never changes shape or color and if you don’t like how it is, it won’t ever argue with you.” “The retail store, the service provider, the Bank are all much more complicated. You can’t hold them in your hand. In fact, most times they can hold you in their hands. You walk in and around them, besides them...It is the experience which defines them.” The Services economy Creating a data deluge! The Data rich economy! • Almost 60% of GDP is from Services sector – Customer interaction with companies increase! • Growth of “Addressable media” – large customer databases in Banks, Retail &Telecom etc • Availability of rich transactional data – data leading to a “customer conversation” Almost 400 million customers and growing! 60% Data & 100 % Execution Gartner: Only 20% of enterprise will use more than 50% of the total data they collect to gain competitive advantage. Customer Experience-as differentiator Differentiate Customer Experience Source: Forrester Principle No 1: Obsess about “Needs” • Obsess about customer needs, not product features. – Rather than racing to bring new product features to market, companies need to refocus on the needs of their customers — who might even want fewer features Source: Forrester Principle No 2: Brand every interaction! • Reinforce brands with every interaction, not just communications. – Traditional brand messaging is losing its power to influence consumers — – that’s why branding efforts need to expand beyond marketing communications to help define how customers should be treated. Source: Forrester Principle No 3: Company mission • Treat customer experience as a competence, not a function. – Delivering great customer experiences isn’t something that a small group of people can do on their own . – everyone in the company needs to be fully engaged in it. Source: Forrester Customer Experience Maturity Source: Forrester Customer Marketing Why customer marketing • Availability of technology to understand customer behavior – Analytical and Marketing automation tools available – Analytical resources:large talent pool Marketing to a segment of one -now possible! Why customer marketing • IT environment maturing-customer data integrated in Datawarehouse • Data size multiplying rapidly-HDFC bank has over 5 terabytes of data One view of customer is now possible Key Business Ideas • Build a core competency in “Data led” marketing – Analytics will be “the heart” of business in the future • Move towards Web Analytics – Internet is a training ground for “customer pull” channels • Customer behavior changes –spot them as they happen… – Event based IT architecture – “Market so well that it feels like a service” Start small,use Excel! Move from data to insight to action and close the loop! Customer marketing simplified! • Keep it simple • Be more Relevant to the customer • Go one step at a time-Shoppers’ Stop started by collecting visiting cards • Don’t led technology overwhelm you-keep investments within limits Customer marketing simplified! • The most essential resources in any Customer marketing program are – a wealth of hypotheses about the customer! – and a variety of offers to test these hypotheses. Customer Loyalty Management Understanding What Must Be Managed "Marketers have developed an insane imbalance between obsessive customer acquisition and negligent customer retention" Why should we care about loyalty? The payoff of loyal customers % Increase in Customer Value Value of Increasing Retention by 5% 85 90 80 70 60 50 40 30 20 10 0 75 Credit Insurance Auto Service 25 30 35 40 Source: Reichheld, Harvard Business Review Sept/Oct ‘90 45 50 Software Building Mgmt Distribution Insurance Brokerage Credit Cards Retail Why Are Loyal Customers More Profitable? • No acquisition costs • Reduced servicing costs as they “learn” the company • They spend more • They recruit new customers • They are insulated against competitive switching • They are less price sensitive The Relationship Management Continuum • • • Like life, customer relationships follow patterns Recognize the phases of a customer’s relationship Respond with appropriate tactics Acquisition Introduction • Consumer introduced to the brand Courtship • Sustain awareness and interest • Incent trial Loyalty Management Honeymoon • Solidify relationship Daily Life • Grow relationship Lose Interest • Recognize it’s happening Try Again • Reemphasize what matters to them Part Company • Give up when it makes sense Source: WCJ Basic objectives for customer relationship Retain best, management most profitable VALUE customers Acquire high potential customers Make good customers better Reconnect with lapsed users Maintain brand vitality Key Principles of Loyalty Source: Adapted from WCJ Principle #1 “One Size Fits All” doesn’t work • O-S-F-A marketing strategies do not recognize differences among customers – – – – Needs/Wants Experiences Value Potential O-S-F-A Principle #2 Acquisition and Loyalty must serve one master: profit “Acquire with intent to keep” “Retain with intent to profit” Acquisition governs retention Retention governs profit Retain with Intent to Profit Hilton HHonors Lapsed Member Letter “Pay a $10 administrative fee if you are unable to stay…” Principle #3 Relevance is the key to loyalty marketing • Loyalty Marketing anticipates, plans for and acts on moments of natural transition, transaction and decision • Loyalty Marketing reduces the consumer’s decision-making complexity • Loyalty Marketing is information dependent Trigger-Based Communications Sears HomeCentral Service Contract “Your Craftsman lawnmower caused you a little problem in the past.” Trigger-Based Communications AAdvantage Dining Birthday Mailing Trigger-Based Communications Landscaper New Homeowner Letter Achieve relevance through customer listening • Take advantage of all contacts to learn about the customer Customer Surveys App/ Warranty Info Customer Knowledge Base Overlay Data Customer Service Customer Contact Staff Customer Listening Hertz #1 Club Gold Renewal Mailing Customer Listening OurHouse.com In-Package Survey Customer Listening Stamford Hospital Checkout Patient Survey Principle #4 Manage the Customer Experience • Monitor it – Especially when an intermediary is involved • Keep customers informed • Admit delivery failure/mistakes – Turn negatives into positives – Learn from mistakes Recognize delivery failure Virgin Atlantic Flight Delay Apology “I am very sorry to advise you that there will be a delay to your flight today.” “As a gesture of goodwill, I would like to offer you an additional 10,000 Freeway miles.” Improve product delivery American Express Merchant Coverage Insert “Are there any more places you’d like to use the Card? Tell us!” Keep customers informed MindSpring Merger Announcement Principle #5 Manage the empty spaces in relationships • Don’t provide an opening for competitors to intrude • Reinforce value delivered • Engage in (meaningful) dialogue Maintain a Dialogue Ford UK Owners’ Magazine Principle #6 Use loyalists as an incremental sales force • Actively managing word-of-mouth is a powerful Loyalty tool – Intuitive “targeting” – Greater credibility • Create a win/win by rewarding the customer Reward Customers for Referrals ebates.com Referral Commission Program Reward Customers for Referrals Amex Membership Rewards Member get Member Bonus Partnering enterprises to optimize marketing performance Our Mission To combine data, technology and build actionable analytical marketing services to accelerate ROI-driven, real-time customer-engaged marketing. www.cequitysolutions.com Thank You INDIA USA Offices MUMBAI OFFICE: 105-106, 1Worldwide FLOOR, CHICAGO OFFICE: 626, GROVE EVANTSON, ST STREET, ANAND ESTATE, 189-A, SANE GURUJI MARG, MAHALAXMI, MUMBAI – 400 011 PHONE: +91 22 43453824 F: +91 22 43453840 www.cequitysolutions.com IL 60201 [email protected] For the latest thinking in Analytics & insights on Customer management, check out our blog at http://blog.cequitysolutions.com/