Reactivate (repeat win)
If you find
that a customer on your file no longer does business
with you, maybe you should try to reactivate them. The
ability to try to reactivate/win back lapsed customers
assumes that you have systems that actually monitor
customer’s activity or inactivity. The whole idea of
investing in customer knowledge indicators is to create
a base of trusted information on which you to make decisions.
Reactivation can only be achieved if you have the relevant
measures and customer understanding on hand. Think of
lapsed customers as those that you could win back if
you have the right value proposition and their attitude
to you is not negative.
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Retention (keep)
Customer
retention is one of the best ways of ensuring the survival
of an organisation. However, hand in hand with the recognition
of the need for customer retention is the need for customer
analytics. What does the customer value about the way
you treat them or supply a service? What value for money
do they receive? A customer knowledge indicator must
be built to identify the customers you actually have,
the customers you want to retain and what they actually
value. If the 80/20 (or 70/30) rule applies, then retaining
the wrong customers will help destroy a company’s profit
very quickly.
If retention
is important and identifying the right customers is
one of the most important things a company can do, why
is it that not all companies are doing this? Well without
customer knowledge it may be almost impossible to identify
your customers in any unique fashion let alone calculate
some metric regarding their short or long-term value.
This may be one of the reasons companies have been pouring
money into call centres as a means of servicing their
customers and "doing CRM" rather than the really tough
alternative of actually addressing the real need for
a corporate CRM policy and customer knowledge.
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Cross-Sell (develop)
The desire
to sell more products/services to existing customers
has been an extremely successful way for many to grow
their business. Over the last few years, many mergers
and acquisitions have been founded on the concept of
cross-sell. However, merely saying you will cross-sell
does not make it happen. Successful cross-selling is
based on extensive customer knowledge and many organisations
have found significant cost savings in their use of
customer data. They have reduced their cost of sale
and also their cost of customer acquisition.
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Up-Sell (develop)
The idea
is to help your existing customers perceive the worth
(sell) of a higher value product/service than the one
they currently have. Very simply you move someone from
one product to another of higher value. By moving your
customers up through your range of services (and products)
with different margins and bundles can benefit both
parties. Over the lifetime of a customer, they may move
from one income band to another and their needs, desires
and ability to pay will change. The fact you can predict
behaviour through the use of customer data, the knowledge
that can be extracted from this with the right tools,
and human interaction is a means of improving the bottom
line. To be successful requires the organisation to
focus on customer behaviours and life-cycle patterns.
Most successful up-sell models are based on providing
real value to the customers and also form part of any
organisation’s retention strategy.
Migration
is an extension to
Up-Sell.
Migration strategies should be considered where you
wish to promote a new version of a product your customer
previously purchased. Life-cycle also comes into
play and can be used to determine the best timing to
suggest an offer to migrate to a replacement model,
take a software upgrade, switch to a replacement service
package, etc.
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Acquisition (win)
In many
respects, acquisition has always been the way companies
built their business. Without acquiring customers, you
don’t have any to retain. The many voices that talk
about acquisition in the past tense seem to have forgotten
the basis of all business - you need to acquire the
right new customers and retain the right existing customers.
In some industries where there are few suppliers, you
may already have some kind of relationship with 99 percent
of the market, but there are always other markets and
other niches for the creative.
Acquiring
the right customers for those that have customer knowledge
indicators is a task of identification. By identifying
the profile of your most valuable customers and those
with the greatest future value potential, you can recruit
more that share their profile. If you don’t have customer
knowledge indicators and functioning CRM philosophy,
it is more hit and miss. Market research helps but is
not sufficient. Organisations that have invested in
a customer knowledge targeting system have a built-in
advantage and unique differentiator over their competitors
- the information they have collected, collated and
mined on their existing customers!
Remember
that there are number of alternative channels for the
potential customer to buy your goods, and some may involve
the choice to interact with a real human being. To attract
the right customers; use the information you have. Often
as not, what a customer did yesterday, he is likely
to do today - so find more that will act like him.
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Experience (reason)
Any and
all customer experiences can and do create both positive
and negative feelings. We live for experiences that
are positive and try to avoid the negative. Our experience
of a service or a product is intrinsically bound up
with how we value the relationship, the transaction
and our perceptions of the company we are interacting
with. If perception is reality then the customer experience
leads one to comment, "I will see it when I believe
it." The customer experience is all. If a customer has
a bad experience, they might give you a little more
rope, but the experience is remembered. For example,
when something good happens you tell three or four people
and when something bad happens you tell 12 or more.
The customer
experience must be something the organisation invests
in - both at senior management level and throughout
the organisation. In some instances one bad experience
is enough to drive a customer away. Modelling your good
customers then treating them badly is a recipe for disaster.
Top
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