Focus -Do you know your customer. Customer intimacy implies that you really know your customers and
are able to anticipate their needs.
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Target -Getting to know your customers. Flex your database to deliver targeted promotions and, as a result,
gain invaluable marketing insights.
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Communicate -The value of deepening existing relationships. The cost of acquiring a new customer is often two to three times the
cost of enhancing an existing relationship with a satisfied customer. |
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Getting to know your customers
IT'S A SIMPLE FACT: Great direct marketing and relationship programs don't happen by accident. They're the products of insights that target relevant messages to the most receptive customers or prospects.
Unfortunately, while companies spend countless hours creating and executing complicated marketing plans, very few devote the same amount of time and energy to understanding their customers. A company can do this by taking an inventory of its customers, profiling them, building tactical tools and looking at their lifetime value.
At iGoDirect one of our first tasks is to improve your customer data quality before turning to sophisticated customer segmentation and profiling.
Getting to know your customers is the ability to satisfy your customers' needs, often even before they are aware of them. Customer insight implies that you really know your customers and are able to anticipate their needs.
To know your customers, you must be able to identify those factors that motivate each one to purchase your products. Although demographics can provide a profile of facts that describes each customer, psychographics provide insights into what the customer values.
Getting to know your customers will deepen your existing relations.
The cost of acquiring a new customer is often two to three times the cost of enhancing an existing relationship with a satisfied customer.
While the ultimate goal is to have all relevant and valuable customer information in a single place, it is advisable to build it in a scalable, incremental fashion. That way, you can start with something fairly small which will be low cost and quick to deploy. Once proven, you can then iteratively and incrementally build on it.
Important stages towards customer insight
What level should you be targeting first, and what are the subsequent levels?
iGoDirect created the Customer Intimacy Model which covers the four different stages of customer insight to customer intimacy.
Stage 1: Customer Identification
Before we can really start to understand your customers, we must first know: who they are and what they're buying.
A mail order catalogue company where we recently consulted could only generate their customer list by accessing their accounts receivable application, printing all the invoices they had sent out and then removing the duplicates.
Another organisation (a large car manufacturer) had one list of customers in their warranties database had another list in their sales database. About 10 percent of the names in each database did not appear in the other database. Which database was right? Who were their actual customers?
The unconsolidated and inconsistent data made it impossible for them to really answer the question.
Stage 2: Customer Differentiation/Segmentation
Once we know who your customers are, we're ready to stop treating all customers in the same fashion. The first step is to start differentiating between your customers via customer segmentation.
To successfully achieve this we must identify those characteristics that can help us pinpoint how to best segment your customers.
Although segmentation is certainly a step in the right direction, it's even better to treat customers as individuals rather than as part of a group.
Therefore we need to put even more detailed information about your customers in the equation. You want to capture every interaction; and this involves not only information from your marketing, sales and customer service applications but also integration with information from your back-office .
All of this information is useful in understanding your customers and enhancing their loyalty to you.
Stage 3: Target Marketing
Achieving good customer insight is the first step to success in relationship marketing, but it is only the beginning.
With customer insights or a single view of customers, you can segment your customer base and start to deliver precisely targeted, intelligent, tailored and personalised communications.
The goal is to use this data to aim different campaigns at different groups with particular interests.
For example, going beyond general demographic information, and including transaction data is essential in helping predict future purchases and target campaigns more effectively. In addition to the value of the transaction itself, this data also reveals key information about time, location, and other factors related to the transaction where we can measure campaign effectiveness.
iGoDirect have the right expertise and experience to transform customer insight into practical business opportunities through targeted direct marketing campaigns.
Stage 4: Predicting/Influencing Customer Behavior
Once we are able to treat customers as individuals and understand their behavior, the next and final step is to be able to predict (and even influence) their future behavior.
This stage involves heavy use of data mining against large amounts of detailed data. Using sophisticated analysis tools will allow us to model, predict and ultimately influence your customers' behavior.
Regardless of where your company is at, iGoDirect can help you use this model to define an incremental approach to achieving true customer insight and enhance your direct marketing activities.
