40% of Customers Buy More with Personalized Messaging

The Challenge: If you are not creating a personalized preference-driven experience for your customers, they’ll go looking for that type of experience--with your competitors.

According to a study by MyBuys , an e-tailing group, 40% of respondents stated that they buy more from retailers that personalize their shopping experience across channels. Addtitonally:

  41% buy more from retailers that send them personalized emails

  39% buy more from retailers that personalize Web recommendations.

The study noted that the practice of tailoring offers and promotions to consumers based on their past shopping or browsing experiences appears to increase buyer readiness, engagement, and sales activity. These findings are reinforced by sales data from MyBuys' database of some 250 million shoppers: Customer-centric marketing delivers a 25% increase in total online sales and a 300% improvement in customer lifetime value, according to the company.

Guitar Center, the world's largest retailer of musical instruments, not only understands the value of personalized customer service and engagement marketing, they’ve actually won the “Customer Engagement Award” from Retail TouchPoints, for embracing customer engagement and implementing solutions and services that are actively getting customers involved in their own experience and buying process, while improving their bottom line.

In addition to allowing customers total access to all instruments in the store, the ability to interact with industry professionals, and a chance to take their amateur talents to the next level, to the company also endeavored to improve the in-store customer experience even more by introducing, the “Find an Expert” profile pages. On these web pages customers can search for employee/experts online by location and store to develop dialogs and working relationships with these Guitar Center, (GC), experts based on similar musical tastes and interests. Customers can regularly engage with GC experts via email, through their blogs, and in-store. Additionally, in 2012 the company introduced a Music Mentor Series, an unprecedented company-wide platform that gives customers the ability to advance and enhance their musical pursuits, right in their own communities. Activities for the Music Mentor series included free music lessons.

Key Takeaways:

•	Differentiate your company by providing personalized experiences, communications, and offers.
•	Provide clear ways of showing customers that you're listening to their feedback and creating personalized experiences. This will reinforce ongoing participation by customers.
•	Personalized follow-up emails that detail items or events specific to the customers’ interests and buying history are value-added triggers that are welcomed by customers.

Focusing on Relationships, Not Sales, Generates Greater Revenue

The Challenge: Traditional marketing has often focused on getting the sale. Instead, marketers should focus on retention and how to keep more customers for longer periods. Customer Lifetime Value, (CLTV), is a simple equation for helping you calculate the value of increased retention.

By understanding the lifetime value of a customer, you can determine whether you are spending enough to keep and groom customers, and what the resulting revenue will be from ongoing, repeat, purchases.

Insert actual or estimated numbers into the following lifetime value equation:

(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer).

Kellogg Professor John Parker explains, “Organizing marketing to improve the performance of three key ingredients–lowering acquisition costs, raising total margins, and reducing the churn rate–can be an even more powerful application of CLTV for CMOs.” Research from Bain & Company shows the increased value of customer retention versus acquisition:

•	Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer
•	Over a 5 year period customer attrition rates could reach as high as 50% if databases are left dormant
•	Businesses which boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95%.

 
When we focus marketing efforts on customer retention rather than acquisition and engage customers throughout the entire relationship, the result is an increase in the lifetime value.

3 Takeaways for Marketers:

1. Engage with customers at 3 points in the customer lifecycle:

•	Pre-Sale: Understand their needs and preferences and begin engaging them accordingly.
•	Sale: Don’t think of the sale as a “close”. The sale is not the end; it should be the start of building a proactive, value-based, relationship.
•	Growth & Retention: The period between the last sale and the potential next sale is an opportunity for you to provide ongoing, proactive, engagement, and value. This is the time to gain a better understanding of your customers, why they purchase from you, what motivates their purchases, and how you can provide value between purchases, to keep them loyal and engaged. ERDM research shows that engaging and forming strong relationships with customers has 12 times more influence on retention and repeat purchases than customer satisfaction alone.

2. Cut down on email blasts and send only relevant, preference-based communications. A powerful way of proving that you care about your customer is to cut down on email blasts and only send targeted and relevant communications and offers. Consumers resent brands that indulge in “spray and pray” blasts of irrelevant email. This is viewed as disrespectful of their limited time.

3. You are probably not spending enough on your top customers. Identify the top producing customer segments and revise your spending accordingly. See the visual above.

Twitter: Using News to Connect with Your Audience

The Challenge: News and events provide powerful opportunities to connect with your audience. Twitter makes this easy. Following are 7 tips.

While not all companies can have a social media “touchdown” like Oreo’s now famous Superbowl blackout tweet, real time marketing is accessible to any size company. It only took 3 minutes to Tweet “Power Out? No Problem” with a captioned Oreo image “You Can Still Dunk in the Dark”.

Oreo is a great example of the discipline of Real Time Marketing. To see how important this has become, consider the Oscars and all the companies making attempts to become the next social media sweetheart. The marketing industry was even monitoring Twitter with #OscarsRTM documenting real time successes and failures.

Cleverly connecting with the audience is not reserved for big brands. Any size company can leverage news or events to make relevant connections through Twitter.

7 Takeaways for Marketers Using Twitter:

1. Knowing your audience provides an essential understanding of how they will react to your approach to a topic. Voice of Customer research by our firm reminds us to focus on the customer’s experience at all times across all channels. Evaluate using some of the many social media monitoring tools to keep up with what the public is saying.

2. Become a news resource for your industry. Announce newsworthy topics on Twitter ahead of the trend.

3. Real time response and empowered staff are essential. The social and content accelerators at ConvinceandConvert.com tell us “That’s why it’s so critically important to staff your social media front lines with people who not only have extraordinary passion for your company, but who also have the experience and judgment to minimize response delay”. Know what to look for when hiring a social media manager.

4. The media event and your company do not have to be related. However, you must add relevant value to the conversation. That value must tie back to your brand.

5. Communicate messages with the intent to interact. It’s not about selling. Richard Robins advises, “Customers want to be engaged, not targeted. With the exception of a few "passion" brands whose customers wait for any bit of product news, customers largely don't care about products. (If we cared, brands wouldn't have to pay $4 million for ads to reach us.) “

6. Learn from some significant mistakes committed during the past year. Stay on top of current events and understand why a topic is trending. The last thing you want is to gain attention for a social media #fail.

7. Do not expect every venture into real time marketing to work. Like other disciplines in marketing, this is all about testing and measurement.