Customer Value: Narrowcasting vs. Broadcasting

Virtually every brand we’ve met with in the last few months is hungry for new customers, the war for the customer is on. For more on growing your customer base, consider reading “Bigger is Better, How to Scale Up Customer Acquisition Smarter” an article we published recently about how to grow your customer base. Many organizations are hooked on customer acquisition. That is, in order to hit sales plans for the organization, new customers will be required in large numbers. It’s about as easy to kick the ‘acquisition addiction’ as it is to kick any other for most brands. Try going without coffee suddenly, and see how your head feels. It’s not very different from reducing a business’s dependence on customer acquisition as a means to achieving revenue and profit targets. Organizations that need ever larger numbers of new customers to achieve growth goals eventually will find the cost of acquiring incremental net new customers can become prohibitive. Broadcast vs. Narrowcast The traditional model for advertising and customer acquisition has essentially been a broadcast approach, reaching a large audience that is generally descriptive of the customer a brand believes to be a fit. Contrast this with what is sometimes described as a “narrowcasting” strategy. Narrowcasting utilizes Customer Intelligence to understand a great number of discrete dimensions that a consumer possesses and can leverage statistical methods to validate the accuracy and predictiveness of targeting customers through these methods. The chart below, depicting the value of customers acquired through traditional broadcast capabilities upfront and over time, helps illustrate why “broadcast” strategies for customer acquisition alone aren’t enough. Broadcast Acquisition Strategies Lack...

The Most Important CRM Metric You Might Be Missing

Virtually every organization we have worked with in the past year is working on managing, improving, or optimizing their relationships with customers. This work falls under the umbrella term “Customer Relationship Management” or “CRM.” It is, of course, the oldest ‘new thing’ that marketers have focused on, en masse, for a long while. “CRM” as it is, is a term that means many things to many different organizations and to different individuals in those organizations. This has created some confusion and leads to missed expectations in organizations. Through meetings and executive interviews with brands, we have found that the majority of marketers will eventually describe the primary purpose of “CRM” initiatives is to grow the value of customers that do business with them. We say “eventually” because the initial responses to the question “what is the objective of your CRM initiative” gets quite a few answers including:   Know our customer better Improve communications with our customer Grow customer relationships (most common response, and also the least actionable) Decrease the usage of promotion Reduce the volume of emails sent   These are just a few of the ways the organizations we work with begin to define their CRM initiatives, but to really make a difference in the business CRM needs a clearly defined vision: Intelligently managed customer relationships grow customer value. It drives incremental profit by either reducing the cost of promotion, or driving incremental profitable revenue. CRM requires ongoing testing and learning which can strategically inform customer acquisition and in turn increases the quality of the business.   “Intelligently managed Customer Relationships grow customer value. It drives incremental...

Omnichannel Customers Are 2x as Valuable — How to Make Them Yours

With so many trying to sort out an “omni-channel” marketing strategy, I thought it would make the most sense this month to provide some structure around what it is, the best way to take the “buzz” out of the term, and provide a framework for thinking strategically about this new mandate in marketing and strategy. For starters, here’s a simple idea, or “true north,” you can use to drive your own marketing strategy as you embrace the omni-channel consumer. “Put the Customer First” and build your “omni-channel strategy” around them. Let’s remember, connecting with, engaging and finding the right new customers are where customer value is created and realized in omni-channel marketing. Optimizing that value comes through studying and tuning communications, improving your relevance and becoming more creatively authentic, not in the boardroom, but in the eyes of your customer. Today, marketers appreciate that consumers engage on multiple platforms, devices and channels—the ones they want, when they want. With mobile devices being a spontaneous window into their thoughts and an outlet for their wants and needs as they arise. What’s a bit more subtle and more often missed is the objective and capability to respect the way your customers choose to engage and buy across them in a scalable manner—as it will either fragment their relationship with your brand or galvanize it. Consider Kohls. Not exactly a high tech player in most folks’ minds. However they now deliver an omni-channel experience that deepens relationships with them. Recently, my wife Janine received a promotion by direct mail (I doubt if she remembers when they asked for her phone number the...

Marketing Brief: Never Lose Another Email List Subscriber Again

Acquiring new business is a critical function of web analytics and tracking, but equally important is maintaining existing customers and growing their lifetime value. Integral to that is measuring and drawing insights from how they interact with your corporate website, and then intelligently using this information in email marketing campaigns. This recent article from BtoBonline.com illustrates this relationship perfectly. The first point brought up? Rethink relevancy. While it’s possible to determine what is relevant to your subscribers and customers simply by monitoring their email open history, it’s much easier to understand what your customers consider relevant (and more importantly, irrelevant) by monitoring how they interact with your website and then using that information to build better email...

The Good and The Bad of Customer Testimonials

Few things put customers as at-ease with using a brand as a testimonial from another customer. Some studies peg the boost to conversion rates at as high as 200%, though most caution that a 25-50% increase is more likely. With these kinds of numbers, marketers should be leveraging every opportunity they have to add “social proof” to their conversion process, and a good number of them have. According to the Marketing Sherpa Landing Page Handbook survey of marketers, on a scale of 1-5, marketers rated customer reviews a solid 3.5 for effectiveness. The big caveat to the testimonial subject is that as the trust level of the testimonial decreased, so did the boost to the final conversion rate. Trust, when it comes to product and service reviews, is fairly simple to quantify: Third-Party Reviews > On-Page Reviews > Video Testimonials > Audio Testimonials > Text It seems that consumers have figured out how easy it is to fake a testimonial not long after businesses figured out the same. So as the ease of fabrication increases, so too does a potential customers’ skepticism. Since it’s noticeably harder to record audio and video than type out some text, those formats get a higher level of trust, and all three “testimonial” formats dwarf in comparison to obvious user-generated reviews, both on the site in question and on third party sites like Yelp, Google Products and Places, and Amazon Reviews. For e-commerce sites, the majority of testimonials should be user generated to ensure maximum trust and foster a positive attitude towards your brand. Not all Reviews are Created Equally As with any tool,...

Client Spotlight: Havaianas

Search, analytics and email have all played enormous roles in revolutionizing the e-commerce business over the last 10 years. Online retailers have especially benefited from the influx of search traffic and the rise and continued dominance of email, since both of these channels create lucrative opportunities for marketing and sales. Havaianas, the international flip-flop phenomenon, has been using email as a marketing tool since the launch of their website in 2007. The footwear company was initially looking to increase conversion and engagement, but they quickly saw an opportunity to use email and analytics to decrease website drop-off and improve overall shopping cart abandonment. Their hard work has paid off and the results have been staggering: email is now the #3 revenue driver for Havaianas sales in the U.S. Not only that, website conversion rates have improved significantly with a stronger focus on analytics and site optimization and shopping cart abandonment rates have dropped significantly, meaning increased online sales from shoppers who had previously neglected to checkout. Alison Marsh, Associate e-Commerce Manager at Havaianas explains how Endai’s analytics and email marketing strategies played a strong role in improving conversions and increasing revenues. “We implemented Site Preserver ™  for shopping cart abandonment four months ago. The return has been pretty great. Now we have a much higher conversion rate for those subscribers who abandon and click on the cart reminder email. Plus, those emails have higher engagement (through open rates and click throughs).” Site Preserver ™ has been key in helping decrease cart abandonment since many times customers need additional time to think about a purchase and sending reminder email to...