Building loyalty: From cross-channel to agile use of channels

8th Nov 2012

Any marketers worth their salt will readily quote the mantra that winning new customers is five or six times as costly as retaining existing ones. However, consumer brands have traditionally been better at reeling in new customers than at tackling the perennial issue of churn.

At a time when the balance of power in buying relationships has firmly shifted to the customer, it is critical for companies to adjust their business model – fast. Instead of focusing on customer acquisition, with its reliance on costly offers and discounts, they need to put retention strategies at the heart of their operation and maximise the lifetime value they can derive from each customer.
To achieve this, brands need to home in on their customers, acknowledging the power they wield and what drives their buying decisions: they want to stretch their pounds and euros as far as they can but don’t simply want to get things ‘on the cheap’. They want added value on top – and don’t lend their trust to brands as easily as they used to.
What is needed is customer-centricity and customer relationship management in its purest sense, but at a competitive cost to the supplier.
Priorities for marketers
There are three key areas marketers must focus on to build strong customer relationships, maintain a loyal customer base and add value beyond price. 
A single customer view is critical for customer service agents and salespeople to engage with customers in a meaningful way. With the ever-growing quantity of customer data being generated – not least from social media interactions – having analytical tools that can manage this complexity is fundamental for optimising segmentation and targeting.
Having all this information at their fingertips will enable companies to tailor offers and services to the individual customer rather than mass marketing undifferentiated offers, thereby creating a warm sales opportunity.
With the ever-growing range of communications channels customers alternate between, marketing messages must not only be highly targeted and individually tailored, they must also convey a consistent overall brand image across all channels.
Achieving single customer view 
Businesses have long struggled to create single, centrally held repositories for customer information and make them readily accessible to guide customer interactions. The advent of social media has only exacerbated this situation.
While companies have a wealth of data, the latter is often held within disparate systems owned by different parts of the organisation. Often these silos of intelligence have evolved over time, and with little or no integration, they cannot be interrogated easily. In extreme cases, customers can be forgiven for thinking that they are not dealing with one but several companies as enquiries are passed from pillar to post. Not only does this affect the brand experience, it can also have a severe impact on the bottom line.
Furthermore, performing all-important customer analytics across silos is a challenge. Forrester analyst Kate Leggett listed the creation of a ‘universal customer history record’ as the top priority in customer management in 2012. In a blog post from January this year, she highlights that having full access to customers’ buying history and previous interactions is vital to strengthening a brand’s relationship with them. One solution marketers are starting to use to address this is search-based applications that overlay the organisation’s existing information repositories (Forrester, January 2012).
Delivering a personalised service
With a single access point for all customer information the organisation can enter into a meaningful, two-way dialogue with customers, in real-time – whether it is over the phone, by email, via social media or any other channel.
This process is supported by ever-more sophisticated analytics that straddle the online and offline worlds, and take on board more and more ‘feeds’ of inbound customer information, whether it’s demographic, location-based or behavioural.
Behind these technology-led advances is the quest for more differentiated segmentation and precise, personalised targeting. The goal here is to enable frontline staff to engage with customers by suggesting the ‘best next action’ matching their individual circumstances.
Rather than flogging the ‘Deal of the Week’ indiscriminately and risking high opt-out rates, this means tailoring up- or cross-selling offers to the individual customer’s needs, preferences and stage in the customer life cycle.
From cross-channel to agile use of channels
Gone are the days when brand communications were mainly one-directional and customer interactions largely over the phone. Today even the multichannel concept is looking dated in the face of the rising number of customer touch-points, which have been boosted by the growing popularity of social media.
As communications channels are shifting to what the industry calls SoLoMo (social, local and mobile, see Marketing Week, March 2012), so is the delivery of marketing messages. The challenge today is catching customers at the right time, with offers that relate to their location or what they are doing, in order to create a warm sales opportunity.
To support real-time marketing of this nature, it is crucial for all company communications to be aligned across platforms – whether it is print, email, the web, social media or call centres.
According to Forrester’s 2012 trend forecast, customers want to be able, for example, to start a dialogue in one communications channel and complete it in another. For instance, if they have already had an exchange on a brand’s Facebook page or via Twitter, or have received an offer by email, the expectation is that the call centre will be aware of these interactions when they ring.
This reinforces the need for organisations to break down the historical silos between customer-facing functions such as service, sales, marketing and brand so they can jointly deliver a harmonious brand experience.
From customer centricity to engagement and loyalty
The old adage of ‘the customer is king’ has never been truer than it is today, with customers – and their social networks – in firm control of the buying relationship. To succeed, brands must abandon undifferentiated, unilateral outreach and forge a genuine, ongoing dialogue that permeates a customer’s life. Only then will they be able to offer the experience and added value today’s ‘customer kings’ demand and will want to engage with over the long term.

Kieran Kilmartin is marketing director, EMEA, at Pitney Bowes Software.

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