Eight ways to optimise revenue in the customer lifecycleby
13th Sep 2012
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Joe Cordo provides eight easy steps to achieving right time revenue optimisation.
High performance marketers recognise that optimising revenue is a journey and not a destination. After all, customer behaviour evolves based on need, the right time to buy, and through the appropriate channel. Customer lifecycle marketing is dynamic in nature, but the rewards are great because it is much more effective to acquire and retain customers. Evolving customer lifecycle marketing to drive revenue performance not only generates higher profits but creates a more satisfying experience for customers and can be achieved by following these eight proven best practices:
Step 1: Zero in on the customer lifecycle
In developing a multi-channel marketing strategy and executing campaigns, most marketers profess to be very customer-centric. But often that customer-centricity is very linear. It views the customer typically in the context of new customer acquisition, and there usually is homogeneity about the interaction, e.g. disproportionate spend on one marketing channel or a lack of insight on how the customer wants to interact with the brand.
According to Forrester Research (Customer Life-cycle Marketing Demands New Metrics, February 8, 2011), a customer lifecycle approach forces the marketer to think about the customer’s buying process along four key dimensions:
These four dimensions represent different strategies, channels, and forms of customer interaction and buying opportunities. In fact, according to Forrester Research (Cross Channel Design, One Channel Pair at a Time, Forrester Research, January 21, 2009) 70% of all buyers want to interact with brands across different channels, depending on their buying stage. Adding to this complexity is the stratification across interaction platforms, e.g., tablets, mobile, laptops, PCs, and kiosks, and voluminous customer data sources across and outside the organisation.
Take the four stages and design integrated multi-channel campaigns, through the use of program flows, for each stage. For example:
- Discover – Welcome and lead generation / customer acquisition campaigns
- Explore – Nurturing campaigns
- Engage – Re-engagement or engagement campaigns
- Buy – Promotional or call-to-action campaigns
The only way to create and drive an effective multi-channel marketing strategy is to build it from the outside in – through the customer lifecycle, mapping the various stages to your customer buying behavior, channels, platforms, and data sources. The combination of buyer behaviour, channels, platforms, and data sources around the customer lifecycle also contains the necessary information to drive a much more effective multi-channel marketing campaign based on right time revenue optimisation – making the right offer at the right time in the
Step 2: Where to start in the customer lifecycle
The most obvious place to begin multi-channel marketing is with the discover phase of the customer lifecycle. This is especially true of marketing organizations that are totally driven by selling more products. At this juncture, marketing organisations often set up their outbound channels, i.e., email, events, and inbound channels, SEO, pay-per-click, and social media, to drive the most leads into the top of the sales funnel or to create buying opportunities in the case of B2C. However, an initial mistake marketing organizations make in taking this approach is a failure to review their customer interaction history. This history, with the idea that past behaviour is the best predictor of future performance, guides the marketing organization toward the right combination of channels to use in their multi-channel marketing strategy.
The explore and engage stages of the customer lifecycle are part of the continuum toward producing buying opportunities, whether as a sales qualified lead in B2B or a ready to buy in B2C. Again, customer interaction history is critical. While leads may be initially generated through email, events, or a variety of inbound channels, this stage may see more time spent on the Web site downloading various forms of content, interactions in online groups looking for customer references, discussions with sales, or continued receipt of email campaigns with new offers. In this stage, since the type of interaction is different, i.e. a potential greater readiness to buy, so are the channels needed to reach and cultivate them. To bring these two elements together, marketers must carefully map their campaigns, i.e. channels, content, and offers to the stage.
Stage 3: Define the use of customer intelligence
Marketers embrace the need for customer intelligence as a way to provide them with actionable insight to optimize revenue. However many view creating customer intelligence as costly and complex. The issue isn’t whether customer intelligence is necessary; it’s what kind of customer intelligence do marketers need to effectively segment their markets and then apply it to the customer lifecycle? Defining the issue that way enables marketers to treat customer intelligence as an evolution, rather than a revolution by:
- Treating existing data as customer intelligence
- Learning from it, e.g. what size customer or title groups are your best prospects
- Improving upon it over time and fill in the gaps – even if it is basic firmographic information, e.g. revenue size, industry, titles
Taking this approach enables marketers to learn and achieve results. Marketers will discover the benefits of database marketing and applying customer intelligence in more meaningful ways, and will begin the execution of multi-channel marketing campaigns, at the right time, and in the right places, to optimise revenue.
Stage 4: Apply customer intelligence to the customer lifecycle
Most marketers would be very surprised to learn they already have what they need to get started to create more sophisticated segmentation strategies that are customer lifecycle based. In fact, they need to unlock the power of customer intelligence in the form of their existing data. Whether all of that data is readily accessible, inaccurate or complete is not the point, nor should it hinder you from beginning your customer intelligence journey. What is there is actionable today, right now. Even the simplest marketing campaigns produce customer interaction history that qualifies as customer intelligence.
Ask basic questions that begin to paint a picture around customer intelligence that tells the marketer who is typically responding to their campaigns and how. What is the best way to engage them? Is this the best market segment? In this simple example, a marketer would form the beginning stages of segmenting, profiling, and interacting with customers in ways they want to be communicated with and at the most opportune time.
Stage 5: Know when to educate and ]when to engage
Most marketers don’t think about the difference between education and engagement marketing. But the difference is critical in customer lifecycle marketing, particularly in marketing more complex products.
Interestingly, education marketing can serve to differentiate and create value in the mind of the buyer, while engagement marketing can create a greater connection between brand, need, and buyer behaviour. The key is your decision making around when to apply these forms of marketing at particular stages of the customer lifecycle.
The discover and explore stages are particularly suitable for education marketing. At these stages the buyer is looking to understand their need, or perhaps eliminate particular types of products. The objective in this stage is to move the customer further along toward the engage stage. In the engage stage, engagement marketing is about issues like trial, reviews, interactions among users, and affinity to the brand.
Understanding the difference between education and engagement marketing can also help in channel selection at different lifecycle stages.
Stage 6: Explore your customer’s entire journey
The customer lifecycle should not be confused with the sales cycle. It is a continuum from the lifecycle of a prospect to being a satisfied customer. It’s both acquisition and retention.
Most marketers, especially in the B2B world, think primarily about their prospects as future customers, and secondarily, think about their existing customers as having limited upsell and cross-sell opportunity. But if you think about customers holistically, your existing customers can provide insight into the behavior of your best prospects, while also significantly increasing the opportunity for upsell and cross-sell. This enables you to leverage the customer lifecycle fully.
A holistic view of the customer, around a single profile that details all aspects of the customer’s buying behavior from purchase history through product use and customer service, provides sophisticated segmentation opportunities to increase revenue performance.
Stage 7: Drive account penetration and market penetration strategies in tandem
At the highest level, there are two types of customer lifecycle objectives and strategies that marketers need to consider when leveraging buying behavior – account penetration and market penetration. The former focuses on customer retention or brand loyalty, while the latter is critical to new customer acquisition. Unfortunately, most marketers become preoccupied with market penetration. However, marketers must take their organisation’s business objectives into consideration, rather than assume that new customer acquisition and increased market share is the defining corporate goal. By formulating a specific segmentation and lifecycle strategy around account penetration, organisations can significantly grow their company’s top and bottom lines, fueling new sources of growth.
Stage 8: Get there faster with an action plan
Marketers need to remember that creating a roadmap toward more sophisticated customer lifecycle strategies is a journey and not a destination. The journey involves a specific plan toward realising the use of customer lifecycle marketing to increase revenue performance. However, marketers need to begin that journey by using the data they have available today to drive significant, incremental improvement of revenue results. Following these eight steps will create an action plan for the entire marketing organisation to begin thinking and behaving as high performance marketers focused on the customer lifecycle.