Looking for Customer Loyalty- Know Your Customer Better

The keys of a marketing program that builds lasting relationships with customers and protecting profit margins.

Marketing one-to-one based on the idea of ​​establishing a learning relationship with each customer, starting with the most valuable. Although the principles of so-called “relationship marketing” are simple -Ask customers about their needs, interact with them and adapt the product or service to their demands, their implementation is complex. And too many companies, without proper preparation and with the excuse that they need to know their customers, overwhelmed with telemarketing campaigns and direct mail. In this note, Don Peppers offers useful to carry out a proper relationship marketing strategy tips and guidelines provides an exercise that allows to discover if a company is able to face her.

What are the advantages of using a marketing strategy one-on-one?

By creating a relationship with the customer, the company ensures their loyalty and protect their profit margins. When customers are not loyal, they are always looking for a competitor that offers lower prices. Therefore, companies embark on constant price reductions and, as a result, margins decrease.

You can win the loyalty of its customers, however, will not necessarily be obliged to propose cuts to match each competition.

What are the best customers to establish a one-to-one?

There are two types of value: the actual value, which is what is expected from the customer over a period of several years; and strategic value, which is what could be obtained from a client with growth potential uncovered, if a strategy to lure applied. In this context, the ideal customers for a one-on-one are those who are willing to work with the company to create the product or service they need; those who can help, because the company can do things better than themselves; and finally, those who have a strategic value for growth potential.

What are the steps to implement a relationship marketing program?

Identify customers; differentiate by value, actual and potential, which have for the company; interact with them and adapt their products or services to meet the individual needs of customers.

To know and differentiate customers have to have a large base of information.

How do you get it without feeling invaded?

In principle, we must never try to obtain information from a client without knowing previously what you are being used. Each of the data to be searched must have a clear purpose.

Another aspect worth considering is that no one likes to answer long Customer Loyalty questionnaires.

The companies that subject their clients to countless questions, all they do is irritate them and away. I suggest, instead, what I have called “dialogue of drip irrigation.” That is, every time the company interacts with a client must obtain a drop of information to complete your profile tastes, demands and requirements, instead of trying to put the puzzle input, using a single questionnaire and when not yet established a relationship of trust.

Because the more you know the customer’s business better adjust their behavior to what you need, that person will be willing to provide information whenever prompted.

And it affirms loyalty …

Yes, but it is a process that takes time. Literally, every time the customer gives you some information to a company, wants to see tangible results. The company wants to use that information to their advantage.

If a travel agency, and the client tells him not to smoke, that person expects that you reserve a non-smoking area in the hotel. If told that his favorite newspaper is the Wall Street Journal, you do not want the hotel people asked what their favorite newspaper; aims already know what it is.

So the more questions you answer, the more benefits expected; and only if you get them, you will find value in having provided information to the company.

Why do you say that in marketing one-to-one technology that is used plays a major role?

When I speak of technology I do not mean simply, which will automatically dial a phone number. The caller to a client must be able to read on the screen of your computer, what to ask. The conversation must have a predetermined script; you can not leave it to chance, or ask any questions.

Something similar happens with an automated sales force. The seller talks to the client after having checked his profile, and once you are able to follow a series of sales patterns. But the structure of the conversation that will keep is based on what the marketing department considered previously, would be the appropriate type for each customer or group of customers in particular message.

So, thanks to technology, the interaction process is almost automatic. It is also essential, of course, to organize information that is collected from customers. If the company has several thousand customers, you must seriously consider the need to acquire a tool of “data warehouse” (data storage) class. But if the company is small and has only a few hundred customers, you may find enough to buy a contact management software in a business computer. Many can be synchronized so that two or more vendors enter the information. If your process is more complicated, but not required to use data warehousing architecture, you can appeal to a system of sales force automation mid-range, or a marketing automation software.

There are many vendors who sell these applications, and not about investing multimillion amounts, but just a few thousand dollars.

When a company hires him to implement a marketing one-to-one, what are the stages of that process?

The initial stage is evaluated.

I have to determine exactly what the situation is regarding identification and differentiation of its customers. I should know if it has properly classified by value and your needs, whether you interact with them efficiently in terms of cost, and if you are able to adapt their products and services to customer needs.

So the first question I ask is: “Do you know the identity of their customers?”. Because maybe that company sells through dealers or retailers, and know their identities, but not the end-user. The second question is:

“You want to create a relationship with end users or resellers?”. Because you can do both, but the company is the one to make the decision. If the company is a retailer only you know the identity of a fraction of their customers because they sell a lot but do not know who bought it two weeks ago, so I advise is a marketing program often. Essentially, it is to give customers a card, and make a discount each time they buy. That way, the company can identify their frequent customers, and to emphasize them when you want to know more deeply.

Once identified, how the difference in order to adapt the product or service to your demands?

We split. To find out how it differs from the other client to take, in the database, those items that will build a statistical model. Then you have to find out what that path is point each client and represents how many potential business. But most important is to determine what their needs; because if I can differentiate according to them, I tell you with a mechanism to adapt the product or service, guided by the objective of meeting them. Now, what happens in the case of a telephone company?

Because the service provided is a kind of “commodity,” something undifferentiated. And all customers want the same thing: a quick, efficient and inexpensive connection to another phone.

It is not possible to conceive a telephone service tailored to each client. But what the company should do is analyze the use that each client gives the phone, find out what support services you use and try to differentiate it according to your needs are. Some will use it a lot because you work at home, and another person that travels frequently; both are heavy users of the service, but for different reasons, and the phone company must consider both needs.
If you target your database in large, medium and small customers, and corporate and individual clients in each segment will detect the shape of phone use. And each of these types of customers demand different services. For example: a person who travels a lot will need a special card, or maybe you want an account with code to charge calls to its customers; the person who works at home want your phone number and your fax line are elmismo, and perhaps some additional services for your computer. When you link those needs with the products offered, the company may suggest to its various customers other services that would solve their problems and their life easier.

In the continuing quest to differentiate customers, there can be no danger of saturation?

It is probable. Especially today, when people are exposed to thousands of stimuli per day, it is not uncommon for someone to say, “I do not want to bother me more.” If more and more companies interact with their customers individually, people do not want to set too many relationships. It will choose one that will manage your financial affairs, one that will give health-related issues, and one that addresses your travel and vacation, for example.

They aspire to have deep relationships with those few companies; and relationships to be more durable and identify those that best meet their demands.

And those that do first …

Of course. The first established a one-on-one with clients, everything is easier, beyond other companies to come to them and be more competitive in terms of price, for example. For those customers they have already told him what they want and whenever you use that information well, he will be loyal. In short, the work of re-tell other companies what they want are saved.

You can always happen that someone, to conquer market, decide to give away your product for a certain period. But, ultimately, this strategy is too expensive.

Is the condition for confronting the marketing one-to-one is having a base of well-armed and differentiated data?

It is not always necessary to arm the outset, a large database.

Consider a real example: a car dealership in San Antonio, Texas, charging patent numbers of cars clients in a database that costs $ 69. As the booking office has a service shifts large window overlooking the parking lot, whenever he sees a car approaching, the employee enters the patent number into the computer and, as soon as the driver then parked it, go to the office, calling him by the name salutes and says, “I know what you need your car.” It’s an easy idea to implement, but gives excellent results. Over time, people will demand the same treatment to all companies which it operates.

Is it possible to monitor in real time the effectiveness of marketing activities one-on-one?

Yes, pushing a control group made up of customers who are serving with the conventional marketing, but statistically equal to the group in which the program one-on-one was applied. It is sufficient to note the differences that occur in the two groups to determine the effectiveness of the new program.