In a very interesting article in Peppers & Rogers(1-to-1 Weekly), Don Peppers says "One to one marketing means treating different customers differently," explains Peppers. "It means recognizing that your company's primary strategic asset is your customer relationship. Instead of developing a product or a service and trying to sell it to as many people as possible - making them fit your product - you find the customers and make sure your product fits them. The goal is to sell more goods to fewer people."
Until recently, this vision was completely unworkable on a large scale. The costs were impossibly high and the logistics were beyond comprehension. Enter the information age and exponential increases in computing power. New technologies enable companies to interact with customers, to remember their needs, preferences and interests. Suddenly one-to-one marketing becomes more than possible. It becomes essential to survival.
According to Jim Barnes
Measurement is an integral component of performance management so that companies are able to identify where performance falls short of desired results and improvements can be made. Certain standards or performance are set, suggesting that there is a good understanding of what level of performance will drive customer satisfaction and implying that, if performance falls below these standards, customer satisfaction-and ultimately loyalty-will suffer.
But where does such an approach to performance management fit with the customer-focused organization of today? Progressive companies have moved well beyond the efficient, tactical, transactional approach to service delivery, recognizing that these are increasingly "table stakes" and tend to be more focused on delivering positive customer experiences.
For decades Credit card companies have used Reward & loyalty programs effectively. Is there potential to do the same for bank accounts. Capital One has launched this new account that allows you to get rewarded for your everyday transactions. This is a unique move to reward customers basis their average monthly balances.
"The Rewards Checking account is a free, no-hassle way for customers to earn rewards for many things they are already doing, like shopping and paying bills online," said Diana Don from Capital One. "Capital One's new checking account offers more ways to earn rewards and a variety of ways to redeem them, giving customers the flexibility to decide which rewards are best for them at any given time."
The interesting point is that the Rewards Checking account is free. There is no monthly fee, no minimum balance and no fees to use rewards. And it takes only $50 to open. Now where is the catch , when was the last time you got something free from a bank! Does it make sense for banks to have individual loyalty programs for different banking products. In fact it is more profitable for banks to have a bank wide loyalty program which rewards a whole range of banking behaviors. However launching products or features that go across "silos" within a bank is always a challenge!
Read more about this and it would be interesting to hear your views on how "sustainable" this program is?
As the economy slows down, it is even more critical to look at customer behavior closely to spot "likely defectors". Retailers have so much data about the way their customers are behaving that they can set up "trigger points" that alert the marketer that there is a change in the customers behavior. In fact at Cequity we believe that managing "downward migration in customer value" is far more important than "managing churn". The interesting part of this philosophy is that you do not need very advanced CRM systems to really execute this-even simple Microsoft Excel based "trigger points" can do the trick!
Michael Greenberg has this very interesting article on creating "inflection points" for spotting customer behavior changes. http://chiefmarketer.com/crm_loop/database/fence_customers-03242006/index.html
Are we truly listening to our customers? We are now seeing an increasing number of companies cocreating and collaborating with their customers, and that starts with gaining an understanding of their needs, preferences, and expectations. In fact creating a well structured “customer listening” program is essential but not enough! Companies must also develop mechanisms to be able to take action on that data and that always requires persuasive leaders at the top who influence others in ensuing that the company “truly listens to it’s customers”. Ginger Conlon has written this interesting article called “Are You Listening?” Have a look and design your “customer listening” program!
Isn’t it amazing how some companies make things “complex” for the
customer and therefore make money from it. I looked at my bank statement today
and saw that I had two charges from the bank for my debit card-an activation
fee & an annual charge! Possibly banks & telecom companies are two
businesses which do this “sleight of hand” almost all the time.
There is this fantastic article in the Harvard Business Review, entitled
“Companies and the Customers who Hate Them” by Gail McGovern and Youngme Moon.
They get to the point about the ways that companies take advantage of their
customers by increasing complexity.
It’s amazing how the human mind works when it comes to analyzing facts.
It’s almost as if the mind seeks to evaluate everything in context. It’s almost
as if everything is relative. You see the price of an item in a retail store
and if a similar item is on sale and has a 25% lower value you immediately
reduce the “perceived value” of the first item. Consumers are constantly making
trade offs like these in the real world. There is an amazing book about this
called “Predictably Irrational” by Dan Ariely. The interesting point he makes
is about how placing “irrational pricing facts” side by side with other “original
information” allows the consumer to accept the “original information”. He makes
this interesting point about the Economist pricing-if you look at the table
below…would anyone choose the “irrational pricing” of a Print subscription when
in the same $125 you can also get Web. The point is that placing that
irrational fact helped the Economist “reposition” the pricing!
Have a look at this & more from Dan Ariely himself at :
Isn’t it amazing that banks don’t call you when they should.
Today every customer is seeking comforting news about his or her bank! Do banks
call to tell you that they are doing very well despite the crisis! Wouldn’t
that be comforting to a depositor to know that his funds are safe ! Banks
should be much more active users of Event based marketing-both external events
& also events picked up by the transaction behavior of their customers.
Some banks are great at this from a Risk perspective and will call you to
replace your credit card if you have returned after visiting a country that
they may slot as “risky” from a credit
card fraud point of view! But how many banks are able to run a Event
trigger based marketing strategy that seeks to build better customer service!
If you service your customers well , sales will happen! We at Cequity believe
that it is critical to create Event based marketing competency that allows you
to market in such a “relevant way” that it almost “feels like a service”
Elizabeth Glagowski has this lovely article on “When I Want to Hear From My Bank, They're
In today’s times of gloom when celebrated brands in the
banking world are disintegrating almost overnight, it is interesting to
consider that from a consumer’s perspective the only part of the brand that
truly matters is the “customer experience”! How companies can create a truly distinctive customer
experience is possibly a million dollar
question! But there are simple rules that can allow operating managers to think
about this and systematically build such a differentiator.
Analyst at Forrester Research, has written this simple & easy to understand
e book that gives you in a nutshell the 6 laws of customer experience.
very interesting comment that Bruce makes is “While employees may want to treat customers
well, you can't just expect them to do it. Why not? Because companies want
their employees to do a lot of things. But organizations often hone their
measurements, incentives, and celebrations to achieve short-term growth and
profitability targets. So without any explicit intervention on behalf of
customer experience, the environment will push employees to focus on just about
anything except customer experience”
Read Bruce's interesting book and apply it in your business,here is the link!
How do you ring fence and protect your valuable customers from churning . This is a problem CMO's face across a variety of industries. John has an interesting take on this and asks a simple question "if you lost 2 pints of blood , both you and your doctor would be worried but many businesses sit tight despite losing more than 10% of their customers in a short time"
A lot of customers attrite suddenly, one fine day they seem to have had enough of your product or service. Normally there is some ‘event" which drives it. John describes this as the phenomenon of "frustration churn". He goes on to define this to be "the phenomenon of customers who have chosen to leave you for your competitors as a result of their disappointment with your products and services (and their experience of how you provide them to them)" . Examples of ‘frustration churn' include billing errors & the product or service that doesn't work reliably.
Read John Corr's post to see how reducing 'frustration churn' could increase your business value by 15% or more.
It is amazing how concepts like customer retention seem to be accepted by all and acted upon by so few! It almost seems like these are nice things to talk about in conferences and that's about it! Especially in "high growth" markets you have the added dimension of high customer acquisition rates making up for loss of existing customers-"the leaking bucket syndrome". The challenge here is that if you truly want to stem the attrition problem you need to make some fundamental changes to the way your company engages with customers. Often the belief is that lets give the customer a very attractive "offer" to continue the relationship. But by then it is probably too late to hold the customer back.
We at Cequity believe that is much more profitable for marketers to manage "downward migration" rather than "attrition". You can arrest "value migration" if you are able to create metrics that spot the downward spend behavior of a customer and create "customer lifecycle based action plans" to arrest the downward spiral at an early stage!
Elana Anderson has some nice ideas around how you can measure "retention" and create commonly understood metrics around it. Have a look at Elana's post
Most large banks today have millions of incoming calls every month. Customers calling in to enquire about services or ask for information about new products. Often these transactions are not very pleasant for customers who face issues ranging from not being able to connect to the call centre, to not having their query resolved or being told to come to the branch for resolution. At the same time, these millions of calls are a great opportunity to cross sell "relevant products &services".
Patric Timmermans, in an interesting article explains how a blend of analytics and customer service can maximize customer interaction, generate new revenue and induce loyalty.