Customer Relationship Marketing
Ernan Roman Direct Marketing guarantees double-digit response rates using consensual opt-in customer relationship marketing solutions, customer relationship management and creating integrated marketing solutions
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IN THIS ISSUE...
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arrow Insights From Ernan
   
arrow Microsoft Achieves Click-Through Rates of 75%
With Small Businesses
   
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INSIGHTS FROM ERNAN
 
Ernan Roman

Given this tough economy, do you know the answer to these questions?

  • Which has more impact on retention and repeat purchases, Customer Satisfaction or Customer Engagement and Relationship?

  • Which is a more significant driver of word of mouth recommendations, Customer Satisfaction or Customer Engagement and Relationship?
If you are like most marketers, you probably picked Customer Satisfaction.

That is no longer the correct answer.

Per results of Voice of Customer, (VOC) research we have conducted over the past 12 months:

  • In this prolonged tough economy, people have come to expect good Customer Satisfaction. This is viewed as a minimum competency and no longer differentiates a company.
  • Customer Engagement and Relationship have become the powerful new factors which impact likelihood to remain a customer and re-purchase.
  • Relationship strength has 12 times more influence on retention and repeat purchases than Satisfaction.
  • Customer Engagement and Relationship also trump Customer Satisfaction in driving likelihood to recommend a company to friends and family.
  • Relationship strength has 18 times more influence on word of mouth recommendations than Satisfaction.

This has tremendous implications for all marketers, especially those who are focusing on acquiring new customers and not allocating sufficient resources to strengthen the quality of engagement with current customers.

Based on the importance of these findings and the tough economy, this issue of the newsletter will focus on Action Steps to help you leverage these findings into improved results.

 
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Action # 1: Ensure that Your Customer Service is Excellent

Per our Voice of Customer,(VOC), research findings, customers expect good Customer Service as a minimum competency. The Customer Service you provide has to meet all the criteria we outlined in our recent newsletter summarizing results of our research regarding Customer Service Call Center Experiences.

Action # 2: Shift to True Customer Engagement

Innovative marketers like Microsoft, Hewlett-Packard and AmieStreet.com have achieved significant results by providing deeper levels of engagement and value for customers. Results are significantly greater than from traditional “Spray and Pray” blasts of email, mail and phone.

The current issue of Direct magazine, (see below) highlights the results Microsoft achieved by providing small business customers with deeper levels of engagement and value.  Top line results:

  • Exceptionally high opt-in rates: 40% to 70%+
  • Click-through rates up to 75%
  • Very positive customer feedback and customer satisfaction scores
  • Responsiveness to opt-in driven offers exceeds the control population
  • Spending by SB+ members significantly exceeds non-members.

AmieStreet.com is another relationship marketing innovator. This young company is the hottest on-line social networking music company and within the first 90 days of implementing VOC-research driven strategies achieved:

  • 16% increase in new customers
  • 16% increase in repeat purchases
  • 13% increase in on-site sales
  • 75% increase in newsletter-driven sales.

Microsoft and AmieStreet.com achieved this magnitude of results by committing to deeper customer engagement through a disciplined 3 step process.

The 3-Step Voice of Customer Relationship Marketing Process® we developed includes:

Arrow Step 1: Know Much More About Your Customer’s Needs . . . Use Voice of Customer Research Insights to Drive Your Relationship Marketing.  
Arrow Step 2: Establish Opt-In Preference-Based Relationships and Uniquely Powerful Databases.  
Arrow Step 3: Deploy Your Multichannel Mix Per Opt-In Preferences.  

Let’s review how you can use the 3-Step process.

Step 1: Voice of Customer Research
This economy has changed decision maker’s priorities; therefore, you need to understand their expectations before risking marketing dollars on outdated assumptions about the marketplace.
VOC learnings based on 88 VOC Research studies for many divisions of  Microsoft, NBC, AmieStreet.com, Bio-Rad Laboratories, Reliant Energy, HP, IBM, and Progressive Hydraulics, Inc. among others…

  • Relationships:
    • “The fastest way to be forgotten is to buy from you.”
    • “Relationship?  You guys are about ‘buy and die’!”
    • “We buy. You disappear without a trace. Oh, except for the bills.”
  • The Web:
    • “I don’t just want to transact, I want to connect with your company and your brand.”
    • “An easy navigation and commerce process is a minimal competency… you better be at least as good as Amazon.”
    • “I am looking for 2 levels of connection: with your company and with others who share my needs and interests.”
    • “When you tell me to go to the web for service, especially while I am growing old waiting for a phone rep, what I hear is ‘Go…help yourself.”
The Importance of Community:
  • Per McKinsey research, people who participate in an effective online community, return to a site:
    • Nine times as often
    • Five times as long.
This represents a 45 time increase in loyalty.
  • Communications:
    • “E-mail may be the base of your communications with me, but I’m getting too much junk.  If it’s really important, send it to me by mail.
    • “Mail should be specific to my role, to what I do all day long.”
    • “Regardless of the medium, it must be relevant to my needs. You need to determine relevance before sending me anything”.
  • Communications and Data Gathering:
    • Advice from C - Level Execs:
      • “You think because I’m the CIO, you have to send all your marketing communications to me.  That’s not how decisions are made here.”
      • “You’re using me as an executive mailroom and I don’t appreciate it.”
      • “I will tell you who you should communicate with, what information they need, when and via what medium.”
How should you use the VOC research? Use it to understand:
    • The critical issues facing decision makers in this economy, as they evaluate your product or service.
    • Steps in the decision-making process and who are the decision makers and influencers.
    • What information and offers are most effective at each step and via what mix of channels.
    • The optimal role for:
    • Arrow Web Arrow Field Sales
      Arrow Email / Mail Arrow Tech Support
      Arrow Inside Sales Arrow Stores.

    • How your customers define a value-added and competitively differentiating relationship with your company.
    • Effective value propositions for engaging customers in an Opt-In relationship with you so they will trust you with their detailed self-profiled preferences.
    • What information and how much information customers / prospects will self-profile regarding their preferences.
    • This information will populate your opt-in database with uniquely accurate information.

 
To determine how / whether VOC Relationship Research can help you,
please click here to schedule a VOC Research discussion.
 

Step 2: Establish Opt-In Preference-Based Relationships and Uniquely Powerful Databases
VOC research reveals your customers’ wants and needs in extraordinary detail.
In Step 2, these voice of customer expectations are used to develop strategies for achieving an unprecedented level of engagement with your customers, such that they opt-in and self-profile their preferences.
This enables you to create the most accurate and powerful database possible.
You build a laser-accurate database UNOBTAINABLE any other way:

  • VOC identifies what customers want and expect from you.
  • Opt-in programs use this information to attract customer participation – true opt-in, not passive “permission” to send another newsletter.
  • As they opt-in, customers profile themselves by giving you deeper information about their personal and professional preferences.
  • You learn exactly what your customers want, what offers they’ll respond to, when and how they want to be contacted, and more.
  • This extraordinarily detailed intelligence becomes your highly-targeted, 100% proprietary database.

Step 3: Deploy Your Multichannel Mix Per Opt-In Preferences
Multichannel Success Factors: unless you obtain opt-in message and media preferences and aversions…you’ll simply be engaging in multichannel irritation!

VOC-generated customer intelligence drives the creation of highly targeted value propositions for engaging customers in a deeper level of dialogue with you. Step 3 leverages these customer requirements into action and enables you to create the integrated, multichannel programs that deliver the right product or service to the right person at the right time via the right medium…as requested by your customer.
Guided by self-profiled customer preferences, you launch integrated marketing campaigns that will achieve double-digit responses:

  • Your self-profiled database tells you exactly what to market to whom, when, and via what mix of media.
  • Your marketing becomes far more relevant and targeted.
  • Your web site becomes far more than a transactional venue for purchase — Instead it becomes a destination and point of connection with customers who’ve opted in.

I wish you the best of luck in using these proven techniques. Follow the discipline of the 3-Step Process and you will see significant increases in response.

Ernan

To read previous newsletters, click here.

To forward this to a friend, click here.

For additional case studies, click here.

 
Information to Improve Your Multichannel and Opt-In Marketing
 
 
7 Marketing Mistakes You Need to Avoid, click here.

14 Tips for Breakthrough Double-Digit Results, click here.

 
 
Direct

Microsoft Gains Insight From Small-Business Clients
By Richard H. Levey

Customer feedback yields insight, returns for Microsoft

During the early days of the Internet, Web sites urged visitors to “Make this your home page.” This tactic is still used, but not nearly as often as in the past — and with good reason. Web surfers got tired of seeing the request on every one-off site they visited.

But sometimes it's difficult for marketers to recognize that their priorities might not match customers' desires. This disconnect underscores the value of qualitative customer feedback, which provides data about how clients view marketers and the way they want to be approached.

Does it work? Well, it did when Microsoft tried to better understand small business customers.

Microsoft engaged Ernan Roman Direct Marketing of Douglas Manor, NY, to conduct one of its “voice of customer relationship research” projects. An initial round of client interviews showed that Microsoft's small business customers had a positive relationship with the company's products. But the same group said they had no relationship with the firm itself, and 60% welcomed such interaction — provided it was relevant.

Ernan Roman, the CRM consultancy's founder and principal, doesn't believe misguided communication is harmless: The cost, he said, is customer alienation and waste — and in an increasingly eco-friendly environment, paper waste is a no-no.

But wasted time isn't much better. A chief information officer once told Roman, “I don't want to be [unnamed company's] mailroom, routing its mail to the relevant person at my firm.”

So how did Microsoft's customers characterize relevant communication? Aside from requesting that any interactions with a potential small business unit be fee-free, clients wanted training and tech support. As one respondent said, “We would appreciate your help in learning how to get more out of our investment in IT. Make it easier to get answers…it's wonderful that Microsoft wants to help small businesses.”

Microsoft heard and responded. It established Small Business+, a value-added program for customers that provides training in business practices and software, free and discounted chat and phone support, personalized communication based on each member's profile, and in some cases local offerings.

Small Business+ uses a 15-question membership profile to customize Web sites and communication. Data is collected in exchange for access to program benefits. Regular e-mail newsletters, as well as separate promotional e-mail and direct mail offers, are customized to recipients.

Roman's research also helped Microsoft craft messages by revealing how members viewed offers and informational communications.

Opt-ins for Small Business+ are running between 40% and 70% depending on customer segment. Other metrics also affirm the program's effectiveness. E-mail click-through rates as high as 75% are fueled by a mix of profile-based personalization and perceived value through product-use tips. And spending by Small Business+ members significantly exceeds that of non-members — another indication that the program is delivering pertinent content.

Relevance is the effort's overarching theme. Roman's research helped Microsoft determine how marketers defined an opt-in relationship — what it constituted and the information needed to facilitate it. This allowed Microsoft to avoid asking for data that would turn potential members off to the program.

For more CRM and database marketing material, go to http://directmag.com/disciplines/crm/.

Arrow  Related Articles

 
Information to Improve Your Multichannel and Opt-In Marketing
 
 
7 Marketing Mistakes You Need to Avoid, click here.

14 Tips for Breakthrough Double-Digit Results, click here.

 

 

Click here for additional customer relationship management solutions case studies.

We wish you the best of luck in using the Voice-of-Customer-driven 3-Step Marketing Process to achieve double-digit response.

    To read previous newsletters, click here.
    For additional case studies, click here.

     
Ernan Roman Direct Marketing | 3 Melrose Lane | Douglas Manor, NY 11363 | Phone: 718.225.4151 | Fax: 718.225.4889
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