One of the greatest things about being a marketer is that everywhere you shop, you get to see and understand the effect of marketing on your purchase behavior. Let's just say you’ve made 8 purchases with this brand over 3 years. From an analytics standpoint, that's enough to be very precise in how they communicate to you and what products and offers they put in front of you. As a marketer, you know that the brand could, and should, be speaking to you in a way that's completely relevant to your existing behavior.
Unfortunately, the truth for a lot of companies is that the single customer view does not exist and the organization is resistant. The customer marketer is siloed on the CRM within the organization. There is a lack of integration between the customer-centric business unit, the product-centric business unit, and the channel-centric business unit, which is why the change needs to happen from the top down.
From the CEO standpoint, it makes sense to have an organization that looks at revenue from the view of the customer. A typical retailer sees 40% - 60% of their revenue come from their top 20% of customers. That’s a significant amount of revenue and it should be someone's job to retain and grow this segment of customers. But given the traditional P&L and the associated organizational structure, no one is responsible for this segment or revenue. No one looks at it this way. Thus, is not uncommon that the retention of the top 20% of customers is only 60% - 70% year over year. If we can move the needle from 60% retention to 61% or 62%, imagine 65%. We're talking about millions and millions of dollars in revenue. And that’s the number that will catch the CEO’s attention.
So, you finally have the attention of the C-Suite. What’s your strategy for the re-org? In our data-driven world, it really comes down to full visibility of the customer base, and the ability to analyze and act on the insights.
- Whether you choose to call it a customer database, customer data warehouse, a marketing database, or the latest hot term is customer data platform, you first need a single view of your customer. In our world, we simply call it the Customer Profile. The Customer Profile has an identity system that allows us to understand how we see our customers across all the touch points and brings that data together in one holistic view of the customer.
- You then need the ability do analytics against these profiles, but to keep the C-Suite engaged, you need to go beyond standard performance metrics and create enhanced views of business revenue and performance. This can be the enhanced version of the P&L, or the supplement to the P&L. You need to have a set of executive dashboards that provide these views - dynamic, user-friendly dashboards that are easily consumed by the executive team so they can quickly internalize and create views for their board of directors.
- The key to all of this is the targeted lifecycle marketing. When we treat everybody the same and everybody's getting the same email blast, the same catalog, every day, we're losing customer's attention. By not being focused, we're not being precise in how we move the needle on customer value. If you reorganize your organization to have “segment managers”, with the goal of moving customers along the lifecycle, that's a very focused task that can yield millions of dollars. By doing targeted lifecycle marketing, we're creating happier customers that are generating more revenue, and we're growing the customer portfolio. We're expanding the active customer base, and with greater active customer counts comes more revenue.
To execute lifecycle marketing across all channels, you will need to deliver the single view of customer to all your touch points. The customer profile should be shared with the email services platform so that you can have targeted customized emails. It should be shared with your personalization engine on your website to develop personalized web experiences. It should be shared with your in-store POS system for better clienteling. The store associate can have the ability to say, "I don't know this person so I'm going to use my introduction script" versus, "Okay, I have an existing customer, maybe a two-time buyer," versus, "I have Augie, one of our very best buyers.” Then the store associate can treat that customer differently based on the customer profile, bringing direct and digital marketing full circle back into the physical world to create a truly omnichannel experience.
Doubling back to the executive-level dashboards for a minute: There's a special dashboard called the "Portfolio Value Statement," which shows the breakdown of different customer segments; prospects, first-time buyers, repeat buyers, reactivated lapsed buyers and lapsed buyers. You can see how these different segments are trending year over year, quarter over quarter. It shows a series of snapshots that allows marketers and executives to see how the customer database is trending. Are you growing your active customers? Where are you shrinking? Marketers can start to put strategic focus on those segments that aren’t performing as well, and grow revenue in a specific, targeted way.
Lifecycle marketing and creating a Portfolio Value Statement is how an organization moves from batch-and-blast, essentially throwing spaghetti, to growing revenue in a sustainable, data-driven way. And that’s an idea that any CEO can get behind.
Augie discusses the broken customer experience and the C-Suite on CRM Radio; click here to listen to his podcasts.