In today’s customer-centric consumer environment,
the name of the game is customer retention.
But what data must be measured to get it right?
Old marketing models have been turned on their head as businesses realise the customer has all the power in today’s market. Companies that are able to retain customers are often companies that succeed.
“There is no doubt at all that customers have more power in almost every respect,” says Dicken Doe, managing director of Beyond Analysis Australia, a specialist analytical consulting firm for customer data. “They have more buying power and they have many different ways of spending their money. They are very happy to choose.
“People receive many different messages through numerous channels. To be able to cut-through that, you’ve got to be very relevant to those people, so in marketing terms you can’t rely on what you did previously. You have to understand the customers, understand the different communication channels and understand how to be involved in them.”
How to measure for customer retention
“Our mantra is ‘You get what you measure’,” says Doe. “For instance, one client had spent years failing to convince his company to invest in targeted marketing. However, customers usually commit to long-term programs once we show them the upside. This ability to understand what people are doing with your communications and, therefore, what they might need from you, is vital. It’s also not so difficult.”
Doe adds that business managers are often quite excited by their ability to communicate in today’s networked markets but are less interested in measuring the results of that communication. And without measurement, he says, it’s impossible to prove the success of any campaign or to learn from and improve on the results.
Begin by collecting customer data, advises Doe. It may seem terribly obvious, but in order for data to be collected, specific systems must be put in place.
Collecting key measurable data
- Collect email and mobile phone details: this becomes the basis of “customer account” information.
- What sorts of items go into a purchase? Do they only buy hooks each time they shop or do they also buy bait and fishing line?
- Do they only buy at discount? This shows whether discounts are wanted or expected, or whether you’re simply a supplier of their usual needs.
- Purchasing intervals or times between each purchase: if customers shop with you every four weeks, how can you alter your marketing to make this every two weeks?
- How long ago did they last shop? It’s easy to bring somebody back if they have not shopped with you for two or three weeks, but if they’ve been gone for 10 weeks then it’s far more difficult.
- Target your marketing dollars before you lose them.
“In collecting this information, you can build up a very clear picture of your customers’ purchasing behaviours and drivers,” says Doe. “Collecting is the key and then you need to focus on analysis. This data is then used to plan specific and targeted campaigns that achieve certain goals, the most important being customer retention.”
The views expressed in this article are those of the author and the interviewees, and not of Australia Post.
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