Types of messaging in digital marketing strategy, there are many forms that messages within your contact strategy can take and these should be appropriate to your proposition, business, industry and consumer. Given below are some examples of types of communications that can form a contact strategy:
Warm-up
Warm-up e-mails can be anything from an introduction to a series of compelling content such as ‘How To’ guides to a preview of an upcoming product or series. These e-mails, similarly to teaser campaigns, can give the customer a sense of anticipation and this will in turn heighten their appetite for your next communication, which strengthens your overall contact strategy. A communication that is expected is far more likely to be opened, read and interacted with than one that is unexpected.
Example
‘Your series of guides on how to get the most from your new drum kit will be starting next week. Get a sneak peak of lesson one by clicking here.’
Follow-up
The follow-up communication is effectively the opposite of the warm-up. These can be very common in B2B contact strategies. Where the customer has received a phone call or e-mail on a specific subject, following it up after a short period of time can be crucial to closing a sale or capturing the purchase moment. The crucial detail here is the timing. If your initial contact has sparked an interest for the customer but they need to do their own independent research or review their finances, for example, then contacting them too early can be a significant irritation. Contacting them too late, however, may result in a missed opportunity as their online activity can be seen and acted upon by a competitor.
Example
‘Thank you Jane for popping in to see us last week about getting a new laptop. If you need more information to help you decide we have these great guides and a help centre to answer your questions. If you need to chat to anyone you can call us any time on XXX XXXX XXX.’
Surprise and delight
This form of communication is value in its purest form. The purpose of a surprise and delight message is to do exactly as it says. There is no sales message here, no data capture and no directly commercial element. A voucher for money off your products would not be strong enough as they would still need to purchase your products to get this offer. A surprise and delight message is something that gives some value to your customer that they will love at no expense to them. You may, for example, offer your customers a gift on their birthday, just for being customers. This is one of the rare opportunities when something that appears too good to be true is actually true. It does of course create a good feeling about your customer service and brand that increases retention rates. It may also increase wordof-mouth advertising and result in positive discussions in public forums and even PR – so the advantages are clear.
Example
‘Happy birthday Michael. You think that just because we’re a company we don’t care? Of course, we do. We know you love buying your food with us so to prove how much we love having you as a customer here’s a bottle of wine to enjoy with your dinner. Have a great day!’
Reward
This is similar to surprise and delight in that you are rewarding your customers, but this time it is clear that you are rewarding them for a specific behaviour. This may be a gift or some valuable information that is hard to find, and it would be in exchange for buying a product or reaching a certain milestone as a customer.
Example
‘Hi Juan Carlos. We just wanted to say thank you for taking the time to complete our survey last month. These results really help us to improve our service, so next time you come to see us you can use this token to get 50 per cent off whatever you buy up to £100. We look forward to seeing you again soon.’
Win-back
This is actually an acquisition message rather than CRM as the customer has left and you are trying to win them back. It does, however, have a blurred line with CRM as you have data on this individual and so can talk to them in a tailored fashion. You have knowledge of their behaviours and can therefore engage them in a contact strategy to bring them back to the business.
Example
‘Dear Maggie. We’re very sorry to see you go. It wasn’t you it was us. We messed up and we’re really sorry. You might not be able to forget our mistakes but we hope you can forgive us. If you’re willing to give us another chance one day then we hope this voucher for 25 per cent off will help.’
There are many more forms of communication and it is a valuable exercise to think about the different forms of communication that can fill your contact strategy.
Cross-selling and up-selling
Cross-selling and up-selling are two common forms of maximizing revenue from your customers and they continue to play an important part in many business strategies.
Cross-selling is where you encourage your customers to purchase another one of your products. If, for example, you are a retailer and a customer has recently bought a winter coat, perhaps you could encourage them to buy some matching gloves or a scarf that complements the look. This shows an understanding of the underlying need of the customer and presents an opportunity for revenue.
Up-selling is the method of encouraging a customer to upgrade their product to the next level. This may, for example, be a customer who has recently purchased a ‘Bronze Level’ cover from your motor breakdown company and you notice that they have historically had numerous issues with their car at home, which is only covered on the ‘Silver Level’ cover. Explaining this to the customer method has expanded to ‘Customers who search for C also bought D’ and other similar methods. These are then presented to you when shopping, after purchasing, in e-mails and even on live tiles of apps. This gives the customer a true sense that Amazon knows them and can suggest items to customers that they themselves did not realize they wanted or even knew existed.
This method is one of many reasons that Amazon has become the global phenomenon that it has, and it is a model now imitated by many major digital retailers. It does, however, have its drawbacks if not executed correctly. Should the suggestion algorithm not be perfect then the suggestions can actually present a message that this is a machine that does not know me at all. Or, should customers change their behaviours temporarily due to an event in their life, they may suddenly be recommended a number of irrelevant products.
Amazon, however, have made a great success of this and continue to innovate and focus on the customer – two great methods of delivering success.
Cross-selling and up-selling, including the Amazon method, are ultimately reliant on what is known as collaborative filtering, which is a method of predictive analytics. With CRM and retention strategies, predictive analytics can be very powerful. We look at these below.
Predictive analytics
One of the vital areas of information for CRM and retention strategies is predictive analytics. Whilst retention is a reactive process, being able to predict behaviours and therefore anticipate customers leaving is very powerful. Also being able to understand customer behaviour and therefore make advance decisions is equally effective. In this section we look at two predictive analytics models that are relevant to retention strategies: propensity models and collaborative filtering.
Propensity models
Propensity models are probably the most commonly known form of predictive analytics as they are commonly used in businesses to predict future customer behaviour based on known information. Propensity modelling can be used for many purposes, including predicting engagement and conversion, but we are most interested here in its use for retention. and trying to up-sell this product is both of value to the customer and to the company and so is a relevant up-sell opportunity.
By understanding which customers leave and then the behaviours they commonly exhibit before they leave we are able to see a potential issue before it happens. We can then introduce a specific contact strategy to softly warm this person back to our product or brand and therefore decrease churn and increase retention.
One specific form of this for retention purposes is ‘next best action’. This is where a propensity model is used to assess the next conversation to have with the consumer. It is used in numerous scenarios such as up-selling, converting and saving customers. If a customer is looking to leave then your website (or customer service representative) may have a series of choices that can be made about how to save them. They could be offered a discount or even free products or services. The propensity model is designed to try the next action necessary to save this profile or individual – not jumping straight to the expensive option, which may be unnecessary.
Collaborative filtering
As mentioned above, many businesses now use recommendations to encourage customers to purchase other products from them – something that was pioneered by Amazon. This method is called collaborative filtering. The reason for this name is simple. Recommendations are being made by using filtered data from many users, or a collaboration of users.
By using the data of many people’s behaviours we can effectively segment behaviours into many buckets and therefore many tailored recommendations from the outputs. As well as continuing to be used by Amazon it is also used by many other businesses in a wide range of industries, such as Netflix’s movie recommendations based on social connectivity and Apple’s genius recommendations.
CRM systems
There are many CRM systems on the market today and they continue to improve and become more sophisticated. Many, however, are not used to their full potential. In 2003, a report by the global IT research and advisory company Gartner estimated that 41.9 per cent of CRM software goes undeployed (Gartner, 2003) whilst the same company’s 2013 report showed that over 20 billion US dollars are spent on CRM software worldwide (Gartner, 2014). The software itself remains an important part of the overall strategy, but implementing it and using it correctly are equally important. The features that you should expect from your CRM software are as follows, although the importance of each will depend on the priorities of your strategy:
● Customer support automation: the function that allows users to centralize, manage and automate customer support. This can include capturing e-mail and web interactions, sharing a knowledge base and self-service portals.
● Marketing automation: this includes creation and managing marketing campaigns in an automated fashion, therefore retaining consistency and reducing resource requirements.
● Reporting: a report on all of the activity that is managed through the CRM system, including marketing, sales and service.
● Sales force automation: primarily but not solely for the B2B user, this feature manages sales funnels, contract management, lead scoring, sales forecasting and much more.
● Contact centre support: some systems also combine CRM functionality with specific contact centre features such as interactive voice response (IVR) menus, missed call management and skill-based routing to enable the systems to be fully integrated with call-centre environments.
Other features such as workflow management, e-mail integration, data management and inventory management may also be useful for your specific needs and should be considered.
There are many systems available on the market today such as Salesforce. com, Microsoft Dynamics, Oracle, SAP, Zoho, SugarCRM, Sage and many more. These are not recommendations and you should conduct your own procurement exercise to fully understand your needs alongside the propositions of the potential suppliers available.
Social CRM (SCRM)
One area of CRM strategy that is more recent is social CRM (SCRM). This is the use of social media services and techniques to engage with your customers in a similar fashion to traditional CRM.
We look at these again later in the book but it is worth quickly highlighting the relevance they have to our CRM and retention efforts. There are two areas of social media that should be reviewed specifically in relation to this and they are:
1) social customer service;
2) sentiment analysis.
Social customer service
We look at the social media side of effective customer service and how to best manage customers through the channel. It should, however, be noted that social media is not a one-way form of communication. Customers are increasingly contacting organizations directly through their social media channels to ask questions and to complain. Ensuring that plans are in place to deal with these communications is vital.
Sentiment analysis
This is the method of measuring feeling about our brand through monitoring conversations that are taking place across the social networks. By understanding these conversations, we can understand or even pre-empt the behaviors of our customers and therefore improve retention and customer satisfaction. We can even take some of the comments and, with the customer’s permission, feed them directly into our messaging to show that we are listening and taking action.
There is a risk, however, with SCRM as it can be very easy to make mistakes in this arena and, ultimately, damage your brand if not managed well. For example, Gartner made the eye-opening prediction that: ‘By 2010, more than half of companies that have established an online community will fail to manage it as an agent of change, ultimately eroding customer value. Rushing into social computing initiatives without clearly defined benefits for both the company and the customer will be the biggest cause of failure’ (Gartner, 2009).
Loyalty
Finally, in this we look at loyalty. Much of what we have discussed in this is about encouraging loyalty, but loyalty itself is a specific area of CRM that needs to be looked at independently.
The ladder of loyalty
The ladder of loyalty is a model often referred to within marketing as it shows the five stages that a consumer steps through to become loyal to a brand (Figure 10.4). They are:
1.Suspect:
no relationship with the brand; no reason to suggest they would or would not buy from you.
2. Prospect:
shown some indication of interest such as visit, free subscription or enquiry.
3. Customer:
has purchased from you and so has a basic relationship with your business.
4. Client:
has developed a deeper relationship with you through repeat purchases but not necessarily a fan of your business.
5. Advocate:
is showing signs of recommending you and is highly unlikely to stop shopping with you unless something drastic happens.
Other steps can be added to the ladder such as members, evangelists, shoppers. There are many interpretations that you can apply to your individual business, but the above list covers the core stages.
In order to guide the consumer up this ladder you will need to be successful in all areas of your strategy, from targeted acquisition and personalized content strategy through to social CRM and analytics.
Loyalty programmes
Loyalty programmes remain a strong method of forcing loyalty. Where advocacy and brand loyalty may sway a consumer towards choosing to visit one website over another from the search engine results, a loyalty programme can ensure that the consumer does not search at all but goes directly to the website. Loyalty can be a powerful thing: I myself spent many hours as a child being forced to travel around the roads of England, running desperately low on fuel, so that my father could find the right brand of petrol station to get his loyalty points from. There have been many highly successful loyalty programmes in the last 20 years such as Tesco, Nectar, Walgreen’s, Canadian Tire, Flybuys, Boots, Payback and many more. These can be referred to as loyalty, reward, club, discount or points cards. Ultimately, they all have the same purpose – to offer the consumer a high perceived value from regularly shopping at one brand and in turn to receive higher average sales and revenue per customer. The key here is the term ‘perceived’ value. This can be the ultimate decision as to whether a loyalty programme works or fails.
High-value loyalty
This type of programme offers items, services or discounts to the customer that are of a high value. This can lead to a significant increase in average sales per customer and retention rates but it can be costly to offer these rewards, especially as many of your customers would probably have shopped with your store anyway. That factor, combined with the cost of promoting and running the scheme, has in the past resulted in criticism for loyalty schemes.
High perceived-value loyalty
This type of programme is focused more on making the customer think that the items are of value whereas they may actually cost the company very little. This means that the cost of running the programme can be kept low and the customers will still show increased shopping behaviours. It can, however, result in criticism for not offering enough value to the customer. An example of this is buying a product in bulk and then adding it to your product for free or for a small increase in price. This could be a voucher or a service such as insurance.
The key to success is to ensure that the customer is offered some real value but not at the expense of the financial rewards of the scheme. This can take some significant adjustment of the programme over time and it is therefore wise to be as flexible with your loyalty scheme as possible at launch, and to build up the scheme slowly.