The future of Data Management

Editor's Notes

1. Presented by: Thom Poole MSc, DipM, FCIM, MCMI, Chartered Marketer Quick Biog Web & digital marketing trailblazer since 1992 Taught digital marketing for 9 years e-Commerce Web design for marketers (and the terrified!) CRM Written papers on ‘Data Privacy’, ‘The Marketing Art of the Opt-in’ and ‘Trust in Business and Marketing’ Written a book on ‘ethical e-marketing’ called ‘Play It By Trust’ Held senior marketing positions at O2, Black & Decker and Hilti Fellow of the Chartered Institute of Marketing & holder of an Individual Charter Standard in Marketing Committee member in the West Surrey branch and the South East Region of the CIM (former Chairman of West Surrey branch) Member of the Marketing Society, Strategic Planning Society and Chartered Management Institute Consultant & business mentor for digital marketing strategy and implementation
2. When a sales manager said - ‘People buy from their friends - so be a friend’, I thought - no-one is going befriend a cut-throat sales representative! In essence, what they are saying is that if you’re a seen as friendly and approachable, you will build trust. But you also need to target your customers carefully, and let them know who you are. What is it that makes your customers tick? Can you exploit that knowledge of your customers? Are you developing products and services that are of use to the customer profile? The famous advert, I think, sums it all up - “So, what was it you wanted to sell me?”
3. A year later that business owner is wondering what happened to that customer and where they went. Why haven't they hear from them? Did they leave? If so, why? When you consider that the last two make up the majority of why a client or customer will no longer use your service or buy your products - it can be a hard pill to swallow. After all it means they are an inactive client because they felt you didn't care about them and your competitor did. This makes sense when you consider that customers often purchase your service or product because they have developed a relationship with you, they owned another product or yours, or they were referred to you by a friend or associate. When faced with the above facts why is it businesses spend 80% of their marketing dollars going after new customers and clients rather than nurturing, retaining, and maintaining the customer relationships they already have?
4. As you can see your marketing dollars will go further if you use it to build, nurture, and develop your customer relationships. This isn't as difficult as you think. Building these relationships just means treating your customers and clients as if they
truly are your strategic partners and showing them that you truly care about them. It's important to try to satisfy them with the right products and services, supported by the right promotion and making it available at the right time and location. Customers can easily detect indifference and insincerity and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must strive for every day and with every transaction no matter how big or small. While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and retain their customer base ultimately fail. You will also spend twice as much to get new clients as you will in maintaining your existing customer base.You will also be limited in your ability to attract new clients if you can't hold onto and satisfy your existing customers and clients. The bottom line is that one of the key components in marketing and business growth is to spend the majority of your time and effort nurturing customer relationships, so that you get business from existing clients and customers. This is a strategy that will move you forward in increasing your sales by 50% without increasing your budget. It costs 7-10x as much to get a new customer as to keep an old one
5. When I was a salesman, my boss told me that people bought products or services from their ‘friends’. I have yet to meet a salesman that I could call a friend – not whilst they were trying to get my money, anyway! Trust is the basis for building loyalty which in turn will increase interaction – it is up to you to turn this interaction into profit. As a personal example – I am an Apple McIntosh user at home, but have to suffer PC’s at work. Think about the customer loyalty Apple has – most Apple users can be identified by two main attributes – they are fiercely loyal to the brand, and they are poor, because the loyalty costs so much! I have used Michael Porter’s value chain model to demonstrate the trust-focused value chain, culminating in ‘trust’ in a brand, product or service. It is no fluke that trust occupies the same space that ‘profit’ does in Porter’s model, indeed I could have extended it with another field to the right called profit. Being trustworthy is profitable.
6. The normal trust lifecycle curve shows that a customer will start in an untrusting state - they are unaware of the brand’s reputation. During the transaction, the customer will build a view of the company, trusting the relationship as they go. Over time, and [hopefully] with repeat transactions, this trust will be confirmed, and then maintained. Advocates, as we highlighted before, will reduce the time required to build trust, because if you trust the advocate who recommended the company to you, you will adopt some of that trust.
7. Or Propensity Scoring
8. But much of it is devoid of reality. The fantasy of the modern Harley is what drives the market.
9. So how do you segment? First step is to identify your customers This example comes from the British mobile phone company - O2 -where they developed five main segments - Ambitious Techies, Budgeters, Professional Functionals, Status Seekers and Young Socials. From that, mood boards were developed - this for the Ambitious Techies, and then a more complex evaluation and ROI estimator board.