Communication

A communication strategy is a dialogue with the customer, not a monologue.

How we communicate with customers and prospects is their leading indicator about what kind of company we are. A communication strategy has two goals: to move a customer to where they want to be and to where we want them to be. The customer wants the best products and service possible. A company wants the most profitable customer possible. These goals are not incompatible, but to match them up requires a carefully focused communication strategy.

Marketing for the sake of marketing is not a customer relationship strategy. It is a monologue without benefit of a captive audience. It is not relationship-building if every contact with a customer is an up-sell or cross-sell. Pummeling customers with special offers is likely to result in annoyed customers. Using customer information proactively means approaching customers with what they really want and servicing their genuine needs. Creating a profitable customer relationship requires a dialogue. That means understanding the customer and only marketing the appropriate products and services to them.

There are three fundamental questions at the core of determining the appropriate communication strategy.

• Who?

• What about?

• How often?

To answer those three questions intelligently requires information from sources around the company. These could include:

• Current products or services used

• Channel of entry or initial contact

• Marketing campaigns received

• Product information requests

• Most recent browsing history

• Current and previous sales contacts

• Prior fulfillment history

• Product returns (and for what reason)

• Pending orders

• Stock and fulfillment issues on all products

• Knowing a customer s particular pain points and satisfaction triggers

  Communication and coordination among divisions and channels in a company is a prerequisite to developing and implementing an effective communication strategy with a customer.

We need to remember that communication is always marketing in some sense, but that doesn t mean it s always about a sale. Sometimes communication is about service. It s about fostering the relationship. It s still about value in the long run.

Here s just one suggestion for a profitable communication strategy. A traditional banking customer completes her first ATM transaction, a deposit. Unprompted, the bank calls to assure the customer that the transaction was successful, providing the necessary comfort level to ensure that the customer will convert to the less expensive ATM channel permanently. The customer has suddenly become far more profitable for the bank and is still satisfied with the service.

One leading bank in the United States is able, with a detailed customer tracking system, to identify the difference between a customer who is abusing overdraft privileges and one who simply doesn t realize that a check is overdrawn.

In one instance, when the bank called its customer to verify that indeed they didn t know they had insufficient funds, the customer covered the amount later the same day. The customer was able to call the person who had received the check and let them know that it could be redeposited immediately. Neither the customer nor the recipient of the check was charged any penalty. The recipient was impressed enough to become a new bank customer. They, too, wanted the personal service and attention to detail that the bank was able to offer.

This top bank not only has the infrastructure needed to put the right information in the right hands. It trained its people to act on that information ”one important reason why it s an industry leader.

The airline industry often provides examples of miscommunication resulting in inferior service. We ve all become familiar with the litany of excuses for airline delays. What is most frustrating to customers is not the delay itself but the array of excuses often offered for the same delay. The gate staff says it s a parts problem. The counter staff says it s a plane that hasn t arrived. The pilot, once the customer gets on the plane, says it was a delay to wait for connecting passengers. What s going on? Do they simply not know the real reason? Is the beleaguered staff just trying to get irate customers off its back? In most cases it is probably a combination.

Information silos and unconnected systems mean that pockets of knowledge will develop over time, but the whole story is rarely available to everyone at the same time.

Airlines are getting smarter . They know that customers value a straight answer and reward it with loyalty. Look at what Delta Air Lines is doing with that knowledge.

Delta Air Lines

In the 11 largest airports where Delta Air Lines operates, it has installed eye-catching new flat plasma displays, known as the Gate Information Display System (GIDS) screens. These screens answer the 20 questions most frequently asked by customers. For example:

• Flight status, departure and arrival times, mileage between cities

• Destination weather and a four-day forecast

• Aircraft seating configuration

• Waiting lists for standby and upgrade passengers

• Connection information

• Boarding status, listing what rows are currently boarding

• Meal service in each cabin

• Delay, cancellation and gate change information

  Delta s customers feel more respected. The company has a unified view of all the information it holds. This single version of the truth is on display for everyone to see ”where it counts most.

 

Marketing Smart

The bulk of communication between companies and customers though is marketing for the purposes of making a specific sale. The goal of sales marketing is higher response or take rates and lower costs, and we shouldn t forget the often-ignored statistic, lower hostility rates. Targeting more effectively is essential, and information is the fundamental ingredient in an effective strategy.

Actionable Information + Targeted Marketing Communication
= Higher Take Rates + Lower Costs + Lower Hostility Rates
= Increased Value

There really is no junk mail. There is only misdirected marketing. In the United States, companies spend in aggregate approximately $1,800 per person, per year, on marketing campaigns. Most of those dollars are spent on marketing developed using basic analytical tools, insufficient information and barely targeted mailing, e-mail and telemarketing lists. The volume of direct mail and e-mail a typical person gets each day is a classic example of grossly misdirected marketing ”catalogues the recipient will never order from, offers for seminars , credit cards and magazines they will never respond to, discount coupons for products they will never purchase.

We need to be relevant to the customer when we service them and when we sell to them. And, despite our earlier cautions , an educated , targeted cross-sell can play an important role in building the customer relationship.

Here s how different companies are marketing smart.

Sears

Sears has 120 million customers and some of the richest information resources at its disposal. Sears knows, for example, that nearly 40 percent of all major appliance purchases in the United States are made at Sears. The company knows details about those purchasers like life stage, income and home ownership. How does it use the information?

Sears recently acquired Land s End. One current initiative leverages the strong similarities between the profile of the appliance shopper, painstakingly developed over years of business, and the profile of the Land s End shopper. Targeted mailings and in-store promotions are calculated to inform customers of the new line of Land s End clothing in Sears stores. Sears is strategically serving its customers better.

 

Sears knows that direct mail can be a powerful marketing tool, when used well. Of course the publishing industry has long been a source of innovation in the direct mail field.

Meredith Corporation

Meredith Corporation is a leading U.S. media company, focusing on magazine and book publishing. Their leading magazine brands include Better Homes and Gardens and Ladies Home Journal . With information on over 70 million consumers, Meredith considers its information resources to be one of their key corporate assets and getting the highest value from the asset is a top priority. Meredith s marketing mantra is to be there when they want us and not when they don t. To do that successfully, Meredith has to have a consistent, accurate view of each of those 70 million people. That s Meredith s goal.

Subscriber acquisition, reduced marketing costs, increased wallet share and improved revenue from list rentals are the bottom-line benefits Meredith hopes to achieve with this single view. On each of those fronts, what will better information enable?

Subscriber acquisition

• Better targeted list pulls and faster turnaround time on list pulls

• Improved subscription and renewal rates via the online channel

  Reduced marketing costs

• Lowered cost of outsourcing consumer database and generating marketing lists

• Faster time to develop higher quality targeted candidate acquisition lists

• Use of Web to drive renewals

  Increased wallet share

• A holistic view of consumers, channels and products

• Personalization on the Web

• Using the Web to cross-sell and up-sell

  Improved revenue from list rentals

• Better targeted rental list pulls

• Identification of new subscribers and recency factor leverage

  While there is still much value to be mined from its information resources, Meredith already does some of the most sophisticated and effective direct marketing in the publishing business, a business that traditionally relies heavily on direct marketing to acquire customers.

  Meredith has, for example, moved aggressively into the online channel, something many brick-and-mortar companies have not been able to do successfully. The company often tests marketing campaigns online before sending out the same campaign by mail. In Meredith s experience the conversion rates from e-mail and mail campaigns are often quite similar and the e-mail campaign is an accurate bellwether for mail campaign plans.

  Marketing that better understands who each customer is will be more successful. Meredith is putting their information resources to work for their bottom line.

 

We re seeing it over and over again: information unlocks the potential of relationships. The companies who delve into their information can create more intimate relationships.

Travelocity

Travelocity identifies unique customer records on their data warehouse. If a customer has multiple accounts with Travelocity, information is combined to create a single view of the customer. For example, if a customer has a business, personal and family account, Travelocity will link the accounts using a combination of data elements, including customer name , address, e-mail address and consumer link. Travelocity s focus is on having a comprehensive understanding of their customers in order to provide the most relevant communications possible, thereby driving value and strong customer relationships.

 

Like online companies, catalogue companies must personalize their relationship with the customer at a distance.

Senshukai Co.

Senshukai Co. is a leading catalogue house in Japan, specializing in mail order service, shopping-center style. With over 7 million customers and 22 different catalogues, getting the right catalogue to the right customer at the right time is essential. Increasing customer responsiveness is the bottom-line goal. Understanding its customers is the core of Senshukai s business model.

The company knows, for example, that women living in cities tend to purchase daily necessities and miscellaneous goods from catalogues, whereas women living in rural areas have a greater tendency to buy fashion goods and clothing. Based on the wealth of information the company has collected on its customers, Senshukai is able to target its mailings, taking into account a host of individual characteristics of each customer, including lifestyle, life stage, location, profession and history of shopping.