Acquisition

Winning new customers is not only about how many. It is also about acquiring the right customers, the most profitable customers. Wireless phone companies, for example, have many strategies for landing new business. One is to buy information on credit-worthiness and target people with weak credit histories for prepaid wireless service, carefully targeting the right type for the particular product.

Customer acquisition is one of the most difficult strategies for increasing value. We usually have very little information on prospective customers, compared with the wealth of information we should all have by now about our existing customers ”their preferences, habits and needs. The information we rely on to acquire customers is usually summary in nature ” demographics and psychographics ”without specifics of individual behavior. In fact, the rule of thumb in many industries is that it costs as much as seven times more to acquire a new customer than it costs to sell additional products or services to an existing customer. Being relevant to the customer is critical.

Travelocity

Travelocity was born on the Web. It never sees its customers in person, and yet in many cases it knows a lot more about a customer than many brick-and-mortar businesses. Travelocity knows its customers. They know what their customers shop for, what products they purchase, how often they purchase and what their travel interests are. If a customer shops for flights to a specific destination three times within a five-day period but does not purchase, this might trigger a targeted travel offer for that destination of interest. How many other companies can or do act on a prospective customer s browsing habits? It pays off.

 

The more information we have, the deeper our understanding of prospective customers wants.

It is not only about knowing our own customers and business. To craft an appropriate, unique and effective customer relationship strategy requires that we maintain a sharp eye on new market developments. We need to anticipate our competitors. Whether we are acquiring new customers, communicating with existing customers, fighting to retain them or trying to increase wallet share, knowing what products or services competitors are offering and will be offering in the future is yet another important piece of information.

Extracting the trends in customer behavior and market developments is essential to understanding any industry.

SBC

At SBC allowable information resources are used to spot trends in three customer areas:

• Demographics. Who uses SBC s services? What is the likelihood they will buy more? What is the churn rate?

• Volume. What new products are appropriate given the current trends in volume and market direction?

• Use. What is the impact on the network? How can SBC design, engineer and provision the network for the future? What will the market want?

  The goal is not only to increase customer use but also to make the customer s experience more pleasing.

 

The more information we have, the better we can communicate with customers. And communication is, after all, the foundation of any relationship.