By Steve Denby, CEO at JaywingDMG.
In boom times, many companies think only of pulling in revenues without worrying too much about costs, focusing on volumes rather than the individual value of each customer they are acquiring.
But when a recession hits, and every cost is under the microscope, brands have no alternative but to reassess the quality of the prospects being acquired.
Data and analytics can build a powerful view of the value of each customer, and provide crucial insight into when, how and even if brands should interact with them.
Here are five simple rules to help you understand and unlock value from your customers:
1. Develop measures to define value
Value management starts with the development of a dynamic model. The model may be crude to begin with but it must combine risk, cost, revenue and attrition to derive a 'value' for each customer.
2. Selective investment
A value model gives you a powerful view of your customers and prospects. You can invest time and budgets more intelligently in customers and prospects with a genuine appetite for your products and services. Take account of risks and revenue potential and focus on those prospects and customers with the greatest long term value.
3. The hard work starts once they are onboard
If you have acquired new customers through price or other incentives then they will tend to be naturally promiscuous; the hard work really starts by building a relationship with them, to maintain their loyalty and extract their predicted value.
4. Don't overstep the mark
A high value customer (with the potential to buy more) with low servicing needs may find themselves excessively communicated to, which may damage the relationship if it is not managed effectively (i.e. lots of 'push' marketing leading to the destruction of brand value and ultimately attrition).
For this particular type of customer, a more refined approach to marketing that focuses on inbound opportunities as a sales forum will be more effective.
5. Refine performance measures
Focus on developing relationships via the use of inbound call centres. Incentivise them on customer satisfaction, customer data collection and not just average call time and sales per advisor. And don't forget to equip them with the right skills through training.
Customers aren't stupid and marketers are in a better position than ever to understand them - all it takes is integrated data, great analytics and some respect for the people you want to sell to.
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