Acquisition, retention and development of high value customers the icing on the cake. Carry out periodic full customer reviews — structured processes designed to deep dive into a customer's satisfaction, engagement and future needs part of a world class Key Account Management KAM process.
Motor manufacturers provide high perceived value opportunities eg, trial days, factory tours to targeted new vehicle purchasers. Focus on areas of service that high transacting customers request or use most, providing streamlined processes, faster transaction times, more convenience. A B2B service company re-introduced direct mailing to high value customers replacing over-used email! Applicants who were already recognised by the airline as high value customers received a hand delivered presentation box with the new card nestling among champagne bottles and glasses.
Ensure workflows are in place to continually gather data from high value customers, store and manage it and derive actionable insight from it. Get the basics right! Whatever you do with customers, do the basics brilliantly. A soft drink manufacturer learnt from a month programme engaging confectioners, tobacconists and newsagents CTNs and researching both sales and engagement during the pilot, that high value CTNs did not shift behaviour much because they were often tied into group merchandising approaches, but the layer under this, the marzipan layer, who were more autonomous, shifted both engagement and sales significantly.
A cable TV company identified that home moving was a key reason for loss and developed a special home moving package and deployed a special contact call centre team to manage all customers who said they were moving home. Global Automotive distributor CE programme — key process Moments of Trust sic — their words identified and measured and real Magic Moments initiated.
An insurer defined its desired customer experience and then implemented policies to achieve it using LEAN principles — moved from third to second in market share in 3 years. Redefine customer experience and ensure basics are done brilliantly and that there are planned magic moments to differentiate and bring brand to life. A bank identified that customers going through divorce often left, because the bank's reaction to impending divorce was to freeze accounts rather than help both partners through financial separation.
It developed a proposition for divorcing customers and this led to improved retention. Reduce value decay groups of customers who decrease their buying amount from the company, but do not stop completely. An office supplies company selling to high value consumers and small businesses have a sophisticated order pattern analysis algorithm, which predicts behaviour and prompts a sales follow-up via the appropriate channel very soon after an order is missed.
This is seen as a value-added service by many customers! Implement customer life cycle management to prevent customers reducing value when they move on to the next stage in their life cycle eg student to young worker; house move, retirement, second office. Carry out periodic customer reviews, in structured processes designed to deep dive into customer's satisfaction, engagement and future needs. Develop future value propensity models to understand potential value in customers. Understand engagement emotional loyalty to you or competitors versus functional barriers your price, product availability, packaging, flavour and remove them.
Motor dealers introduce low cost servicing plans for older vehicles to retain relationships with second tier customer base and introduce them to the replacement cycle chain. Create more involvement and engagement mechanisms using social channels where appropriate. Motor manufacturers actively manage fleet and demonstrator vehicle cycles to maintain the flow of nearly new vehicles and hence build brand loyalty plus up-sell opportunities.
- Become a loyal customer.
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Identify low profit and bad customers eg frequent inappropriate complainers; only buy special offers and discontinue policies that allow them to stay with you unprofitably. A charity recognised that any donor, even seeming low value ones, have a high propensity to leave a legacy in their will, so they developed a legacy strategy to target existing but infrequent or low value donors. A railway company identified that many customers were complaining about trains being late in order to get compensation.
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The company matched complaints with arrival records to show that these customers were not complaining legitimately and told these customers now had the data to match complaints and arrival times. This stopped the complaints and reduced service costs. A cable TV company identified that customers who genuinely wanted to stay but were having financial difficulties were being confused with customers who had no intention of leaving but threatened to do so in order to get a discount. It greatly reduced the availability of price-based incentives to stay, instead giving customers the opportunity to reduce their total communications budget by taking additional products and services from the company.
Customers who were used to asking for discounts stopped doing so as they knew the discounts were no longer available, while customers who genuinely wanted to stay but were having financial issues now tended to stay. Introduce targeted offers re-related categories eg other customers who bought x also bought y , using prompts through all channels.
Managing Customers Profitably | Wiley Online Books
A mobile phone company used predictive modelling to get customer service operators to make targeted offers on inbound calls. Increase engagement through high involvement mechanisms such as participation and value co-creation. Using data from its loyalty card programme, a fashion retailer identified customers whose seasonal buying fluctuated seriously, indicating that they were buying summer but not winter ranges or vice versa. Product ranges were subtly modified to appeal to these people and they were targeted with incentives to visit the stores to try out the merchandise for the season, which they did not normally buy.
Increase purchase frequency number of visits, orders of existing products bought.
Using data from its loyalty programme, a retailer identified that the purchases of some cat food buyers fluctuated abnormally, indicating that they were buying the category from other retailers. An e-tailer prompts repeat purchase through highly targeted email promotions, using collaborative filtering to determine appropriate offers.
Airlines with frequent flyer programmes identify those early-stage customers who have enrolled in the lowest tier of their frequent flyer programme with profiles showing that they are likely to become very frequent flyers and offer them additional incentives to concentrate their flying with that airline. Sell bundles package of services that are better value for customer and increase overall contribution to company, and better lock-in.
A mail order retailer doubled revenues from inbound calls in 1 year by using better prompts. This is a powerful way of decreasing abandoned baskets and increasing basket size and cross-sell rates. Implement marketing optimisation on outbound campaigns propensity-driven prioritisation — integrating media, channels, messaging to reduce overlap and optimise combination.
A technology services leader segments and targets its communications at a fine level, with comprehensive outbound campaign codes and response codes to ensure it can track every interaction individually. Many suppliers now enable customers to check bills and outgoing payments on their mobiles via a web application, reducing calls on this topic.
Use social media tools to 1 develop awareness, interaction, engagement and advocacy and 2 use viral techniques to amplify messages.
How to manage big, powerful customers profitably
Many business to business suppliers segment sales-service, so high value customers receive personal key account management, second tier receive telephone-based account management, the third tier self-serve with inbound response, while the rest are passed to local dealers. Airlines demote customers through tiers of loyalty programmes eg from gold to silver to executive , reducing the cost to serve.
A bank developed a self-service proposition particularly suited to higher value, more experienced customers, resulting in higher revenue and margin and customer engagement. Banks have introduced charges on accounts to encourage customers to concentrate their banking with one bank and not leave accounts dormant when they cost the banks to maintain them without providing revenue.
Train higher value customers to use lower cost buying and service channels — their frequency of use ensures more rapid movement down the learning curve and hence lower costs of service. Sample contact centre inbound calls, complaints, emails from customers, discussions with front line colleagues to identify top reasons why customers call. Many insurance companies have identified that small chips and cracks on windscreens are ignored by most customers, leading to the windscreen eventually needing replacement. They have developed an approach of free repair to windscreens with this small damage, greatly reducing the incidence of windscreen replacement.
Various schools of academic thought are examined. The paper concludes with practical implications for managers.
The paper allows managers to consider a wide range of material in the context of their business. Findings — The need for businesses to retain customers is an important issue in today's global marketplace.
How to Sell Services More Profitably
To retain customers, a business must forge loyal and long-term relationships with profitable customers. Reasons why customers leave a company are discussed, and preventative strategies are considered. Loyalty schemes are considered and their relative merits examined.
Practical implications — A key implication of this paper is the need to focus attention on managing customer loyalty in a profitable manner. Charging ahead!
There Are No Shortcuts in Managing Customer Experience Profitably
Reputational Risk. Marketing Challenges. Happy Christmas. Londn Roadshow Newquay.
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