Let the bad times roll?

22 May 09 - Arthur Einstein

Chrysler’s in bankruptcy.  GM may be next.  The silver linings on the cloudy horizon are pretty faint right now.  And, yet … I’m not ready to give up the ghost and I doubt that you are either.

The question is, what to do?   Sit around and wait for things to change?  Or take some action that will give destiny a nudge in the right direction?  

Personally, I’ve always believed the philosopher who said “the only reality is in action”.  And one action I believe everyone needs to consider in tough times is how marketing dollars are being spent.

Right now all the experts are advising us to focus on our customers.  (That’s always been our business at Loyalty Builders).  Customers are the core strength of any business and an even more important asset in a slow-down.  The programs that support customers, keep them happy, and keep them coming back to buy, are critical.  
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Marketing to your best customers when business stinks

01 Feb 09 - Arthur Einstein

It’s the oldest cliché in business - recession is a time of opportunity.  But a raft of research confirms it's true.  People who market aggressively in downturns not only survive but consistently emerge stronger.  As Casey Stengel would say if he were alive today, “you could Google it”.

The most aggressive approach to  bad times is to figure out who your best customers are and market to them relentlessly. Analyze your customers based on transaction data  that’s sitting in sales or accounting databases.  It’s going to tell you things about your best customers you never realized.

But beware.  Best customers are not just the 5% or 10% who generate the most revenue.  In fact, customers who spend the most may already be spending all they can with you.

The wonderful thing about segmentation is that when you look at it carefully you’ll realize that you have at least three kinds of best customers:

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When the going gets tough

12 Dec 08 - Mark Klein

We all know these are tough economic times. That message was reinforced for me again yesterday when I got a call out of the blue from a marketing analyst at a company not on my radar screen. She was charged by her VP with setting marketing priorities for next year. Specifically, she was asked to make marketing recommendations to help her company survive during this recession. The analyst was casting a broad net and found me.

After a short discussion, I found that her company’s revenues were excessively skewed more to new customer revenue compared to revenue from existing customers, so a sure answer to her question is to ramp up existing customer marketing. The justification for that effort is clear: you know who the customers are, you can figure out what they are likely to buy next, and making that sale is a lot less costly than acquiring a new customer. There is definitely gold in your transaction data.
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Target first time buyers to build your brand

03 Nov 08 - Arthur Einstein

Back around 1999, when new products were being introduced as fast as you could put up a website, brand building underwent a quiet revolution.

With markets moving at warp speed there simply wasn’t time to build trust and reputation the traditional way - by advertising.  In that super-heated environment the best way to build a brand was to get people to actually try the product.  If you could manage to get trial, if the dogs ate the dog food, if they came back to buy again, and if they told their friends, then maybe you had a shot at survival.

The markets haven’t cooled.  If anything they’ve heated up.  And I still believe that persuading a prospect to try your product or service can create more brand equity faster than all the 30-second Super Bowl spots you can afford.  Generating trial is still the best branding strategy I can think of.  
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Retention is the new acquisition

28 Sep 08 - Mark Klein

From here, it looks like the tide is turning.

When you fish the tidal estuaries of our New Hampshire coast, you quickly learn that fish bite when the tide is flowing. Many days I’ve sat in a boat at slack tide, waiting for the current to reverse, the tide to run, and the fish to bite. You watch for those first signs of the water moving, like a leaf or twig and then seaweed beginning to move past your boat. Right now, I am seeing indications that the tide in marketing is changing.

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Are your marketing ratios out of whack?

26 Jun 08 - Mark Klein

In the past month I’ve been to two trade shows for direct marketers, ACCM in Orlando and DM Days in New York. I walked the aisles of the exhibit halls at these shows and was continually struck by how many of the exhibitors were on the customer acquisition side of the street. But the exhibitors were only following the money; they were selling what their customers wanted to buy. And it seems to me that companies spend much more on customer acquisition than on marketing to existing customers.

I think a good marketing program flows like a good golf swing. One measure of a golf swing is how well a golfer is able to maintain balance throughout the swing. Does he or she start in balance, stay in balance during the swing, and finish still in balance? Or is there a lot of lunging this way and that, and a result to match? Good marketing requires a balance between where your revenue comes from and where you spend your marketing dollars.
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What's up with your customers?

04 Jun 08 - Arthur Einstein

ATT Wireless has been airing a TV commercial that’s simply joyous. It’s a bunch of happy mobile customers doing their thing –strolling along, walking the dog, calling friends and saying ‘Hi’, ‘Howdy’ Whatcha doin’? ‘What’s up?’

I think of it as a Web 2.0, ‘next generation’ spot. Totally social. And ATT’s message is unmistakable: “staying in touch is good for relationships and you don’t need to log on to Facebook to do it, friend – just use that wonderful little gadget in you pocket and stay wired to your friends”.

As a customer relationship wonk I’ve been thinking about this campaign and wondering why more companies don’t apply this kind of thinking to their business relationships. Instead, when customers hear from their suppliers they expect a sales pitch – and that’s what they get. Accountability has become king, and the king says maximize the revenue of every marketing dollar. And do it now!

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