Alternative marketing thinking

1 to 1 magazine has some sobering news for practioners of loyalty programs. That in an era of high prices, there’s very little that a customer cares about a brand that he or she loves. From 1 to 1 magazine.

In its study, The ‘Wallet-Share’ War: Measuring Customer Value and Profitability, Aberdeen surveyed 280 companies across industries to understand how they approach customer profitability. The findings, unsurprisingly, say that best-in-class companies share the use of analytical and precision marketing tools to measure and increase customer value and profitability. While no “magic bullet” emerged as a way to manage customer value effectively, the study identifies four measurements that when analyzed together show a useful customer picture: customer retention rates, customer turnover/churn, return on marketing investment (ROMI), and customer acquisition costs. More than 7 out of 10 have implemented or are planning to implement solutions to identify and segment high-value customers. This includes customer dashboards, real-time analytics, and both descriptive and predictive statistical modeling. The study mentions Australia Post as an example of a company leveraging customer value metrics. It uses both financial (revenue) and non-financial criteria (mail volume, length of contract, cross-product purchases) to profile and group its top customers. With this insight, the organization offers flexible pricing and personalized messages to its best customers. Senior managers are responsible for the customer experience and customer profitability remains a top executive priority. Read more from 1 to 1 magazine.

One of the things about a design job is that the entire process is driven by gut feel and individual opinion. So when Well Fargo Bank decided to redesign their website, they relied on gut, right? Wrong! The new site has been driven by inputs the bank got from analytics. And the results are already there to see, a spectacular, 50% increase in online applications! The team behind the site redesign collated the 100 most-popular search terms to determine what customers most wanted to find out and couldn’t. Topping the list were mortgage rates, security information, and ATM/branch locations – which subsequently were handed premium positions on the new home page. The experts like what they see on the Well Fargo site. Forrester’s Brad StrothKamp “The Wells Fargo home page is a best practice for financial services, and a blueprint for how eBusiness managers should use metrics to develop more effective Web sites.” Some more from Finextra.

When you are one of the world’s most successful financial institutions you don’t want to be caught resting on your laurels. Fidelity Brokerage Company has some $1,770,000,000,000 in assets under administration. So how do you take a widely successful company to the next level? According to Fidelity’s Bill Doyle and Ellyn McColgan, the company is moving beyond customer satisfaction to customer success. What is customer success? Not being satisfied with how well you did yesterday and looking in the opposite direction: Thinking about how an individual can reach a goal. For the company, success is not only a number but also a series of choices and they intend to help customers make the next best choice at each step along the way. Most consumers, Fidelity feel are setting goals with four big factors in mind like buying a house, educating children, planning for retirement, and taking care of elderly parents. Starting with investors and offering products to help them make next best decisions on the way, means customer success, both for the individual and the company. More from Forrester. Also, don’t miss out this snippet on how Banks are facing customer service wars.

Is it possible that a business that calls itself a discount brokerage house is setting trends in customer service? Scottrade, a financial services company that got its start some 20 years ago, is built around the notion that customer strategy is paramount. And its 1.7 million customers are enjoying the benefits of this strategy. Scottrade does not have a customer service department. All of its 1,700 employees are customer service representatives. There is no IVR system for customer calls. Every call to the 800 number gets routed to the local branch nearest to the caller and branch employees handle the calls themselves. So how has all this been working for Scottrade? A large part of its business comes from customer referrals. During the past 12 months, Scottrade’s customer assets grew by $4.7 billion to $55.7 billion; active customer accounts grew 12 percent to 1.66 million from 1.48 million; and revenue grew by 70 percent to $789 million. And in 2006, the company was recognised by BrandWeek magazine for leading the investment industry in customer loyalty. Read more from Informationweek Magazine. Also of interest: Forrester Rants on Customer Service.

New York Times recently ran a story on its front pages on the wicked ways of database marketers. One of a series of investigative pieces that looks at the problems faced by a growing number of older people in the US, The Times worked undercover to expose the devious ways database companies segregate and manage data about people. The story detailed how InfoUSA customer data was twisted into customer segments such as “Elderly Opportunity Seekers,” “Suffering Seniors,” or “Oldies But Goodies.” InfoUSA has posted a rebuttal on their site that claims that the article is based on files that are part of a case that was investigated and closed three years ago.

If you think banking customers hate being sold new products and services, think again. A global survey by Genesys Telecom Lab across a base of some 4500 customers showed that an overwhelming 95% of them are open to listening to relevant offers. What’s more, some 89% of the respondents wanted companies to talk to them proactively about new products and services. Rather than restrict these calls as sales calls, some 85% said they would have a more positive opinion of a company they buy from after receiving a courtesy call from that firm. Read more in this synopsis of the survey from 1to1 marketing.

1 to 1 magazine’s yearly Customer Champions issue is out on the web and a few banks have managed to make it in. Wacovia being the biggest of them in the list. Like most banks, 1 to 1 says Wicovia sees its customers purely as numbers. Wacovia’s representative on the survey, Dan Thorpe, has a designation that would fit a robot better than it would a customer service
specialist, he is: Senior Vice President, and Statistics and Modeling Director, Customer Analysis, Research and Targeting Group Wachovia. And most of what he does, seem to involve numbers, spreadsheets and data points, only the magazine feels that all this data is made to work for the good of its customers, and not just for the bank. Read more on Customer Champions, after an elaborate registration process.

If the war for talent has well and truly begun, what is it that companies can do to engage and retain their best people? Taking a leaf out of Customer Relationship Management, one company suggests Employee Relationship Management.

Marketers are beginning to realize that one size fits all messaging is the death-knell of e-mail marketing. So they are going out to their old friend, software, to help search out patterns in peoples browsing and buying behavior. Old world tools like segmentation and customization are popping up in marketing vocabulary to ensure that marketing messages delivered by e-mail yield better ROI. Read more, from CMO Magazine.