Customer Retention in the New Millennium; Part 1

Kari-Lynn O'Neil, Marketing Strategist

The first in a two-part series on Customer Retention, using tools in the New Millennium. First We'll take a look at 4 key areas you should assess your company with, to get a feel for where you measure up. The second will help you create, then apply the 4 steps to implementing a successful CRM program for your business.

Part 1: Taking the pulse.

Taking control of your customer experience is the 
first step increating and maintaining a 
Customer Retention Program.

Back in the “old days” the rule was a 5% improvement on customer retention could increase profitability by 25 - 85%. It’s a whole new ballgame when it comes to customer retention, and it’s leaving many marketers wondering how to approach things in our new, socially engaged marketplace. Consumers rule the marketplace these days. They’ve taken control over what products stores stock, what services you provide and how much they’ll pay for them.  A quick scan personal FB accounts will provide a list of comments ranging from prideful buys, happy check ins, to snarky posts about poor customer service. Recent research by John Fleming and Jim Asplund indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm. 

If you’re turning a blind eye to customer retention and still think customer acquisition is the name of the game, you’ll be in sorry shape this time next year. The good news is you can take control and actually make tremendous gains by implementing a great CRM (Customer Relationship Management) strategy. In doing so you’ll identify weak points in your customer links and increase loyalty. According to Forrester’s “The Business Impact of Customer Experience, 2010” the better the customer loyalty score impacts your bottom line improves in 3 ways:

1. Incremental purchases from existing customers in the same year
go up- even if only a fraction of them repeat, revenue increases
can improve dramatically depending on your industry. 

2. Revenue saved by lower churn. Even if at-risk customers leave,
the absolute number of customers decreases and revenue saved
goes up. That means your competitor doesn’t get win your fair
share of revenue. 

3. New sales driven by word of mouth. The higher your loyalty score,
the more your customers recommend you. Those are free sales people
advertising out there!

Now take a look at these 4 key areas and determine where you fit the bill. Take notes on what you find and brainstorm on ideas on how to improve. You'll need them in the next step.

1. Customer Service: Poor customer service will ruin you every time. This is a top down issue, my friends. If your employees are providing bad customer service...gulp...it’s management’s fault. Happy employees make happy customers and if you have a problem here you need to find out why and fix it fast. 

How you win: when customers interact with happy employees who are passionate about what they do, they want to come back. People like to feel wanted and appreciated. This is my personal definition of the “Starbucks Effect.” Ever notice how just because they know what coffee you drink, you just want to open the door for the next person in line? Who knew being acknowledged in such a small way could make you a nicer person and loyal enough to spend $102.00 a month to get out of your car. McDonald's price cut Starbucks for your business and it didn’t hurt a bit.(Yep, the place you post on FB who McMesses up your order 98% of the time.) Lesson: people pay more when the service is McBetter.

2. That brings me to my next point, Shore Up the Competition: with today’s economy and the changes in buying patterns, new business acquisition is harder and your competition will do just about anything to win your best customers.

How you win: Loyal customers are provided with offers, sometimes at a loss, to win your customers. Many will be tempted. If they have a great CRM in place you loose big. Being pro-active by implementing a strong CRM (especially with social media) program in many cases will keep them from even seeing those messages. People simply don’t have time to be loyal to many competitors, especially the higher you go in HHI. These aren’t price shoppers, they’re time savers. Assess the competition, and keep and eye on them often.

3. Word of Mouth is King: Traditional media bends new ears, but for CRM, social media is a primary purchase influencer. But it needs to be done right. You will quickly loose your loyal customers to your competition without understanding your audience’s needs, or by attracting undesirables who post negatively. 

How you win: depending on your industry, how you use social media to engage and motivate your customers to continue buying with you, and become brand ambassadors for you to their networks is as individualized as your business. Develop a strategy that centers around key competitive separation points.

4. Reputation Management: It’s not enough to open and close shop put the word out and hope it sticks. You need to have your ears open and respond to what people are saying about you. If you don’t, you may not know you have a problem until it’s too late.

How you win: Use Google Alerts other free social media tools to check your brand if you are managing this task on your own. 

1. HowSocialble?: A simple, free, tool that can measure the visibility of your brand on the web across 22 metrics. 
2. Addict-o-matic: A nice search engine that aggregates rss feeds, allowing you to quickly see the areas where a brand is lacking in presence 
3. Socialmention: A social media search engine offering searches across individual whether or not the score is transparent enough to be meaningful is open to debate.

Any agency worth their weight can perform in depth reporting on your brand as part of their strategy and implementation of a customized CRM program. They can:

1. Find every outspoken blogger, and get them to post how you solved the issue. 

2. Determine if you are carrying a product line that is inferior to your competitor.

3. Address serious reputation issues and create a targeted reputation management strategy. 

A really great strategist may be able to uncover market opportunities your target customer is searching for, (or your competition is loosing the game at) and you can pick up and run for greater growth opportunities.


Next : Implementing a Customer Relationship Management (CRM) program.

Top 10 Do's and Don't for Social Media Success

In the right hands, Social Media
 is a Marketers Dream come true.

Kari-Lynn O'Neil, Marketing Strategist

Everyone is doing it, but not everyone is doing it well. One thing is for sure, there is lots of confusion on how to use social media marketing and why. Should social media marketing be incorporated in a business plan or is it a big waste of time? The answer is yes and no. It is a waste of time if you use it wrong; but in the right hands it’s a marketers dream come true. It can boost the ROI of traditional media through the roof, provide a wealth of knowledge about your target audience, and is a great way to capture hard earned leads and funnel them into a program until they are ready to buy. Something traditional media alone cannot do. Here’s 10 do’s and don’ts to get you started on the path to using social media successfully.

1. 1. Do create a strategy. This is a valid form of marketing. Do you take out ad space without a purpose? I hope not. The same holds true for social media. For example, if you are a fashion retail store, a overview strategy could look like the one below:
• Target fashion-forward consumers with high-value content around fashion trends and entertainment.
• Create a blog that generates interest and features in-depth content around brands you carry and showcases your expertise in fashion and availability of stylists for personal consultation.
• Repost blogs on your Facebook page with a link back to your website.
• Facebook presence has a welcome page for new "likes" with 20% off first purchase when they book with a consultant (revealed after they “like” you). Links back to consultant page on website for them to read bios, schedule with online booking appointment feature, also videos, fashion tips.
• Facebook posting strategy includes videos, photos, posts, surveys about styles in store from various designers, trends, etc. Sprinkle with specials, sales and exclusive deals for Facebook fans only.
• Store check-in specials: Point-of-purchase offers: get discount at register when fans check in and show and tell what they bought to their friend network ; Gift with purchase if they snap a shot and post then and there.
• Sweepstakes for Ratings: handout cards with receipt asking to Like and Review on Facebook. All reviewers will entered in Sweepstakes for Gift Card for the Store. Winners announced on Facebook.
2. 2. Don’t post without a plan. This can be disastrous. We recently helped out a a retailer who first got the wrong “likes” by only posting sales, then were baffled when people were posting complaints because deals weren’t good enough. They drew this group to their door by lacking a solid strategy in social. Had they done research would have known that penny pinchers/couponers are also chronic complainers. It will take a while to reverse this process, but a focused plan on creating a following of shoppers who were looking for quality, with a narrowed search for higher household income, they would have avoided having 25K+ people see posts that send the message: “last time you had this sale it was 33% off, now it’s 25%. You’re making plenty more than all of us customers in this economy. I’m not shopping here anymore.” 3,000+ “likes” attached to the comment. These aren’t they kind of “likes” you strategize for!
3. 3. Do implement KPI (Key Performance Indicators). If you don’t have a system for determining what is working, you won’t know what to keep doing or what to cut in favor of something new. In the example strategy above, you can track how many impressions your blog got. Depending on where your blog is (website, blogger, etc.) you can track further. Analytics can tell you if they exit or what page they went to next. You can measure how much traffic comes to your site from FB. From there depending on your level of sophistication, there is a lot you can do to learn and convert your customer. The 20% coupon is easy to measure and can be directly linked to ROI, as can the Check in Special. You can be on the ball and see how many new likes you get based on this strategy as it usually happens that day. Each month when you get your FB insights, compare traffic, user profiles against your KPI and ROI and tweak your strategy.
4. 4. Don’t dilute your fan base with likes outside your target market. The race to get the most likes is ridiculous unless you sell water (or some product nearly everyone wants). Your fan base should be “narrow and deep” with a highly targeted group of people who fit your “perfect customer” to a tee. These are repeat customers who will be loyal to you and keep your business thriving. You can learn a lot from them, test product ideas out, marketing concepts… don’t waste this opportunity.
5. 5. Do your research. Understand what channels of social media will be effective for your business. Each social media channel delivers a different audience, and each has niches within it. Knowing which social media channel (or several) are right for you, and how to utilize them in the proper proportions will save you time and increase your success rate.
6. 6. Don’t be self absorbed. Amateur social media is obvious. It is filled with first person posts that are one sided self serving marketing messages. “We have this on sale.” “Stop in and get this.” “We have this event.” “I am doing this today” It’s the fastest way to get unliked. Think of your page as a mini-magazine your fans want to peek at when they are waiting places. That’s what people are using mobile devices for.  Engaging them with soft sell messages is a better way to keep them in your base. If you were creating an online magazine with mini layouts of text, video, pictures, links, what would it feature? B2B and B2C channels are different; now post in bite size bits.
7. 7. Do understand your audience. What are their needs? Branding is critical in social media too. Copywriting, images and style all can work for you or against you here. A small investment with a professional can do wonders. 
8. 8. Don’t forget Social is an extension of your brand. Customers should have the same brand experience as other all your other touch points. I’m baffled when I see a beautiful website, lovely print ads and go to a Facebook page or blog where the customer loyalty should be taking place and the logo isn’t even centered or photos look like they were taken by a kid with a phone. Is that really how you want people to experience your brand? Again, a qualified professional can set up these areas sometimes within a day or two and turn things back to you for a lot less than you might think.
9. 9. Do integrate Social with traditional marketing to increase your ROI. Ultimately, at this point social is a  customer loyalty channel. It helps you maintain hard won customers and leads into become a paying customer. Integrating social media messages into traditional advertising and having a solid strategy that keeps them engaged captures those leads and keeps them from going to the competition.
10. 10. Don’t leave this job to the intern. Yep. We all know that smart kid who is great with the latest tools, but do you really want your intern responsible for branding and business development. 

With 750 million users in Facebook and counting, new apps and platforms being developed almost daily, social media is not going away. SMM (Social Media Marketing) is getting more sophisticated and customers are becoming more selective with who they accept messages from. If you are like many businesses who feel they need a leg up on SMM before it’s too late, we have a variety of solutions from full custom packages, quick-start options for you to maintain successfully in house, to business coaching.

Increasing Web Traffic Through Social Media: Spiders and Bots and Eyes, Oh My!

Kari-Lynn O'Neil, Marketing Strategist 

For the average business owner, Internet marketing isn't why they went into business. Start throwing out web optimization terms like black hat, white hat, spiders and bots and you have their head spinning like a tornado in the land of Oz. Technology changes so rapidly that as soon as you understand the terminology, they have all new terms! Well, get ready for a head spin and another trip down the yellow brick road…

Those who fear eight legged creatures and things that creep through your site will enjoy this fact: In the United States, approximately 25% of all web traffic starts from social networking websites. 

Yep. Because these websites allow users to add favorites, friends, followers, links, photos, quotes, recommendations/reviews, tweets and videos, you could think of it as enriched, super charged FREE search engine marketing (SEM). Can you imagine how much you'd pay for an ad like that? So why are companies continuing to snub social media marketing and spend more on SEO and SEM, filling their website with unreadable content for bots and spiders instead of eyeballs?

Well, remember not so long ago when that guy (I know you know this guy) who said, "Websites? My son has a computer in his room in the basement. He can build us a website. See all those people with cellphones? What we need is bigger Yellow Page ads!" And so the son built a website with dancing 'scotty dogs with bows' border, 3D type on black background... It's like that for Social right now. Let me warn you: just because so many of the social media tools are free it doesn't give you permission to be sloppy with your brand. It may be the only impression a customer ever has of you. If you truly have great products or services, and you're scratching your head as to why you aren't seeing more growth, you'd be a great candidate for Social Media Marketing. All the SEO or SEM can't compete with great word of mouth marketing and passion that come from a great customer experience. Social Media Marketing can, and it catches on like wild fire. People want to be engaged with brands like yours and they recommend you for free to their network of friends and family who have similar interests.

One only has to take a few moments to observe behavior in our society to see the power of social media. People surf through social networks on the recommendations of their friends because they don't have time to research companies on their own. 

51% of purchases are made from businesses who are "liked" on Facebook and 60% are likely to recommend a business they "like" on Facebook. And that's just one Social Network. A B2B can create a relevant blog, post it on their Facebook Page, several Linkedin groups and Tweet it, upping web traffic 47% in a day. 

We've had blogs reach Japan in less than 48 hours where a fan took the time to translate it for us! Of course if you don't have the right followers and the article isn't worth passing on, you won't get much traction. But that's why investing in a Social Media Marketing expert makes sense. Ask any SEO expert if they can optimize your website with $0 in PPC generate 47% increase in traffic in one day. Social Media is a powerful revenue generating tool in the right hands and a fun waste of time to dabblers.

In our economic times, many businesses are at an uncertain fork in the road. How many competitors will take "Mr. Yellow Page's" path, and how many will have an eye towards the future growth of their company? It's anyone's guess. One thing is for sure, First in, wins. Once a fan is loyal they don't say, "Aw. Look at this poor guy with no fans and a homemade Facebook page. I think I'll be their fan instead of the one who has sweepstakes, events, pre-sale peeks for fans, gives me coupons for being loyal, knows my name when I buy, gives me tips and ideas, has all sorts of cool stuff I love to see and share with my friends." This is a savvy bunch, and they don't keep stragglers clogging their network.

Social Media Marketing is marketing. It involves strategy, research, analytics, branding, relationship management, PR, copywriting and design, which is why it's not working for "do it yourselfers." Doing it right however, more than pays for itself in ROI and increased revenue based on a continually growing, loyal customer base. Loyal customers that could just as easily follow your competitor if you aren't careful.

Creating Social Media Marketing that Works

Kari-Lynn O'Neil, Marketing Strategist

1 out of 3 internet users have a Facebook account. 

100 Million access Facebook on mobile phones. 

If social isn't working for you, you probably aren't 

using it correctly.

When I meet marketing professionals who tell me social media isn't part of their marketing and advertising mix because it doesn't work for them, my brain kind of does a short circuit for a moment. (I think of those cartoons where springs are bouncing around inside my head). Once a compose myself, I ask, "Why isn't it working? Facebook, for example is now the most visited site in the US, with 1 out of 3 internet users having a Facebook account. Half of them log in every day, 35 million update their status and 100 million access Facebook via mobile phones." (This is when I imagine springs bouncing around their heads.)

Our personal experience with social media marketing is not only does it work on its own, it also boosts the ROI on traditional media (radio, billboards, print). And it's not just for big brands. One of our clients, a single location retail boutique, reached 1700% ROI by leveraging our tactics of integrating social media with traditional marketing media. So if your social media marketing isn't working for you, here's a few thoughts as to why that might be happening:

1. You are one of the 41% who did not develop a social media strategy. Posting without a game plan, not understanding your audience, not measuring results...these are a recipe for disaster. Establishing a social media strategy (or developing one with a strategist) can ensure you're investing your marketing budget in the right area, reaching the right audiences at the right time and increase your revenue. 

2. Although tools like Facebook and Twitter are free, it doesn't give you permission to be sloppy. There is a big difference between a full color ad in Vogue Magazine and those flyers stuck on your windshield when you get back to your car. The same is true for social media. Your best customer sees a difference when landing on a professionally run blog or Facebook page and will pop off just as fast as you crumple up windshield fodder. Does your social media experience do your brand justice? 

3. It's not really all about you. Seriously. Get over yourself. If you're one of those businesses that's using social as a dumping ground for sale announcements, blathering on about your accomplishments and posting about how great you are, then no wonder you're failing. Who wants to socialize with a "friend" like that? Fans hate that. This is where strategy comes in. 

4. Measurement — we collect data for a reason. We can can drive highly targeted audiences to your Facebook page inexpensively, manage them through customer loyalty programs, collect data to determine what programs are most effective and utilize them in big ways. It is what makes social media a dream. Imagine being able to cut inventory waste by buying what your best customers told you they wanted. Then you sold them out at a fan only store event? Being able to read data and tie it in with social can create mind boggling promotions that drive fan loyalty through the roof, increase brand recognition and of course have a big impact on sales. Data collection is useless if you aren't driving and maintaining the proper audience.