Best Practices for Relationship Marketing
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- Brendan Neal
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1 WebTrends 851 SW 6th Ave., Suite 600 Portland, OR fax US Toll Free WebTrends ( ) WebTrends Sales Europe, Middle East, Africa +44 (0) For offices worldwide, visit Best Practices for Relationship Marketing Overview According to a recent Forrester Report, consumers spend 34% of their media time online. Marketing is shifting from a push to pull model and consumers are taking more control over what they view and how they view it. This shift in the marketing landscape means consumers are less likely to respond to mass media marketing strategies. To address this challenge, companies are turning to relationship marketing in order to develop more creative, innovative and cost-effective strategies for retaining and building loyalty with their customers. Let s take a look at how your organization can move beyond traditional marketing and leverage the loyalty-creating power of customer relationships. Business Challenges Today, it s all about more. More consumer control, more channels, more media and more money spent online. Because the online channel gives consumers more options to choose from, organizations face a big challenge: when customers can visit any site at any time, what will make them loyal and keep them coming back? According to Frederick Reichheld of Bain & Company: Businesses in many industries may lose up to 50% of their customers over a five year period. Studies have shown it s 6 to 7 times more expensive to acquire a new customer than it is to retain a current customer. As little as a 5% increase in customer retention can increase profits by 25 to 95%. Yet many businesses are still focused only on customer acquisition and see customers from the fragmented view of individual transactions. 1
2 A New Marketing Model: the Learning Relationship With competitors just a mouse click away, marketers need to create strong relationships with their customers in order to build loyalty and keep them coming back. With better customer insight, both online and offline, marketers can develop relationship marketing programs that are relevant to their visitors needs. The goal of relationship marketing is to increase customer loyalty. At the core of this strategy is the concept of establishing a learning relationship with each customer. Every interaction you have with a customer is an opportunity to learn about their individual motivations. The unique measurability of the web takes this relationship to a new level because it provides greater insight into customer preferences and behavior. Marketing experts Peppers & Rodgers have demonstrated that, Even if a competitor offers the same type of customization and interaction, your customer won t be able to enjoy the same level of convenience without taking the time to teach the competitor the lessons your company has already learned. That s a powerful motivator for them to stay loyal. Gaining deep insight into visitor behavior at every stage of the visitor lifecycle is essential to successful relationship marketing. Businesses must move beyond the fragmented view of individual transactions and view customer behavior over the lifetime of the relationship. Customer behavior should be represented by a comprehensive cross-channel analysis of all customer data, allowing deep insights into customer preferences and motivations. Moving beyond transactions lets you monitor individual behavior accurately across any time period and learn about customer preferences and motivations. It allows you to segment your customers, not just activities and transactions. Instead of reacting to transactional data (which is a mirror to the past) you can proactively meet the needs of your customers through relevant online and offline marketing programs and a personalized online experience. Economies of scale which provided benefits in the past to large companies running mass media marketing campaigns no longer apply in the world of relationship marketing. Companies that have the most insight into customer behavior and motivation will have the greatest competitive advantage. They ll also outperform companies continuing to operate on a transactional basis with their customers. How can WebTrends help you start building relationships? While implementing relationship marketing requires a strategic change, it does not necessarily require a major organizational overhaul. Fortunately, web analytics offers a wealth of knowledge about customer behavior and motivation. WebTrends Marketing Lab, which includes WebTrends Marketing Warehouse 2.0, helps you gather information about customer behavior and evaluate your ability to establish and maintain relationships with your customers. Take a look at the process, step by step. 2
3 Step 1: Understanding the Visitors Behind the Visits Every interaction is an opportunity to understand more about your customers. Because customer data is captured through a variety of channels, marketers often have a fragmented view of their visitors. It s essential to develop a comprehensive cross-channel view of customer behavior to have a complete understanding of their interests andpreferences. You must recognize individual customers at every contact point to learn about individual customer needs and motivations. WebTrends Marketing Warehouse makes it possible to tie what you know about your visitor s offline to the behavior they exhibit online, allowing you to tie demographic, psychographic, and geographic visitor information to the powerful attributes from your web channel. Here are a few examples of the kinds of online and offline visitor insight you can capture in the WebTrends Marketing Warehouse. Step 2: Segmenting Customers by Behavior The next step is segmenting by customer behavior. WebTrends Marketing Warehouse gives business users the flexibility to explore and segment visitor data on the fly, gaining insights with every customer interaction. Group your customers by their needs and their value to your organization. Discover how visitors frequency and recency impact the sales cycle Identify visitors that are most likely to purchase, register or apply Create and customize your segments in real time by assigning levels of visitor interest, or visitor attractiveness Compare segments and look for ways to increase the value of underperforming segments or look to expand your most valuable segments Segmenting customers is your chance to find opportunities for creating an ongoing dialogue with your customers. 3
4 Create and manage customer segments on the fly and identify the visitors that share common preferences. Step 3: Creating Specific Content to meet Your Customers Needs WebTrends Marketing Warehouse gives business users the ability to generate realtime visitor lists for targeted marketing, ensuring you reach the right customers at the right time. Send personalized to customers who have opted into communications Tailor the messaging around recently viewed products or around events in the customer lifecycle Limit your marketing dollars to customers who are more likely to respond positively to your campaigns Use the data you ve gathered to customize your marketing message to individual customers, and use insight gained to take action to improve the effectiveness and cost-efficiency of your marketing efforts. Generate real-time visitor lists to drive targeted and relevant communications with your customers. 4
5 Step 4: Measuring your Success The final step in the process is to measure the results of your relationship marketing campaigns and continually optimize the results of your programs. WebTrends Marketing Lab makes it possible to get immediate feedback from your customers. You can easily identify customer detours and abandonment points and react quickly to re-engage them. WebTrends Analytics 8 lets you see how your customers are accessing your website and measure the ongoing performance of your relationship marketing programs. By measuring and learning from your customers at every interaction, you can continually provide a better experience every time the customer returns, which creates a lasting competitive advantage. Use WebTrends Campaign Reporting to measure and compare the effectiveness of your relationship marketing campaigns. The Results of Relationship Marketing Drive Customer Response Use the insight you gain to develop online and offline marketing programs based on the preferences and motivations of your customers. WebTrends Marketing Warehouse helps you target customer behaviors across multiple channels of visitor information. Then you can measure the results in WebTrends Analytics 8 to refine your approach to the market. When you create learning relationships with your customers, you can meet their needs more effectively and more efficiently. Identify buyers, applicants or registrants that are on the fence. Immediately generate a product-specific offer based to compel them to convert Increase your site stickiness and downloads. Personalize your content and offers based on online behavior and offline customer data. 5
6 Build Brand Engagement Learn how customers want to engage with your content and your brand. By using every transaction with a customer as an opportunity to gain insight, you can create customer lock-in by delivering the right experience and modifying the experience based on your customer s needs and motivations. Reward your loyal customers. Identify your high-value visitors that forwarded a new product offer to a friend and send a special discount offer as a thank you. Reengage inactive customers. Identify your loyalty program members that have not been to the site recently. Send them a text message with a bonus points offer. Increase Customer Loyalty Once you establish a learning relationship with your customers you become their partner. You re able to meet and exceed customer expectations by anticipating their needs. The more complex customers needs become the more they will appreciate the relationship you have established with them and the less likely they will be to go elsewhere. Improve customer service. Identify your high value customers who used your online support system and indicated their issue was unresolved. Launch proactive customer service calls to help resolve the problem. Increase up-sell and cross-sell opportunities. Tie offline information such as purchase history and demographic data to online behavior to tailor up-sell and cross-sell promotions to include product or services a customer is most likely to buy. Summary As customer perceptions continue to shift toward a more commoditized view of the world, traditional marketing methods are quickly becoming obsolete. The market advantage is shifting from companies with the ability to reach large numbers of customers through mass media to those that have high levels of insight into individual customer s behaviors and preferences. Businesses that move beyond individual transactions and engage in learning relationships with customers are seeing a lasting competitive advantage. WebTrends Marketing Warehouse 2.0 dramatically simplifies this process, providing real-time visitor insight businesses need to build customer loyalty and succeed in the new world of marketing. About WebTrends: As the acknowledged global web analytics market leader for more than 12 years, WebTrends is leading the way in Marketing Performance Management. With an uncompromising focus on delivering the most accurate and actionable metrics, WebTrends enables thousands of web-smart organizations to improve campaign performance, web site conversion, and customer relationships. More than half of the Fortune and Global 500 rely on WebTrends as their trusted standard for awardwinning technology, consulting services and industry expertise across the broadest range of vertical markets. Through software and on-demand options and a full range of data collection methods, WebTrends is unmatched in its ability to meet any analysis objective with accuracy, privacy and security best practices. WebTrends Marketing Lab, WebTrends Analytics 8, and WebTrends Marketing Warehouse, WebTrends and the WebTrends logo are trademarks or registered trademarks of WebTrends Inc. or its subsidiaries in the United States and other jurisdictions. All other company and product names may be trademarks or registered trademarks of their respective companies WebTrends Inc. All rights reserved. 6
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