Profiling and keeping track of competitors is a common activity for companies that want to stay on top of market developments. But few companies monitor their customers using the same methods despite clear advantages to doing so.
While a CRM system typically allows tracking of contact data, customer communication, order history and marketing campaigns, there are elements they tend to overlook. Customer corporate goals and strategies are seldom described in CRM systems, nor is information about business performance, new product releases, major contracts and agreements, organizational restructuring, or statements from key personnel - all of which can give the sales force an edge in following up customers, or evaluating a potential new customer.
If your sales force had company profiles containing the above information (and more) on your top 5 or 10 key accounts, none would dispute that their ability to identify opportunities and threats to the customer relationship would increase. Not only does your sales force improve its knowledge, but your customers will be duly impressed by your knowledge about them. The same holds true both for following up existing customers, and when preparing for the crucial first meeting with potential new customers.
The great Chinese general Sun Tzu once said: “Know the enemy, know yourself, and victory is never in doubt - not in a hundred battles. He who knows self, but not the enemy, will suffer one defeat for every victory. He who knows neither self nor enemy, will fail in every battle.” Had Sun Tzu not been a warrior, but a merchant, he might have included the customer in his saying. “Know the enemy, know yourself, and know your customer – then victory is never in doubt.”
MACAW research can provide company profiles for you to keep tabs on both competitors and customers. But don't just take our word on it when you can judge for yourself. We want you to see with your own eyes what we can do.
So contact us and we will send you a free sample company profile. No strings attached.
Showing posts with label customer analysis. Show all posts
Showing posts with label customer analysis. Show all posts
Sunday, February 15, 2009
Monday, February 2, 2009
Optimizing loyalty programs
Loyalty program managers face a paradox during the global economic downturn. Recent research from airmiles.co.uk suggests that consumers value reward programs more during a recession. But at the same time loyalty program managers are faced with demands to cut costs. Can the short term benefits of cutting costs be aligned with long term customer retention?
The answer is yes. Cutting costs does not only have a short term effect on a company’s result, but also a long term positive effect, assuming that the value of the cost cuts is not surpassed by revenue losses. The latter is what program managers fear; that cutting costs will lead to customer attrition and cause long term net loss. The key to avoid this scenario is to know which loyalty elements to cut and which not to. We will briefly walk you through our process to successfully trim a loyalty program.
One approach to resolving this dilemma is to study the elements of the loyalty program as follows. First, by measuring which elements customers value, and optionally their impact on overall satisfaction, program managers will gain insights into which elements are the key loyalty generators and which are less important. The next step is comparing perceived value to the costs of maintaining individual elements.
By creating a matrix with two dimensions, perceived value and cost, we can map program elements into four groups. Of particular interest are those with high perceived value and low costs. These are the elements you usually want to keep. Elements with low value to customers and high costs for the company should probably be removed from the program. What to do with benefits in low value-low cost and high value-high cost combinations is bound to be debated. By adding a third dimension to the study, customer awareness, one can measure to which extent individual program elements are known to customers. This in turn gives program managers more information to go on.
High cost elements with high value and high awareness are likely to weaken loyalty if they are removed. Similar elements with low awareness could either be removed, as few customers will miss them, or optionally they can be emphasized in future marketing efforts to both existing and potential clients to increase the perceived overall value of the program. For low cost and low value elements, we argue that the consequences of removal should be small regardless of awareness, though it should be noted that any elements with high awareness are more likely to be noticed as missing. Again, the consequences should be small, as long as the elements indeed have low value to customers. That’s really all there is to it.
To summarize, companies should do the following to optimize their loyalty rewards programs.
1. Measure perceived customer value, costs and awareness of individual reward program elements.
2. Keep high value- low cost elements. These elements give the best return on investment.
3. Cut low value- high cost and low value-low cost elements. The former will have greater impact on the bottom line.
4. Consider keeping high cost-high value elements with high awareness. Consider cutting or increase marketing of similar elements with low awareness.
The answer is yes. Cutting costs does not only have a short term effect on a company’s result, but also a long term positive effect, assuming that the value of the cost cuts is not surpassed by revenue losses. The latter is what program managers fear; that cutting costs will lead to customer attrition and cause long term net loss. The key to avoid this scenario is to know which loyalty elements to cut and which not to. We will briefly walk you through our process to successfully trim a loyalty program.
One approach to resolving this dilemma is to study the elements of the loyalty program as follows. First, by measuring which elements customers value, and optionally their impact on overall satisfaction, program managers will gain insights into which elements are the key loyalty generators and which are less important. The next step is comparing perceived value to the costs of maintaining individual elements.
By creating a matrix with two dimensions, perceived value and cost, we can map program elements into four groups. Of particular interest are those with high perceived value and low costs. These are the elements you usually want to keep. Elements with low value to customers and high costs for the company should probably be removed from the program. What to do with benefits in low value-low cost and high value-high cost combinations is bound to be debated. By adding a third dimension to the study, customer awareness, one can measure to which extent individual program elements are known to customers. This in turn gives program managers more information to go on.
High cost elements with high value and high awareness are likely to weaken loyalty if they are removed. Similar elements with low awareness could either be removed, as few customers will miss them, or optionally they can be emphasized in future marketing efforts to both existing and potential clients to increase the perceived overall value of the program. For low cost and low value elements, we argue that the consequences of removal should be small regardless of awareness, though it should be noted that any elements with high awareness are more likely to be noticed as missing. Again, the consequences should be small, as long as the elements indeed have low value to customers. That’s really all there is to it.
To summarize, companies should do the following to optimize their loyalty rewards programs.
1. Measure perceived customer value, costs and awareness of individual reward program elements.
2. Keep high value- low cost elements. These elements give the best return on investment.
3. Cut low value- high cost and low value-low cost elements. The former will have greater impact on the bottom line.
4. Consider keeping high cost-high value elements with high awareness. Consider cutting or increase marketing of similar elements with low awareness.
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