Marketing and sales
How can I get new customers of the right type?
How much does it cost to get customers?
Why can't I keep customers?
How can I get my revenue up?
How well does our brand convey our image?
How consistently do we use our brand?
How do we tailor offerings to different segments?
How do we monitor customer satisfaction levels?
How successful is our promotion and advertising?
How do we track the return for each advertising and promotional activity?
Do we set and monitor sales targets?
How effective are sales channels?
How clearly defined is our pricing position?
Is pricing tailored to each customer segment?
How responsive is pricing to inflation, market conditions, profitability etc?
Branding
How pervasive and consistent is the use of our brand?
How effectively does our branding represent the image we want to portray to our customers?
How well is our brand recognised in the market?
Customer acquisition
How effective are we in attracting our preferred customer type?
Is the cost of acquisition of new customers low in relation to the lifetime value of that customer?
Customer retention
To what extent do we segment our customer base and tailor our offering to the specific needs of each segment?
How well do we develop customer loyalty?
To what extent do we monitor customer satisfaction levels?
Promotion and advertising
How successful is our promotion and advertising?
To what extent do we track the return on investment for each advertising and promotional activity?
To what extent do we evaluate marketing activity in relation to the strategic direction of the business?
Sales strategy
Do we set sales targets and measure success in achieving these?
How effective are our existing sales channels in reaching our target market segments?
Pricing strategy
How clearly defined is our pricing position, i.e. premium-priced, going rate-priced, discounter?
Do we have a pricing schedule that requires authorisation to be discounted?
To what extent is our pricing tailored to each customer segment?
How responsive are our price adjustments to changes in inflation, market conditions, profitability and other factors?
Overview of customer loyalty programme
How well do we develop customer loyalty?
A system to foster existing customer relationships is referred to as a loyalty or retention program. The goal of loyalty programs is to lock in a business' customers to ensure a long-term revenue stream. Because acquiring new customers is typically four to five times more expensive than retaining existing customers many firms find keeping their customers loyal a financially sound activity.
TIME TO COMPLETE: 2-15 days depending on the nature of the program.
Process
Step 1 - Determine the business' most profitable customers
Gather sales data on the customers of the business over a reasonable time period (3-5 years). Gather service data for these same customers over the same time period. Using this data, determine the profitability of customers. Rank customers by profitability and identify which ones are most, and least, valuable to the business.
Step 2 - Identify the needs of these customers
Determine the needs of the profitable customers through a combination of qualitative and quantitative measures. Conduct a survey of these customers to determine their current satisfaction level and the extent to which their needs are being met by the business' current products and services, including support services.
Step 3 - Develop a loyalty program satisfying these needs
Based on the results of your research, craft retention or loyalty programs that will increase the propensity of a customer to remain loyal to the business. These include:
- Communications programs to keep customers updated with product or service development
- Seminars or workshops to educate customers
- Systems to thank customers for doing business with the organization
- Reward schemes for customers meeting certain buying criteria
- Corporate events for loyal customers (where appropriate - do not go overboard on this)
- Pricing programs that reward repeat purchases or upselling
Ensure that the incentives and benefits proposed align with the motivations and needs of the relevant customer segments. Test these concepts through customer advisory boards (CABs) (a separate Action Step) and/or focus groups.
Step 4 - Monitor and track the program
Track the success of the loyalty programs using metrics such as customer retention and defection rates. Establish systems and processes to track sales and loyalty by channel. Modify programs as necessary and continue rollout.
Deliverables
A customer loyalty program that includes:
- Rationale for the program with supporting data, e.g. average acquisition cost, benefits most valued by loyal customers
- Basis of the scheme, targets, and estimated cost
- Feedback and monitoring mechanisms
- Action plan for implementation with timing and responsibilities
Do's
Only reward the loyalty of profitable customers. Some customers are better off leaving the business.
Focus on getting value for money from your program, e.g. in the current economic climate, it would be a brave decision to invest a significant amount in corporate hospitality. It is important to be as sure as you can be that you will get a return on your investment.
Don't's
Reward customers with gifts that are not related to the products or services currently provided. It is best to identify rewards that augment or support the current relationship with the customer.
Treat all customers the same. You should segment the customer base and understand that different customers are motivated by different things.