How can web marketing help you keep your best customers?

Most people focus all their efforts on attracting new customers and hardly any effort on keeping and growing valuable customers. In a difficult economy you cannot afford to lose valuable customers.

Who are your best customers?

First of all I am assuming that you have a definition for a best customer. The definition will depend on your business situation and the data you have access to. Is it a customer who has:-

• been with you longest?
• spent the most with you this year / or ever?
• generated the most value (profit contribution) for you this year / or ever?

Where the data exists, then using value or profit contribution is best because two customers that generate the same sales revenue might have significantly different costs to serve.

It gets harder with more customers

If you have 2 or 5 or 25 customers you could keep track of which customers are continuing to buy from you and whether they are happy in your head. It's harder when you have 50 or 5,000 or 5 million, especially if they are more remote e.g. telephone sales or online sales.

You need a CLTV marketing strategy

Customer lifetime value marketing is a process to help companies grow the value of their business. Its about getting more customers to:-

• spend more per transaction
• spend more frequently
• for longer (i.e. to increase the customer lifetime)

It is not rocket science but it does require detailed analysis of your customers and marketing strategy to identify the best solution for your business.

Different analytical techniques can be used to identify the historical value of your customers. It is also critical to identify the future value of customers and this is what most companies find most challenging.  

It works for smaller companies too

A small number of Britain's best brands have used these techniques to successfully grow customer lifetime value. And the good news is that these techniques can also work for small and mid sized companies.

What's exciting is that 5 or so years ago these techniques were often too difficult and prohibitively expensive for smaller companies. However, the growth of new systems, the internet and email marketing have smashed many of the barriers.

How does it work?

A scoring system is developed that scores customers based on their past and future value. This scoring can occur weekly /  monthly / quarterly depending on the business needs. e.g. customers could be placed into 1 of 25 different value segments.

Rather than treating everyone the same, a specific marketing strategy is developed for each value segment based on its likelihood to maximise customer lifetime value. It could be that for one value segment the strategy is to telephone them today. For another value segment, it might be to send a personalised email with a specific message or offer.

The performance of each strategy is measured and refined based on the results.

Once the strategy has been developed it is possible to automate this where at the 'press of a button' your customer database is scored, placed into different segments with every segment getting a personalised email with a specific offer most relevant for them. Done well, this should help grow the value of your business and ensure that you keep your best customers and better still have more of them.

If you don't have the expertise do this it's worth talking to a web marketing expert.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Is your web marketing joined up?

With so much money spent on web marketing, why do so many companies get such poor results? I believe that 95% of UK business web sites fail to deliver good results. For me, there are 2 key requirements for marketing to be successful:-

• understanding what marketing is
• making sure that your marketing is joined up

What is marketing?

Web design; producing an ad or a logo or a direct marketing leaflet in isolation does not constitute marketing. Marketing is a process designed to solve customers' problems profitably. This process consists of a series of key steps related to the 4 power words used in the definition:-

1 Customer - What defines your target customer? e.g.

• How many are there? 
• What are they worth?
• Is the market growing or shrinking?
• How is the market segmented?
• What are their key attitudes?
• What drives their buying behaviour?
• What factors might change their buying behaviour?

2 Problem - what customer problem are you trying to solve? e.g.

• if the problem you were trying to solve is 'needing good quality 35mm photographic film', the move to digital cameras has probably destroyed your business
• alternatively, if the problem was 'How do I capture memories?' then new technology can enable new solutions for a timeless problem.
• In much of the world, where people have few needs and many wants, the problem often has an emotional driver rather than just a rational driver. People don't need lager. Most don't buy brand A lager because it tastes better than brand B. For a significant segment, holding a bottle of the right brand makes an important statement about them - either to themselves if they are inner directed or to others if they are externally directed.

3 Solution - what is your solution to your target customers' problem?

• Can it be defined in a simple brand thought?
• Does your target customer agree that it solves their problem?
• Is the communication message clear and compelling for your target audience?
• Is it distinctive from your key competitors?
• Does it have legs? - is it robust or will it collapse after a short time?

4 Profitably - (or efficiently for a charity)

• there have never been so many ways to waste your money. Marketing is about making the right choices to get the best return for your marketing investment (MROI)
• this means you need to define what means 'the best return' for your organisation and then measure performance (we metrics) to ensure the best results are being achieved

What is joined-up marketing?

Doing 1 or 2 or 3 elements of the marketing process is not enough. You need to look at the whole process and ensure that all parts are effectively integrated or joined up e.g:-

• There is no value in having a pretty web design if you don't know who your target customers are or have a solution to their key problem. 
• Having a successful Google Pay Per Click Strategy is fine but it is not enough if you don't have a strategy to convert web visitors to valuable customers

Successful marketing has to look at the whole process from:-

• creating the right message for the right audience
• delivering the message to the right people at the right time in the right way
• measuring and analysing the prospect's reaction to the message - do they see it / ignore it / click it / interact with it / visit / return / buy?
• refining the campaign based on learning
• measure and refine again and again

Why is it so hard?

It's hard because most client companies do not know about the marketing process. Most agencies do not know about the process either (even if they are experts in their bit of the process), so inevitably they will sell you their bit of the process. That's fine if the client company has the expertise to integrate the various marketing elements but most do not have this expertise. 

As a result marketing can too often become a lottery where the risk is significantly increased in relation to the missing components from the marketing process.

If you haven't got web marketing expertise in-house, then make sure your web marketing expert has.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Is mobile marketing part of of your web marketing strategy?

Most companies I talk to are not doing any mobile marketing. Are they missing a trick? I believe they are and that certain companies could attract target prospects to call them or visit their web site through the use of mobile marketing.

In western Europe (UK, France, Germany, Italy & Spain) there are now more mobile phones than people. Worldwide there are more mobiles than televisions & personal computers combined. Unlike the PC, most people carry their mobile with them 24*7, whether they are at home, work or play. In December 07, 17M people in the UK accessed the internet from their phone. Right now, mobile internet users tend to be male & young but this will change over time.

iPhone users are heavier users of the mobile internet, According to recent research by ComScore of mobile users in France, Germany & the UK:-

• 11% accessed any news or information via their phone browser
• 32% of Smartphone users accessed any news or information via their phone browser
  
• 80% of iPhone users accessed any news or information via their phone browser

Given that iPhones have just halved in price and now have 3G, sales are likely to grow at an even faster rate.

There is a big opportunity for certain companies to be accessible on the mobile internet. People are using mobile search e.g. Google because they want information to help them make an immediate purchase.  It is especially relevant for restaurants, clubs, bars, hotels, travel, entertainment & information services i.e. when people are out & around and looking for somewhere to go, something to do or buy. 

With Google Mobile ads, you can direct people to call you (with just 1 click) or visit a mobile website, or both. Response rates of 15% are not unheard of.  If you don't have a mobile website, it is easy to create a specific mobile web page. 

 

Web marketing tips that any business (large or small) could apply to attract and keep valuable customers and grow customer lifetime value.

• consider if your target customers are mobile users who are likely to search for your products or services using their mobile
• if so, how can you make it easy for them to find you and contact you
• consider using Google mobile advertising as part of your overall web marketing strategy
• set up a mobile advertising campaign using best practice
• if required, find a web marketing expert to help you do this 
• test alternative propositions, messages, calls to action etc
• review results on a regular basis and find out what is working & what isn't
• refine your strategy based on the results

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Are you enhancing or destroying your online reputation?

Companies will have different objectives for their web marketing but I would expect that everyone will want to enhance their reputation with customers and prospects. 

A recent research study by US company Habeas Inc reveals some interesting findings which are included below. Thanks to Dotmailer for bringing the report to my attention.

So what can you due to enhance your reputation online? 

Over 88% of respondents want companies to provide more choice over the content and frequency of emails that they receive.

More than 80% of respondents prefer doing business with companies that use opt-in permission to send them email. I have been sending out my marketing newsletter for nearly 4 years and have only ever sent it to people that have opted-in. Some people think because you have met them for 2 minutes at a networking event and swapped business cards they are entitled to bombard you with emails and newsletters. It may be OK legally but I find it irritating. 

Monthly emails and content & frequency options gave a positive impact on a company's reputation.

75% of respondents prefer engaging with companies that show strong privacy practices. I strongly agree with this. Once again, my SME marketing website has always had a statement next to the opt-in box saying 'We will never sell or rent your email address and you can opt-out at any time'. Next to this is a link to my Privacy Policy. I adopt the same policy for my web marketing clients, a good example being DriveTech Advantage who yesterday launched an innovative driving lesson service.

What will damage your reputation online?

Around 80% of respondents are not comfortable with a business sharing their email addresses.

Over 80% of respondents feel that a business's reputation is negatively impacted if it shares customer email addresses with third parties. In my view, it's best not to damage trust and share data. If you agree, let people know and use a similar statement to me 'We will never sell or rent your email address and you can opt-out at any time'.

Nearly 60% of respondents use 2 or more email addresses depending on their degree of trust with the company. So, give users the opportunity to update their email address when they feel more confident about your web marketing integrity.

Why does this matter?

The only way you can expect to grow customer lifetime value is by solving customers' problems profitably and keeping their trust. In my own case I have just updated the email broadcast system I use for my clients to ensure that I can offer web marketing solutions that comply with best practice.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Is 95% customer retention a good result?

I recently met with a prospect who told me that they retained over 95% of their customers. I was impressed because so many companies are focussed on attracting new customers they don't apply much energy to retaining existing customers and growing customer lifetime value.

I was even more impressed when I compared the results with some of Britain's best brands like AA & RAC who have highly developed customer retention programmes and typically get around 85% retention across the year.

On further probing, the 95% retention figure was per month not per year. If the 95% retention figure per month is recalculated across the year then the annual retention figure is 40% not 95%. This meant they have to get 600 new clients each year just to stand still!

This is a well run company offering a really good service. If this is typical example, no wonder so many companies are so obsessed with attracting new clients. But do they have an attraction problem. In this example, the figures imply that retention is an issue and the proposal I am preparing focuses on this by including a customer lifetime value strategy.

Smart customer lifetime value strategies used to be something only a handful of Britain's best brands did. However, changes in technology and data capture mean that it is something that should be considered by all companies large or small.

Web marketing tips that any business (large or small) could apply to attract and keep valuable customers and grow customer lifetime value.

• Calculate your annual retention figure (aim for 80% or better)
• Consider the relationship between volume and value for your customers e.g. calculate the retention figures for high value, mid value & low value customers - it's more important to keep high value customers
• If it is low, investigate why and develop action plans to improve retention and keep more high value customers
• I develop a customer lifetime value matrix with with specific actions for customers in specific cells. This can be linked to a smart email system that automatically send outs personalised, dynamic messages for each customer focused on improving Customer Lifetime Value.  

For more information, take a look at my article on increasing customer lifetime value.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.