Customer Relationship Management PDF

MMMLT T1 – Mr. Andres Baez Customer Relationship Management Introduction You should design your customer contacts to maximize the relationship between buyers' services and attention. We will identify our most profitable customers through customer relationship management and build relationships...

MMMLT T1 – Mr. Andres Baez Customer Relationship Management Introduction You should design your customer contacts to maximize the relationship between buyers' services and attention. We will identify our most profitable customers through customer relationship management and build relationships with them, increasing customer retention, spending rates, and referral rates. The relationship between customers and the organization keeps the minds of management busy. So how do we position customers among the other stakeholders? If we want a customer-centric organization, what type of proposition do we offer? Will this result in a mutually sustainable, profitable relationship? What should the organization's business strategy be? How to communicate with customers through different channels? And which CRM systems are needed? Random Notes - Storytelling – a way to connect with people, add value. - Skyscanner is a marketplace like Amazon. - P2P – Pear to Pear - Happy client (client that never complains) vs Detonator. Customer Oriented Strategy: A customer-oriented business is focused on meeting the needs and wants of its customers, i.e., putting the customer ahead of everyone else in everything they do. A few examples of customer-oriented businesses are Apple, Amazon, and Nike. CRM History - 1950-1960 Address books and the Rolodex. - 1970-1980 Computers price decreased, and Database Mk appears. o Robert and Kate Kestnbaum: “Database Mk solutions for BT and Barclays.” · o Robert Shaw (Father of Mk Automation) Which customers would be most likely to react to a Mk campaign. - 1983 Leonard L. Berry Relationship Marketing - 1986 Contact Management Software: ACT! (Automated Contact Tracking). There is a lot of debate about who invented CRM - 1990 The term of CRM is invented (Mr. Gartner and Mr. Siebel). Goldmine is created. - 1993 Siebel CRM was founded, and it was the dominant CRM vendor (45% share market) Expansion and Crisis: 65% of implementations were unsuccessful (on-premise) Not all companies were offering megalithic and expensive solutions - 1999 Salesforce launched their customer relationship management (CRM). SaaS and mobile. Cloud-based CRM. - 2005 Hubspot CRM. - 2008 Social CRM: More important the interaction than the transaction (Relationship). What is Marketing? Marketing is the process by which companies create value for potential customers and customers (…), resulting in strong customer relationships… (Kotler, Bowen, Makens, & Baloglu, 2017, p.31) 2 CRM: Our Challenge 1. Customers want personalization 2. Digital Marketing is king. 3. Marketing tools are fully available and everybody is a content creator.. (Noise) 4. Too many players. Big companies too. Our challenge -> Relevance CRM Solutions -> Relationships, Delighted Clients How to be relevant to customers? The pain point - CRM customer pain points refer to the common challenges businesses face when managing customer interactions. These pain points include disorganized customer data, inefficient communication, missed opportunities, lack of personalization, and limited visibility into customer interactions. For that you need knowledge and DATA. CRM stands for Customer Relationship Management, definitions: 1. Combination of strategy and technology to build and improve business relationships with customers. 2. Process of managing all interactions keeping data a company has, with its Leads, Customers, Partners and Suppliers. 3. Integrated approach to Identify, acquire, and retain customers. Misunderstandings about CRM - CRM is not only database marketing - CRM is not only IT software - CRM is not only a loyalty plan - CRM can not be implemented by any company 3 CRM is based on Customer oriented strategy Customer orientated Strategy is the strategy of collecting and using customer data, to develop: More value for customer (Added value), More information for a more competitive strategy. Types of CRM 1. Strategic: Careful plan, Customer-oriented and based on Data-Driven to Identify, Acquire and retain customers. 2. Operational: Automation of selling, marketing and service processes based on data. 3. Analytical: The process through we transform customer-data into insights. What are the Benefits of Using CRM? 1. Better customer service 2. Better sales 3. Better customer retention 4. Detailed analytics 5. Higher efficiency and productivity 6. Centralized database for all data and information 7. Better communication with your potential leads 8. Better segmentation of the customers 9. Automate the sales reports 10. Better sales forecasting 11. Better internal communication Pain point sales perspective: we’re talking about what we have that our client wants. 4 Understanding relationships using CRM Awareness: a channel – when someone looks for something we must be there – communication. Acquisition: when you convert a potential client into client. How you’ll persuade them to choose you. Acquire = Sales = Pain Point – In Marketing this can be explained as Touchpoints, Moments of truth, Interactions, Blueprints; In Sales we’re talking about what we have that our client wants. Service: the time where the client will enjoy our products. Loyalty (post-sales): the retention of clients is 8x cheaper than trying to find new ones. It’s very difficult to have new clients so once we get one, keeping him is mandatory. The easy way is through promotion and sales. The best way is to build a relationship with the client. In luxury we must create value. TOM: Top of mind – When someone thinks of something, thinks immediately on you. We should try to gain confidence with the client to send private messages (e.g. How are you John, we have a wonderful Christmas dinner… build a relationship). ISDN: Integrated Services Digital Network Whenever we see a cylinder it’s a data base. 5 Mercedes Benz example: 3 data bases: Car clients, Truck Clients, Post sales – if someone is interested in the three and gets contacted by the three marketing departments, it’s too much information for just one person, and the person might get contacted 2 times in a day. Solution?? To put everything on just one database or link the databases and then apply filters when it’s time to connect with the client. Database with 6M Clients it’s something you must update and work with DWR – Data Warehouse – A platform that gathers all the data. E.g. SAP. Spin-off company: when you have an entrepreneur company but you have a big company covering your back. B2B -> B2C Data mining: trying to gather data Relationship Definition: interactive episodes between parties over time. 1. Do you know Newton’s Third Law - “For every action there is an equal and opposite reaction…” (Interaction) 2. and CRM is the process of managing all INTERACTIONS keeping data a company has, with its Leads and Customers. Episodes …have a beginning and an end …are nameable …are composed of interactions: Action and response to that action (Data). Survey – the shorter the better! 6 Reaction: company point of view – what we get to know about the client. Exercise: Episode - Luxury car dealer Awareness Acquisition Service (when Retention (Post he sits on the sales) car he bought) Actions Word of mouth, Conversation (dealer, Driving the car Post sales Social media online, phone) service, loyalty community, exclusive communications Reaction Behaviour, Finance, NAME, GPS, Loyalty? (Data) location, EMAIL, TEL NUMBER. computers, demographic, Preferences (+ Km’s, Location gender comfort, big screen, massage, digital device) Why we also need telephone number? We need a plan B; in case they don’t answer the email we send. Cold Lead – potential client. Hot lead – we have more chances to get this person as a client. In this case, is someone who comes to our dealer. 7 In acquisition we are in the middle so we need to be careful about what to ask to our client. In case, the client is a hot lead, if he shows interest on buying a car, we can start asking for their preferences. When trying to sell another car to the same client, we have advantage because we know the clients pain points, so I can communicate with them, referring the specifics he prefers. Relationship Types - Exploratory: people that come to our website just out of curiosity and they wont buy it because they don’t have possibilities (marketplace). - Basic: when people only buy the service once (e.g. Holidays), you visit a place that you’ll visit only once in your life. They’ll never go back - Cooperative: a B2B relationship with another company (e.g. Airbnb). Once you close a B2B relationship you want to stick with it. We know we need each other. - Dependent: there’s no relationship (e.g. government) Slave clients: when we have no other options - oil, water, electricity. - Relationship: e.g. Student Les Roches~ Relationship Attributes - Trust: Trust appears through the episodes and their interactions: As they learn more about each other, risk and doubts are reduced. For these reasons, trust has been described as the glue that holds a relationship. E.g. The Truman Show “Good morning, good afternoon, good night” – he tries to be polite with the neighborhood. It’s important to build a trust relationship with your clients during the customer journey, to have communications, to be TOM, so that they value us. In the communication we 8  need to give them value content – this is the reason we visit social media, because they give us value. We don’t trust companies, we trust people, family, and friends (word of mouth). Trust is your willingness to buy something or after buying you don’t mind sharing your personal information with the brand. - Commitment: Commitment appears after an ongoing relationship with another is so important as to warrant maximum effort to maintain it. Two ways to get commitment: after a relationship or showing and sharing mutual beliefs (sustainability). - Satisfaction - Mutual goals Important: Companies NEED relationships with their customers. Through interactions (Data), we will identify, acquire and retain PROFITABLE customers. Two types of Reactions: User experience and Data. Customer Lifetime Value Every good “marketer” knows that these days, business is about much more than closing a one-time deal. It's essential that your team learns what customer lifetime value (CLV) is, and how to calculate it. Make a customer not a sale 9 CLV: Prediction of the estimated revenue of all future relationships with your customer. It indicates the total revenue a business can potentially expect from a customer. – The amount of money we expect to make from one client along the customer journey. Calculate: 1. Average purchase value (how much) 2. Average purchase frequency rate (how many) 3. Customer value (1 by 2) 4. Average customer lifespan (Weighting) (how long the relationship is going to be) 5. Finally get CLTV (3 by 4) How does this figure help us? - The company needs to have this type of information for its finance. 1. CAC Estimation (CLV>CAC) – Customer Acquisition Cost – how much does it costs you to get a new customer 2. Communication Budget plan 3. Investment (to measure our performance and to progress precise goals over time) – when you have your own business 4. Report: Manager or shareholders 10 Here we have to Add each Profile to calculate, e.g.: Profile1 = 2020€ CV= 2020/11years=183,64€ - Customer Value per year Lifespan of 10 years = 183,64 x 10= 1836€ - Customer Lifetime Value for the next 10 years. “Customer Lifetime Value is backwards. It’s not only about how much you can extract from your customers. It’s about how much value you provide back to customers during their lifetime.” Dennis Shiao CLV only matters if a customer maintains loyal to the company. Customer Experience - CX - Customer Experience - UX - User Experience (when we talk about technologies we are talking about the technologies) - Moments of Truth - Interactions Customer Experience (CX) and Customer Value (CV) - Definition 1. Customer experience (CX) is everything related to a business that affects a customer’s perception and feelings about it. 11  It includes every INTERACTION, no matter how brief and even if it doesn't result in a purchase. E.g. when we book a room in a hotel, we Expect to find a bed, cleanliness, great staff. But we can find it in any hotel so we must DELIGHT the clients with things they won’t find in other hotels – the WOW effect. The traditional way to delight the clients is to give something they don’t expect but it has a cost for you – having fruit when they get to the room. Having a taxi in front of the hotel for a business client. With an interaction we get Data and CX. 2. Customer Value (CV) is the customer’s perception of the balance between benefits received, from a product or service, and its cost. Moments of truth. MoT - Jan Carlzon. - Moments of truth = Interactions. Action Vs Feelings – moments when your customers decide if they like or not your company. - It is important that companies on their customers' needs (except our detractors and focus on the standard and happy clients) Client types: 10% (clients that are always complaining about everything - detractors)- 80% (standard clients, normal clients)- 10% (happy clients – clients that are happy with everything) - In hospitality, leaders should provide frontline employees empowerment to address their individual needs with agility and courtesy (this is a win win because the customer will feel more connected and secured when facing a problem) 12 - Decisions from the top of the pyramid will not always be the right one – sometimes the information is not correct because we want to make It look that our departments are perfect so when the GM asks how things in the department are, we say that everything is okay, even though they’re not. (Mystery shopper – level of consistency). Cannot compare the qualitative data with the frontline person gets from working with customers, what gets reported to the top is not the full story, everyone says things are ok. When/Where do we have these Moments of true? Luxury car dealer Awareness Acquisition Service Retention Social media design (+) Service (+) We give the client on the Not updated (-) Exclusive offers (+) car buy anniversary a gift Features (+) Target market (-) Personalized (+) (e.g. the story of the car) Performance (+) Good sponsor (+) Knowledge (-) Invite for a club with other The window (+) Assume (-) Mercedes users. Other sources of Customer Value out of the Service: - Operational excellence: Companies with efficiency in their process are perceived like extra value. - Leadership product: Leadership is perceived like best products. - Customized Services: Personalization is perceived like extra value. 13 Collecting Data: Marketing Information System Third Party Data: Information you request from others – pay or public. First-Party Data: Your collect data from your company. Your create a dashboard with information about your company. ERP – Enterprise Resource Planning. We cannot use Chatbot when something is complex or a sale. Second-Party Data: a it’s a mix of information e.g. Mercedes Benz and smart. Different between Reporting and Insights: a report is something that actually happened, an insight is future oriented like an advice, a prediction. Gathering secondary data Disadvantages: when you search you may not find what is important to you. Depends also on who created the data. 14 Marketing Research Tools: PEST Analysis, SWOT Analysis, Competitive Analysis What is a Marketing Information System (MIS)? All the technology that gathers, stores, analyzes, and distributes marketing data to the managers and teams that they need it. When you collet the information and put it in the CRM, we only have to open one page to know what we need, we don’t need to contact other departments. Data Journey in a Campaign i.e. We are collecting information during all the journey. 15 Internal Company Data – Primary Data What types of information do we have? 1. Transactional: Types of Payment, Currency, Channels, Credit Card number, Bank account number, price, dates, times, pace, how many clients, etc… 2. Declaratory – information we need to ask, if we don’t ask we don’t know. Personal Details: Profiles and likes Contact Details Preferences, Likes You need to ask… (names) 3. Behavioral data: How interact with your products - You don’t need to ask…, Preferences, Likes, No sensitive info. – information we can observe. Everything you collect you need a legal test – if we are going to collect sensitive information, you have an extra of security in your data. Example of sensitive information that we need extra agreement: Finance, Health (VIH-AID, Cancer), Religion, Politic, Sexual. To protect this kind of information, we can use synonyms (e.g. prostitute = butterfly). GDPR is the acronym for the General Data Protection Regulation, the specific data privacy laws for individual citizens in the European Union (EU) and the European Economic Area (EEA). 16 Internal Company Data / Data Journey Primary data We can create a check list of things to collect during the journey of the customer.  08:00-11:00: - KPI - Business performance - Business needs - Data creator: Manager / Owner - (eg. We can observe if people go to the breakfast, if they go early to work by taxi at the third day we must have a taxi at the front door)  11:00-12:00: - Cleaning time - Room inventory - Guest check-out patterns. - Data creator: Housekeeping and Reception. - (e.g. If they used the amenities, or if the clients changed something in the disposition of the room, if the client brought something to the room like water or something and they are keeping it in the mini-bar, sports equipment…)  12:00 – 15:00: - F&B Preferences - Data creator: Front line departments  15:00 – 24:00 - Events - Room Services - F&B Preferences - Data creator: Front line departments. - (e.g. if the client likes to go to the theatre because he dressed well, after we can create an emotional link with him talking about same interests) 17 EXAM: You have a fisherman conference in your hotel, what kind of information could you collect from your guests throughout their stay? Internal Company Data – Primary data – Real Case: Montblanc and Retail Next In collaboration with RetailNext, Montblanc deployed video analytics in their offline retail spaces, generating maps that show where customers spent most TIME in store. Counting data from Wi-Fi get powerful insights such as visit duration, unique traffic, pass-by traffic in showcase, visit frequency, and entrance path analytics. Data-driven personalization: The company was able to identify where to place their various product lines and sales staff. The software helped them increase sales by 20% after installation. Rodrigo Fajado, Montblanc’s brand manager. TECH: Intro Marketing Information System 18 Data Field and Table This table has groups of data fields, that form a table. But one data field has a lot of information so we create another table to organize a data field of the first table. When we open a software, we find this kind of scheme. Modules - Groups of tables with related information. The total group of Modules is called Data Model (all the data into the software) – is all of the Modules and tables. Data Field -> Table -> Module -> Data Model How do we connect systems? (we have to create bridges between the information) - Webservice is a network-based resource that fulfills a specific task between applications - API (Application Programming Interface) interface that allows you to build on the data of another application. There's overlap between the two: All web services are APIs, but not all APIs are web services.. (connection relation to data) - ETL: Extraction Transformation and Load... – different software could have different measurements (eg miles to km) – transform and translate the information. 19 CH 4 - Awareness and Customer Acquisition Hubspot: The Ultimate Guide to Customer Acquisition for 2023 What is customer acquisition? Customer acquisition is the process of getting potential customers to buy your products. A strong customer acquisition strategy: 1) attracts leads, 2) nurtures them until they become sales-ready, and 3) converts them into customers. The overall cost of these steps is referred to as your customer acquisition cost (CAC). Why is customer acquisition important? Customer acquisition is important for businesses of any age and size. It allows your business to: Make money to meet costs, pay employees, and reinvest in growth, and Show evidence of traction for outside parties such as investors, partners, and influencers. Customer Acquisition vs Marketing While marketing aims to build awareness, customer acquisition looks to drive action. For example, let’s say you run a Facebook ad aimed at your target market. Metrics will help determine if your effort is working — you can track how many people have shared your ad, commented on it, etc. That’s marketing. Acquisition, meanwhile, speaks to what happens after potential customers click through to your page or receive your emails. If they’re willing to take action by purchasing your products or services, that’s acquisition. Put simply? Marketing drives recognition — acquisition drives revenue. The Customer Acquisition Funnel 20 Acquisition Channels Customer acquisition channels are the platforms companies use to promote their products and services to new audiences — including organic/paid search, organic/paid social media, and email, events, traditional advertising. The best acquisition channels for your business will depend on your audience, resources, and overall strategy. Customer Acquisition Strategies: SEO, Content Marketing, Blogging, Social Media Marketing, Video Marketing, Email Retargeting, Sponsored Content, Customer Spotlights - Referrals, Gated Content (ebooks, guides, templates), Product Pricing. CAC = Marketing costs – Customers acquired How to minimize customer acquisition cost: Improve your website conversion efforts, Boost the value of your current customers, Adjust, and optimize your customer acquisition strategy. How to improve your customer acquisition strategy? 1. Make your strategy sustainable. - A sustainable customer acquisition strategy is one that works in the long run. This means that the investments you make (whether money, time, or human) can be upheld for the foreseeable future. 2. Build in flexibility. - Your customer acquisition strategy should also be flexible because marketing and sales, and the way people respond to them are always changing. While salespeople were once the gatekeepers of information about a product, that’s no longer the case. 3. Find your target market. - All consumers aren’t your best consumers, and customer acquisition efforts can result in a waste of resources if they’re not targeting the right people. Before you invest in any customer acquisition methods, you must define who you’re targeting with said methods. (buyer persona) 21 4. Diversify your approach - When you diversify your acquisition strategy and use various acquisition methods, you have a greater chance of reaching new audiences and generating new leads. 5. Track your customer lifetime value. - Customer acquisition is important, but how long customers continue doing business with you is even more critical. Understanding the types of customers with the longest customer lifetime value can help you refine your customer acquisition efforts and improve your strategy overall. By defining customer LTV alongside CAC, companies can figure out just how long it takes to replace each investment made in acquiring new customers — and how to better spend that acquisition budget. 6. Prioritize decreasing customer churn, not making up for it. - Despite working hard and employing various methods to acquire new customers, sometimes they do leave us. That’s the unfortunate motivation behind customer acquisition, though, and it’s important to recognize. On that note, let’s discuss another buzzword: Churn. Customer churn represents the percentage of customers that peel away from your business and opt-out of your products or services. It’s also referred to as customer attrition or turnover. Why is churn important? Customer churn is what motivates businesses to find and acquire new customers. When you lose customers, you want to go out and find new ones, right? Historically, as businesses have experienced higher churn rates, they’ve invested in more (and more expensive) acquisition methods. 7. Switch from an acquisition funnel to an acquisition flywheel. 22 (slides) We must build a NURTURING strategy: an ongoing communication with the customers, you need to be in contact (wish happy birthday, merry Christmas, etc), you need to irrigate the relationship. The challenge of this is to tell something to the client that is VALUE for them. The Value can appear of with content or with the use of service. Is an INBOUND strategy in order to attract them – send emails or make phone calls. Nurturing/Value Nurture Nurturing is the process of engaging your target audience by offering relevant information. Channels: websites and blogs, email marketing, video marketing, social media, podcasts. Good Practices in Nurturing: Provide valuable content with expert insights. Focus on one relevant topic per email Ensure the relationship progresses naturally (don’t force it – seduction) Test your emails and track key metrics (open rate, visits to the website, time spent, followers) Personalize the emails as far as you can. Personalize the emails as far as you can Stay consistent with your brand Difference: ENGAGE (to keep the customer interested) vs RETAIN (email platform of the university). 23 Social CRM Social CRM integrates nurturing through social media channels with CRM. It gathers data on all your brand social interactions. Social CRM can measure: - Social listening – what is happening in the neighborhood, what people are talking about – trending topics - Emotional response to your brand: “sentiment analysis” – if people are happy or not with our brand - Followers and their profiles – you discover your buyer persona (what you get) through your followers, it is also a validation of our target (what you want), your buyer persona may differ from the buyer persona you get, then you can match your target with your buyer persona (important to note that not all of your followers are buyer personas – not everyone that follows Ferrari can afford to have it). - Engagements – in addiction to the interactivity we have with the client, it’s about the time spent in the app/in general with us - Other traffic patterns (Clicks, Acquisitions) ➔ Leads and customers tracking Lead Scoring – to improve the efficiency on sales - Lead Generation is the process of attracting potential customers and obtaining their details. - Lead Management is the process of developing (converting) leads into customers. - Prioritization is essential. Companies do not have enough resources to contact every lead. - Machine Learning has become quite popular for solving business problems. - Lead scoring is the process of identifying leads ready for sales and assigning a value to each lead. 24 6 Lead scoring models (Examples): - Demographic Information - I only want clients from the south of Spain - Online Behavior. (Web) - Email Engagement. – send emails, they open and click in the pictures - Social Media Engagement. - Negative scores. (Opposite) – if you find someone that is not according to our brand (eg. My product is for women – men receive a different scoring) Software – the same CRM or the software of the contact centers (if you want to talk in English press 1, if you want to talk in Spanish press 2, it’ll direct to specific personnel). Customer Acquisition Strategy Customer acquisition is the process of bringing new customers to our business through our CRM. A customer should not be viewed as a set of independent transaction but as a lifetime income stream. 25 Leads (B2C) and contacts (B2B) are different. Once we propose a deal, you close it or you don’t close it. If you close it, you convert your lead into your client. CRM: Sales, Marketing, Operations/Service CRM Acquisition Channels 1. Acquisition channels are methods, platforms, and strategies through which companies attract leads. 2. The best channels for your business will depend on your audience, resources, and overall strategy: Blogging, Video, Email, Social Media, Podcast, etc 3. The key to all (of life) is understanding how to add value to others: - Content Marketing -> Nurturing (based on content, create a relationship based on trust and commitment) -> Trust - Knowledge -> Data –> Pain Point (mk: when the client decides if they like our product; sales: the needs the client has). 26 How to Measure Customer Acquisition Cost per Lead (CPL) - CPL = MC / LG: MC = marketing costs. CA = Leads generated. Customer Acquisition Cost (CAC) - CAC = MC / CA: MC = marketing costs. CA = customers acquired. In the last years, the cost of acquiring new customers has increased by over 50%. Loyalty is essential. And remember CLV>CAC How to struggle with your Acquisition Costs You can always do better. HOW…?. 1. Improving your website conversion efforts. (UX, Usability) 2. Boost the value of your current customers. CLV. 3. Adjust and optimize your customer acquisition strategy. (Reduce Cost) 4. Building trust in your target Retention and Loyalty How to Retain Customers Create a strong onboarding experience - A good onboarding processshould have workflows with well-timed email triggers, follow-up messaging, self-service knowledge base access, and celebratory messaging to excite and impress new clients. Provide personalized customer experiences - Keep your offering relevant and personalized to each individual customer, so the solution given is the most useful for the problems they are facing. This will make them feel more inclined to continue business with you. Build trust with your customers. - Consistently follow through on your brand promise, and do what you say you'll do over time. This will impact whether or not your customers perceive your brand as trustworthy. 27  Implement a customer feedback loop - product reviews should be distributed to engineers and development teams so they can address flaws in your product's design. By using this system to collect and share customer reviews, your business can efficiently address criticism and improve the customer experience. Maintain a customer communication calendar - if a customer's subscription is set to expire, you can send out an email letting them know they need to renew their account. Send a company newsletter - You can use email automation to send updates or offers to all of your customers at once. And, you can send the email using an RSS feed on a designated frequency, so you don't have to hit "send" manually. Start a customer education program. - Here's an example — HubSpot Academy courses cover generic marketing, sales, and customer service topics. That way, HubSpot customers know how to use the HubSpot tools in their everyday workflow. Offer unique services - People ultimately buy what holds value to them. Eliminating a bottleneck, removing a kink in a workflow, or automating a process in a way that no other company can is a strong reason for a customer to commit to your brand. Start a customer retention program. Excellent Customer Retention Strategies: Adopt customer service tools, Apologize when you make mistakes, Inspire with a mission, Empower customers with convenience, Leverage personalization, Speak to your customers, Create a divide between you and your competitors, Use subscriptions to bolster the experience, Use experiences to elicit positive feelings, Capitalize on social proof, Educate your customers, Surprise and delight, Offer support on the right platforms, Thank your customers, Provide incentives before a customer can terminate their membership, Build trust with your customers, Form a community around your product or service, Become part of the customer's lifestyle, Establish loyalty with a one- of-a-kind product, Offer a product or service that solves a problem, but not every problem, Keep things interesting, Use gamification and referral programs. 28 Customer Retention – “Acquire with the intention to retain and retain with the intention to grow” It’s easier to close a deal with a loyal customer and its also cheaper to keep a customer than to reach for new ones. Concepts Customer Retention: Prolongation of relationships over the long term. Customer loyalty: The customer's willingness to return repeatedly. The customer retention management is the process of maintaining relationships with your current customers. The actions that you do are retention actions and you receive loyalty. Engagement (time) VS Retention (you go and you go back) The Prime Targets 1. Profitable Customers - Those who have high CLV. The prime Targets 2. Those who have greatest strategic value to the company. (Luxury) Why is customer Retention/Loyalty important? Delight clients: exceed the client’s expectations, getting wow effects – free bottle of wine, personalize the service. ROI: Return of investment 29 How to retain and keep loyal customers? Step 1: Delight 1. Customer Value is the perception of the balance between benefits received, (product orservice), and its cost. 2. It is essential to understand and meet customer expectations in order to ensure their satisfaction. 3. Creating an effective customer (CX) is to create more than your customers expect. 4. Customer Loyalty is typically due to the delightful or remarkable experiences they have and communication with that brand. Step 2: Retention Strategy 1. Create a Relationship based on higher intensity of participation and plan a communications calendar. 2. Gather, Store and Analyze Data (MIS). 3. The desire for personalization is universal. 4. There are Generational, Gender and Location differences. Younger generations are more tolerant of complex programs. 5. Show Gratitude. 6. Make Memories and Build a community. (If it is possible): People tend/like to remember positives experiences. Making memories around it its like memorable Dates. 30 Step 3: Main Loyalty program tools or Structures 1. Points Customers earn points based on transactions and they can redeem them on benefits. Sometimes combined with a tiered approach. Strengths: Planification, customer understands, easy to create and run. Weakness: Accrued liability (Passive, Financial Audit) - expenses that businesses have incurred, but haven't yet been billed for – e.g. you give points to your clients you have spread points, the reward is 1000€, when are we going to pay this because that are points that are still pending, so you move the points to the next year (finance doesn’t like it). 2. Personalization Focused on data collect across all customer journey to ensure relevant offers. Strengths: Largest efforts towards high-spending customers. Weakness: Customers need to prove themselves first to receive benefits. e.g.: Burberry tracks customer information, social media activity and purchase history online and in-store, in order to deliver relevant buying suggestions. 3. Discounts Strengths: Customer understands, instant, No liability Weakness: Image, Customer future request. 4. Privileges (Upgradings) Strengths: Privileges lead to loyalty, Customer understands Weakness: Other customer can feel insignificant (Blind Actions – send a perfume for the client, like this the other clients won’t know about this). 31 Loyalty in Luxury – Do’s and Don’ts The great thing is that luxury customers display a natural desire to be acknowledged for their high-spending behavior. Unlike with other categories, luxury brand loyalty becomes a status symbol in itself. Do’s: focus on publicity and awareness; focus on exclusive products, services or experiences - additional value or instant excitement (my car means Cristiano Ronaldo…); support existing behaviors. Don’ts: discounts dilute luxury environment How to check if the Program is financially sound? Key Terms Enrollment level: Number of customers enrolled in the Loyalty Programme. Engagement level: Number of customers enrolled and earning points. Redemption rate: Points being redeemed on a reward (6-12 months) Redemption value: Values of rewards Retention and Loyalty Programs 32 Loyalty KPI’s Customer Retention Rate (CRR) is the percentage of customers staying with you over time Customer Churn Rate - Percentage of customers that have been lost over a specific period. In other words, these are the customers that have stopped making purchases. (on e-commerce we check this everyday). Warnings churn rate  Reduced RFM scores.  Problems with website log-in.  Non-response to a carefully targeted offer.  Reduced levels of satisfaction (Survey).  Complaints.  Too many questions about services.  Canceling Subscription. 33 There are at least ten Loyalty KPI: Customer Churn Rate, Purchase Frequency, Time between Purchases, Repeat purchase probability/Rate, Customer Lifetime Value. RFM Analysis 34 Operational CRM CRM Key Technologies 1. Hardware: Server, Laptops, Tablets, Mobiles Other devices… 2. Software: CRM 3. Tools: Social CRM, Mk Automation, Sales Force, Service Mk Marketing Automation Def: The application of technologies (CRM) to support marketing management in their work- related objectives. Functionalities 1. Campaigns or communications events Chanells: Postal, Email, Ads, Phone, SMS, Whatsapp. #trigger_actions 2. Integrated Mk Functionalities Next slide 3. Analytics and Reporting: Kpi and Dashboards. (Last Topic) 35 Integrated Digital Marketing Functionality 1. Social Media: Content Management. 2. SEO / SEM (Quantity and quality of website traffic) 3. Blogs 4. Podcast 5. Apps 6. Online advertising 7. Analytics 8. Survey. 9. Chats. 10. Emails. Marketing Automation Flowchart 1st we analyze the situation, then we have trigger actions. The email can be considered a spam for Google. It can also go to spam because of forbidden words (sex, offers, discounts, Viagra). Rejected = bounce: two types – hard and soft 36 Hard Bounce: Once an email address hard bounces, further attempts to send emails to that address are likely to fail. Trigger actions: we choose another channel and we contact again “could you please confirm your email adress?” The email address doesn't exist. The domain name doesn't have a mail server. The recipient's email server has completely blocked delivery. Soft Bounce: temporary delivery failure. It happens when an email can't be delivered to the recipient, but the issue is likely to be resolved. Trigger actions: we send emails with subjects… The recipient's mailbox is full. The recipient's mail server is temporarily down. The email message is too large for the recipient's inbox. 37 Marketing Automation Benefits 1. Efficiency by replication - Standard Process. (All companies send emails) 2. Productivity launching thousands of campaigns and events through multiple channels simultaneously. Programming 3. Improved accountability by analysing the investment return from activities in real time. Dashboards, Kpis 4. Improved reaction capacity by responding at once to opportunities, even if not part of our Marketing plan. 5. Marketing Intelligence providing valuable management insights into markets, customers, campaigns, events etc. Dashboards, Kpis 6. Personalization / Segmentation 7. Automated Execution and Reporting Best Marketing Automation Software for 2021 Open Rate – percentage of people that open the email Percentage of people who click your email in the total of emails you sent Percentage of people o click on a picture Concept: Opt-in and Opt-out (or permission-marketing) email marketing message usually contains text and a link through to a website to unsubscribe. Most used metrics (KPIs): Open rate - Measures the percentage of delivered emails that were opened. (we send 100 emails, 50 are opened) 38  Click-through rates CTR - Measures the percentage of recipients who clicked on one or more links in the email. (10% of the 100) Click-through open rates CTOR - Measures the percentage of opened emails that resulted in at least one click. (a percentage of the 50 that were opened) Hard-bounce, Soft-bounce Spam, Robinson (Europe) – it’s a list where people that don’t want to receive communication add their names. Others… Software and tools: Choosing the right CRM The software provides relevant information to your marketing and sales departments, allowing your teams to make strategic and profitable decisions. Software: PMS – property management system, CMS – content management system, ERP – enterprise resource planning, CRM, Social Media, etc. Choosing the right CRM is a complex task. It involves many company departments. No CRM is better than another, it all depends on the needs of the company, its business model and the budget available. Top 3 market share positions remain to be occupied by Salesforce, ZOHO and Monday… 39 Software in the Cloud or on Premise? Premise – when you buy the car, everything in the car depends on you. In the cloud – is like renting, someone takes care of your car, any problem we just have to call and it will be fixed. On PREMISE Software: Systems integrated with existing IT hardware. Customer data will be behind the business security (e.g. Firewalls) Health Companies, Governments, Banks, Security. Software in the CLOUD: A network of servers through the Internet. Companies do not own the software; they pay a subscription for each employee and use the software online. Based on SaaS (Software as a Service). What option do you think is better for a restaurant? (Software in the Cloud or On Premise) 80%-90% -> In the Cloud - “My family owns a restaurant in Dubai. Some politicians and important businessmen have lunch there, clearly software on premise.” What features we need to take into consideration? (EXAM: why is dashboard important?) - Company size - Free version – sometimes you don’t feel comfortable using a software so it is important to try it before subscribing - Social media integration – is important because you get to discover who is your buyer persona, you discover what channels we should push more 40 - API (Application Programming CMS Interface - set of programming Social protocols and tools that specify how PMS your CRM can interact with other software programs) – we need to CRM connect our systems for the Others ERP information to cross information. - Dashboard (a single screen that shows all of the functionalities) – here the KPI appear - Import/Export Data - allows for seamless data transfer between the CRM and other systems, facilitates data backup and recovery, and enables data analysis and reporting. Importing data helps in adding new records or updating existing ones, while exporting data is essential for sharing information with external parties, creating backups, and conducting analysis. Additionally, it supports integration with other business systems, streamlines sales and marketing activities, and ensures regulatory and statutory compliance for import-export companies. - Sales opportunities - Email – is a campaign - Automation – one by one based on TRIGGER actions. It enables the automation of the entire marketing process, including highly customized content for users, lead scoring, and advanced workflows. - Cost – related to the company side Gartner: Resource for executives to get objective and actionable insights to help business growth – software. Gartner is a provider of research and consulting services for businesses in the IT sector, working with organizations to develop technology strategies, plans and budgets, as well as select the right technologies for their operations. 41 Magic Quadrant The Magic Quadrant illustrates the different technology providers for making a specific investment or purchase decision. Sales Force CRM Salesforce is a CRM (customer relationship management) solution that gives all your sales department a single, shared view of every customer. You can manage your business from anywhere, connect with your team, thanks to the Salesforce Mobile App. Log calls, respond to hot leads, work deals, and monitor the health of your business no matter where you are. Products: - Sales - Service - Marketing - E-commerce - Analytics - Integrations - Customer 360º. 42 ZOHO CRM – good option for small companies Zoho CRM is an online Sales CRM software that manages your sales, marketing and support in one CRM platform. What is Zoho CRM? Zoho Corporation, is an Indian software company with headquarters in Chennai. The company was founded in 1996. Zoho One is an integrated system, a unified suite of applications, a workplace, to transform business activities into a connected activities. HubSpot American developer and marketer of software products for inbound marketing, sales, and customer service. Hubspot was founded by Brian Halligan and Dharmesh Shah in 2006. 100K Customers in 120 Contries. Revenue in 2020: 883 Millions $ 5895 Employes 43