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 GREEK PHILOSOPHER PLATO ONCE DESCRIBED A CAVE
where prisoners could only see shadows projected on the wall in front of them, never able to turn around and see the real objects creating those shadows. They could not see the path out of the cave into reality.
Likewise, today’s marketer can often feel shackled inside a cave of assumptions, especially during annual planning (some of us are literally shackled until we’re done). In an ever-changing climate, it’s difficult to see the real nature of your customers that will frame a sound marketing strategy. Mounting pressure to justify marketing budgets doesn’t help either when you’re working in the dark.
To adjust a phrase from Plato’s mentor, Socrates, the unexamined marketing plan is not worth living out. Now is a critical time to break free from old habits and uncover realities that can translate into more robust, results-driven customer initiatives. |
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Know thy customer
Only a plan backed by true customer insights will stand a chance at success. Before planning new initiatives to maximize your customer relationships, first it’s important to know how strong those relationships are. For instance, do you really know:
> How loyal customers are to your company?
> How likely they are to purchase additional products and services?
> If they speak well of your company to friends and relatives?
First Marketing conducted its Relationship Index survey (a proprietary tool for measuring customer bondedness) with more than 11,000 customers from 20 companies across several industries. Some of the findings are highlighted in the chart below. Many participating companies were surprised by the results — like the fact that technology faces more loyalty challenges than other industries; that relatively few healthcare customers feel they get adequate education; and that financial services firms are champs in garnering referrals.
| Speaking up: First Marketing Relationship Index |
Customer Feelings
Toward Company |
Aggregate
for All
Industries |
Financial |
Healthcare |
Technology
(Cable &
Wireless) |
| Communicates effectively with me about products and services |
53.4% |
54.6% |
30.4% |
55.9% |
| Listens to and cares about my needs |
50.7% |
53.9% |
71.5% |
41.4% |
| Makes me feel valued and appreciated |
48.3% |
50.4% |
54.8% |
42.8% |
| I enjoy doing business with them |
54.6% |
56.8% |
62.8% |
47.8% |
| Would recommend to friends and family |
62.2% |
72.7% |
60.5% |
48.2% |
| Percentage rating 5 or 6 on a 6-point agreement scale, where 6=completely agree and 1=completely disagree. Results from surveys conducted from 2004-2005. |
But what all companies learned is that knowledge is power. By taking a closer look at customers’ attitudes and beliefs, they could address fact, not fiction, and initiate effective changes more quickly. Getting inside your customers’ heads — whether it’s through surveys, customer advisory panels or other sources — lays the groundwork for a fruitful relationship. Establishing a benchmark will help you gauge improvement over the long term. |
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 Target your messages
When putting together your annual marketing calendar, remember that less can indeed be more — when you have
a focus. Drilling down to customer segments and even further to individual profiles will give you a clearer picture of your target audience, and allow you to apply the appropriate message and communications vehicle. Psychographic research — attitudes, lifestyles, values — and media usage preferences can be combined with your own treasure trove of data on specific customer purchase behavior and response habits. Identifying your most receptive customers and their aptitude for future purchases allows you to focus your cross-sell/upsell efforts where they count. This more targeted approach may require more investment on the front end, but will pay off with improved ROI on the back end.
Seek ongoing improvement
With each touchpoint in your marketing plan, you have opportunities to gain feedback and learn more about your customers. Create interactive exchanges that focus on your customers’ needs. Listen to them and view complaints as another chance to learn. Give your customers their choice of communications vehicle and the ability to customize their experience. But know that customer expectations are high when you request information. In this age of TiVo and on-demand everything, savvy customers desire a higher level of attention from you with personalized service, offers and “thank-yous.”
This continuing dialogue feeds and improves your marketing plan — if you measure your success. Proving the value of such efforts weighs heavily on the minds of marketers. Accountability ranked
as their top priority in an annual survey by the Association of National Advertisers (ANA). And yet, measurement has remained elusive. According to a CMO Council Survey, 80 percent of VPs and higher say they don’t have formal marketing performance measurement systems. Although they are willing to spend more, senior marketers currently dedicate less than 2 percent of budget
to measuring effectiveness. Without investing in the knowledge of what really worked and what didn’t, you risk wasting even more money on ineffective programs that don’t resonate with your customers or your bottom line. |
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Consider new approaches carefully
In a constantly changing market climate, you do need to adapt and apply new ideas. As Albert Einstein said, “The height of insanity is doing the same thing over and over, and expecting different results.” However, the bulk of your marketing budget, 75 to 80 percent, should be spent on initiatives that are proven for your customer base. The remaining budget should finance well-structured experiments of new methods and messages — before those ideas are rolled out en masse. By constantly testing, you won’t be forced to assume a large risk on unproven programs when markets shift.
A marketer’s life isn’t easy, especially during annual planning. The pressure to produce higher ROI is greater than ever. But through careful examination of your customers and more targeted initiatives, you can rise to the challenge for effective marketing. Socrates would be proud. |
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| Jon Sumple is Senior Vice President of Client Development at First Marketing. He spends a lot of time asking clients “What’s missing in the marketplace today?” and simply listening to what they have to say. Jon can be reached at
jsumple@first-marketing.com. |
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