Customers today are on the look-out for deals that work best for them. They favour the medium that provides them with the most viable, personalized brand experience. They don’t shy away from voicing their opinions online, on social media, blog sites and consumer forums, and leaving their digital footprints all over the Internet.
To overcome these challenges and stay competitive, digital marketers need to focus on the following key areas to ensure they are constantly enhancing their customers’ digital experiences.
Building long-term relationships with customers
As a general rule of thumb, the cost of acquiring a new customer is around five times higher than retaining an existing customer. The customer relationship therefore needs to extend beyond just a one-time transaction or a pre-defined process.
To build long-term relationships with their customers, it is crucial for organizations to assemble the right talent, tools and richness of data to gain a 360-degree understanding of their customers. Being aware of aspects such as customer lifetime value and the stage of the customer lifecycle a person is in – and, with that, their propensity to churn - are part and parcel of achieving such a holistic view of the customer.
Organizations need to be attuned to key drivers that impact customer behavior. Only then can they formulate and implement proactive customer strategies rather than constantly being on the back foot. However, it is not just about understanding customer behavior, needs and priorities but, more importantly, of drivers of “delight”.
Since customers all have different needs, preferences, income types, mindsets, personas and demographics, “one size fits all” marketing is no longer a viable approach. Customers are far more likely to opt for, and remain loyal to, a platform that caters to their specific needs and treats them as individuals rather than one that markets to them in a more wholesale way.
In order to provide a personalized experience, identifying the key drivers that impact customer’s likelihood to churn is critical. Companies such as Netflix are improving their algorithms to obtain better insights into viewer preferences and interests, and are experimenting with more efficient recommendation lists. The objective is to avoid churn by opting for personalization, which will make the service ‘stickier’ than simply offering suggestions based on a genre or an actor.
As customers go through a typical life cycle - from pre-sales engagement to sales, fulfillment, consultation and renewal – their needs differ in each stage. A disconnect at any point in the life cycle can give rise to customer dissatisfaction and affect the company’s brand image in a big way. From sales to customer service, including external partners in the supply chain, all touch-points have to be organized to provide a unified customer experience.
Big Data analytics to the rescue
To stay ahead, companies need to actively listen, analyze and respond to this flood of customer data pouring in non-stop from all sorts of online and offline channels. They can explore historic customer data from surveys, reviews, comments and service interactions, as well as real-time feeds of customer click-streams, social posts, call centre interactions, geospatial coordinates, and other behavioral data.
Armed with the right tools, platforms and talent, digital marketers can leverage the ever-growing volume of structured and unstructured data – popularly known as ‘Big Data’ – to derive valuable customer insights for promoting a positive customer experience, consistently.
For instance, by using discrete choice regression models to identify drivers of satisfaction and predict customers’ propensity to churn, companies can identify which customers should be targeted in the first place. Predictive modeling techniques can be used to help with personalizing the approach during the renewal process. In the digital space, parameters such as click rate, traffic and bounce rate could be monitored throughout a customer’s lifecycle in order to evaluate the overall ROI, and also the propensity to churn or stay loyal. Exception analytics should be set up to monitor customer service interactions and also to identify which outliers need attention. Text analytics can be applied to identify customer sentiment. Omni-channel strategies can show the preferred path taken by consumers that result in a sale.
In the end, what it boils down to is that Big Data can help marketers see their customers as individuals and cater to them uniquely, throughout the customer lifecycle.
As the pace of business and customer life cycles continue to accelerate, digital marketers need to remain agile, and willing to test and fail fast. However, rather than ‘flying by the seat of their pants’ they can stay in control by embracing the right man-machine combination – a blend of technology platforms and human intelligence – enabling them to develop a culture of data-driven decision-making to drive their business.
By Shikhar Vaibhav, Engagement Manager at Mu Sigma, and Vivek Malhotra, Associate at Mu Sigma
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