What Customers Want: Retention and Loyalty Strategies

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1 What Customers Want: Retention and Loyalty Strategies By: Amy Danziger Shapiro V12 Group Inc. Philadelphia, Pennsylvania Presented at: ACLEA 48 th Annual Meeting July 28-31, 2012 Denver, Colorado

2 Amy Danziger Shapiro V12 Group Inc. Philadelphia, PA Amy Danziger Shapiro is the Vice President of Business Development for V12 Group, a database management and marketing services firm. She is a recognized expert on marketing and communications through digital and social media marketing. Amy has lectured on marketing legal services to busy professionals through traditional and non traditional mediums for many years. In addition to her work with V12 Group, Amy is currently the Director of Sales and Marketing for JDCLE. Until recently Amy held the position of Director of Strategic Marketing at American Law Institute American Bar Association (ALI ABA) from 2006 to Prior to that she was the Assistant Director of the American Law Network, the satellite and web cast network of ALI ABA. Since beginning her career in legal services and education in 1991, Ms. Shapiro has held positions as the Director of Continuing Legal Education for the Center for Professional Education (CPE Inc.), where she developed and marketed seminars for both attorneys and CPA's, the Mid Atlantic Regional Sales and Marketing Director of SMH Bar Review, and the Regional Sales Director for WEST BAR REVIEW, a division of WestLegalEdcenter. Ms. Shapiro is a member of the Association of Continuing Legal Education (ACLEA) and the Legal Marketing Association Metro Philadelphia Chapter. She has held multiple positions within ACLEA including member of the ACLEA Executive Board as Director At Large. She has been a guest lecturer for ACLEA, Peach New Media and other professional organizations. She has lectured on a range of marketing topics including Recent Trends in Technology in Continuing Education, Social Media Marketing and Communications and Marketing Planning. Furthermore, Ms. Shapiro has acted as a consultant on social media marketing for the Institute for the Study of Business Markets at the Smeal College of Business Administration at Penn State University. Ms. Shapiro holds degrees from the University of Pittsburgh and Widener University School of Law. Connect with Ms. Shapiro on LinkedIn or Twitter.

3 The average business loses about 20% of its customers a year. This happens simply because the company or organization fails to maintain a customer relationship. Often, more time and money is spent building new business instead of concentrating on existing customers. This lack of communication and attention contributes to the attrition rate and can cause significant financial harm. Your current customers are your best customers. They have already bought into your brand and if they have had a good experience with your company they will spend again. Also retaining customers is easier and less expensive than getting new ones. Presumably you have information about your customers that is of value to your company, for instance, buying trends by spend and product as well as, other demographics. This is information that you will not necessarily have about prospects, making it easier to tailor marketing messages to your customer. Therefore, it is important in every business to have a strong customer retention strategy. Below are a few suggestions that can be used in building a customer retention strategy. 1) Maintain a Database. Create and maintain a database of your customers and their details including their purchase history. In addition to address and purchase history, other demographics to consider are addresses, date of birth, gender, area of practice, MCLE deadline, total credits taken, years in practice or size of firm/organization. Having as much information about your customer as possible is extremely valuable. The more you know about you customer the better you can market to them and develop relevant products. With a clean and robust database you will be able to identify your best customers, how they spend their money and on what. Gathering information about your customers is the way to directly connect to their feelings, attitudes, buying intentions and preferred method of communication. It is also essential to have this information to run a successful marketing campaign. Today, customers are used to receiving multiple forms of communication from a vendor. , direct mail, phone (mobile and landline) as well as social media are all methods of communication that you should consider in order to maximize your return on marketing investment. Therefore, having all the contact information possible for your customer including , mail and phone is just as important as having the demographic information. It gives you the option to multi-channel market. Appending your Database: Gathering demographics and contact information can be a struggle, especially if you are a business or organization that has been around for a while and the customer database you have was not initially set up to gather that information. There are multiple ways to do collect this information and all of them are worth your while. The simplest way is designing your registration or purchase forms so that the information you want from your customer is asked on the form. The same can

4 be done with an online registration system. Another effective way to collect demographics from customers, especially existing ones in your database, is to ask them a question or two each time they interact with your company. For instance, when they log in on your site or call on the phone have a system set up to ask the information you need. If you do not have the staff or time to collect the data yourself you can outsource it. A data service provider can accurately append your data with needed demographics and contact information adding valuable information to your existing customer file that will help you create multi-channel targeted marketing campaigns. A good data service provider will provide you with multiple data fields to choose from including personal information like geographic, demographic, lifestyle, interest and behavioral information as well as business information like firmagraphic, size of firm, area of practice and title. This will allow you to better define your audience and provide you with a targeted approach to increase cross-selling/up-selling opportunities and drive customer retention. When you outsource something like this to a data service provider it is important to make sure that it follows the Direct Marketing Association (DMA) standards in data collection, the data is clean and accurate and the service is affordable. It also should be simple. Your data will be matched with the data service provider s data and in some instances outside sources. All matched data should be appended and quickly sent back to you in your original format. When appending with s before they are sent to you as good s they should be sent a permission pass from the data service provider. Only s that have not opted out should be appended to your data. This guarantees you are getting good s and will give you a higher return on investment. Many data service providers not only provide you with appending options but they can also help you identify prospects through customer profiling once your data is appended. Customer profiling helps you identify your best customer from your existing data and assists in increasing your reach to new business. It is an affordable way of killing two birds with one stone. 2) Communicate with Your Customers through Multi-Channel Marketing: Staying in touch with your customers by phone, direct mail or is vital to maintaining a relationship. Regular newsletters or s providing information about new products or special offers are a great way to let your customers know you are thinking of them. Personal phone calls are also a nice touch, especially for your more loyal customers. Social media can also be used to stay in touch or engage your customers. Furthermore, multi-channel marketing and communication can also drastically increase your return on investment.

5 Communications to customers do not need to be limited to sales attempts. Direct communication can also be a way to inquire if your company or organization is meeting the expectations of the customer or if there are any services that can be provided. Customers appreciate the ongoing communication and the ability to provide input to a company that they trust. A rolling calendar of communications that includes a sequence of letters, events, phone calls, thank you s, special offers, follow-ups and even birthday cards or notes with a personal touch etc. that occur constantly and automatically at defined points in the pre-sales, sales and post-sales process can help build a customer relationship. This can be done through a calendar of communications or trigger s. Trigger s are sent automatically when a transaction occurs. According to the Q North American Trends and Benchmarks Results survey, recently released by the Direct Marketing Association s Experience Council and Epsilon, triggered messages had, 96% higher open rates and 125% higher click rates than business as usual (BAU) messages. These benchmarks were compiled from over 51 billion triggered s sent across multiple industries during One reason why trigger s are so successful is because they happen in real time and they are highly relevant. In addition, the more triggers you have per individual, the more frequently you can send them a highly relevant promotion. People not only respond to this positively they also feel valued and listened too. Remember, the communication that you send does not necessarily need to be a sales pitch, but it doesn t hurt to send one. Many people drop the ball once the initial purchase is made. But the truth is your selling has just begun. Providing your customer with the opportunity to purchase from you again and again and encouraging them to do so, only increases their confidence in your company or organization. Not only do repeat sales come from that effort but also referrals and positive reviews. Knowing when and to whom to send trigger s is where data services from the right data services provider can come in handy. An data service provider should be able to provide you with an accurate customer profile by appending your data and then help you identify multiple triggers for each individual. and Social Media Communications: Communicating with your customers has become more and more popular through and social media. In many cases it has become a primary source of communication when a transaction is made. marketing in particular is used to confirm transactions, provide account summaries, send newsletter or news and to promote products to a current customer. Furthermore social media is often integrated into promotional s and way to spread the word to outside sources. But how is and social media used effectively in customer retention. There are a number of articles and resources out there that provide guidance. I recommend the following articles and resources:

6 V12 Group, Resource Center, V12 Group, Social Media Resource Center, James Trumbly, Building Customer Loyalty with Segmentation by James Trumbly, May 16,2012, Meghan Anderson, 3 Awesome s to Increase Customer Retention, July 11, 2011, Customer-Retention.aspx Debra Ellis, Customer Retention: The First Pillar of Social Media, April 25, 2012, The bottom line, your customers are you best resource and communication with them can be an asset to your company s reputation. 3) Win Lost Customers Back: It doesn t make much sense to dedicate money and resources to bring in new business when a large percentage of your old business isn t repeating. It would make better sense to put the time and effort into winning those customers back and getting them in your good graces again. It is so much easier to reactivate a customer who knows you and at one time bought into your brand. You just need to provide them with the right offer and do it the correct way. Sending out a questionnaire or survey to your previous customers to find out why they aren t buying again and then tailoring something to them that would satisfy them is a great way to win them back. Not only does it demonstrate you want to provide a service they need it also demonstrates you care about your customers. When creating an to win-back your customers you want to make sure that you do not turn them off again. You want your communication to generate revenue in the long run but you do not want to sacrifice this fragile relationship. Therefore you should consider the following when sending an Best Practices for Customer Win Back & Retention s, March 31, 2012, marketing- ebook/best- practices- for- customer- win- back- retention- s.html

7 1) Subject Lines should reduce stress on urgency, be characters and be personalized. 2) HTML s should: a. Have few images, b. Optimize the top three inches c. Maximum width should be 600 pixels d. Two columns e. Don t trap call to actions in images f. Easy unsubscribe g. Follow Can-Spam rules h. No Coding i. Formatted Text j. Formatted Links k. No Dark Backgrounds with Light Fonts l. Include Social Sharing 3) Content should be: a. Short b. Lots of Navigational Links c. Contact Information d. No Spam Words e. Personalized f. Segmented list, content and customer state g. Include Terms and Conditions 4) Offer the Best Product or Service You Can: Staying in line with the saying Put Your Money Where Your Mouth Is by providing a high quality service or product that you believe in and support is essential. When you offer the best you can and stand behind it your customers will want to return. A good experience with a company leaves a lasting good impression. After all who wants to pay for bad or inferior service? And since information good or bad can be disseminated so easily and within matters of minutes in this digital age, making sure a positive experience is what your customer has is even more important. It is also important to integrate excellent customer service into your brand. Too infuse brand standards throughout your organization you should train anyone who touches a customer to provide a good customer experience. Furthermore, anyone developing products in your organization should be familiarized with your companies brand standards and should be required to uphold those standards in product development as well.

8 MarketingProfs.com has an article title Customer Service Can Make or Break Your Brand: Eight Steps for Success" 2 that breaks out simply how to do this. They are: 1) Recognize a product is only as good as the customer experience 2) Attempt to anticipate and address potential problems 3) Provide customers with recourse in the event of a product failure 4) Treat customers with respect 5) Empower employees to take corrective action 6) Set expectations 7) Attend to your social media outposts 8) Follow up for continual improvement 5) Create Loyalty Programs: Loyalty programs are great way to entice customers into repeat business. Loyalty programs can be discounts or points for purchasing. Adding value to a purchase for a repeat customer is another loyalty option. Including a whitepaper, book or article with a purchase or bundling a few courses together at a lower price are a few options. Either way it is not about how expensive the add-on is it is about the fact that it is exclusive to your customer. MarketingProfs.com offers two suggestions in its article Keeping Loyal Customers Loyal. 3 Granting VIP status or giving rewards at a certain level provides an exclusive feeling to the customer and keeps them loyal to your product. Customers want loyalty programs and they look for ones that are good and reliable. The problem is that a lot of companies do not do enough to really follow through, so loyalty programs are often met with skepticism. Because competition has been getting fiercer, companies need to differentiate themselves and try to do so through the quality of their products and added value. Customer loyalty programs add value but only if they are good programs that engage and make the customer happy. 6) Welcome Complaints: Every company wants to avoid a complaint from a customer. A complaint inherently means that you are not meeting the expectations of your customers. But a complaint could be a good opportunity to demonstrate to your customer that you do care about their business and that you do want to provide the best service possible. It is a way to gain feedback and improve your business strategy. 2 Barbara Bix, Customer Service Can Make or Break Your Brand: Eight Steps to Success, August 22, service- can- make- or- break- your- brand- eight- steps- for- success 3 Keeping Loyal Customers Loyal, April 18,2012, articles/2541/keeping- loyal- customers- loyal

9 Furthermore, it shows new customers that you hear what your customers want and it may incentivize them to do business with you. Overall, your current customers are your most valuable asset. They are already familiar with your brand, have determined they need your service and inherently want to dedicate themselves to you and your business. Figuring out and understanding their needs, providing high-quality products that fulfill these needs, maintaining communication and adding value are key to maintaining these valuable yet fragile relationships.