Leveraging Customer Data: How a Cable Company's Failure Can Help You
According to Forbes, approximately 5 percent of cable subscribers leave annually. This is being exacerbated by the introduction of new ways to access the same content. Subscribers are “unplugging”, requiring only an internet connection to watch their favorite programs. The competition between companies to add subscribers is intense, so poaching them from the competition drives a lot of communication. Customer loyalty in this environment is key.
What’s a modern marketing person to do? The easy answer is leveraging customer data to make the interaction something that’s both personal and relevant. We have the technology and the channels for communicating in a personal way because we know so much more about our audience. The trick is always in making sure every part of the customer journey leverages the same robust data, so the experience can be seamless and consistent.
The loyal customer is the best customer! From any company’s perspective, and certainly from a cable company’s, longevity, LTV increases and cost to support decreases with every year of loyalty. Yes, the competition will beat at the door, but the loyal customer doesn’t listen. In the case of a cable the best customer is also one that is resistant to change and probably still wed to watching cable, as opposed to using the newer ways to reach content. And, like me, they may just have higher priorities and think of this change as a hassle. As any social scientist will tell you, I suffer from status quo bias. And I KNOW my cable provider knows this about me. Most people wait until the contract expires and leave for lower prices. Even bombarded by better offers, I never did that.
Acquisition marketing works though. I’m guessing I received at least one solicitation per week from the competition and one of the “new” offers caught my eye. So, five months ago I called my cable company to say I would be switching providers based on price. I told my current provider that I was paying twice what the competition was going to charge me. I offered them the opportunity to come up with an alternative. Well, the cable company couldn't come up with anything to keep me. I was speaking with someone in customer service who had my records, “knew me” and my habits, or should have, and nothing could be done.
Fast forward five months when I finally get it together to switch. Yes, as I said, part of loyalty is just complacency. I’m busy, so I just couldn’t find the time to call the competition, or go online. Fortunately, waiting got me an even better deal. But now it’s time to officially cancel with my old company. I make the call to the same customer service line, and it’s as if the actual date staring them in the face makes them realize that I've been with them for 14 years!! This is a very important piece of data about me.
Suddenly, my loyalty means something. Out of thin air comes a competitive offering. The realization of that 14-year loyalty has triggered the realization that if they can avoid the switch now, they can probably rely on me to continue for another 14 years without asking. It’s too late, but now there’s a serious effort to avoid the churn.
This is an issue of data management. They’ve had my history, but it’s either unavailable to certain screens or it’s not something that’s prominent in the field of view for the call center. It’s the question of when one piece of data is important enough to make it top of mind within an organization, for a particular customer. I don’t think this is an issue of data availability, because I assume they knew I’d been a customer for 14 years during my first call. It may be, however, that it’s only available to those at the “crisis” part of the call center.
Data management is the process of controlling the information in such a way that it’s most useful. There’s no way to generalize a solution to data management for an industry or particular company, but there are things you can do to in managing your data to avoid missing the opportunity to keep your customers.
- Data consolidation: Easier said than done, but if you want to leverage data throughout your organization, building the database to have a consistent and complete picture of the customers is “central” to being able to make the customer experience better.
- Data availability: Marketing technology and channel expansion are a blessing a curse. We can now know someone has tweeted about us, but can we make sure that information is included in our data? Facilitating real time connections between channels to the data and then data back to the channels gives us the ability to listen and react, but also be proactive from what we learn about our customers every day.
- Testing: Even with the central database and connectivity across channels, how do we know what data is important. Well, we learn. We learn by testing. We need to dive into the data, see how our customers react to its use. Refine the particular pieces of data that give us the best results. Try again.
The promise of all this customer data is better personalization and better customer experience. It could be that if I’d gotten thanks along the way for my continued loyalty it would have made a difference, but it certainly would have helped to have my loyalty recognized at the first sign of trouble. The peril of not leveraging the data, particularly when it comes to loyalty where you have the most robust customer data, is the loss of the customer.
John Sisson is the President of Westwood, Mass.-based Wilde Agency, an agency that creates digital marketing and direct marketing powered by behavioral science to drive superior results for leading brands.