In a perfect world, your customers would begin their relationship with you at a high level of product usage and engagement. Then they would maintain that level or move quickly into your coveted best-customer category. But in reality, customers may enter at low or high usage thresholds, and may or may not expand their relationship and increase their engagement with you over time.
The good news? There are concrete steps you can take to help your customers move up the usage and engagement tiers, no matter their current "location."
- Analyze Your Data
The first and most important step in customer migration theory is to dig deep into your customer data—reviewing at least the past two years of transactions. Consider customer lifetime value scoring, RFM reports and cluster analysis as must-have modeling.
The objective is to answer, at the minimum, these types of questions:
- What are the current patterns of customer movement?
- What are the reasons for the current migration trends?
- What customer categories are in place right now (for instance, Growing, Maintaining, Low Value Seasonal, High Value Lapsed)?
- What categories appear to have the ability to migrate upward, based on availability of share of wallet?
You may want to supplement some additional customer research, such as focus groups, to get a strong feel for your current migration patterns.
- Create Your Customer Migration Goals
Once you have a solid understanding of your current customer data, consider exactly what you want your customers to do, in specific terms. For instance, you may want a High Value Lapsed customer to engage with you again within 30 days of becoming lapsed.
Also think about the favorable behaviors that customers in your categories are already exhibiting. How can you encourage that behavior to happen more often?
You'll want to set a reasonable timeframe for achieving your goals, too. Keep in mind, though, that you may not be able to advance customers as rapidly as you like. As in any situation where you are attempting to change customer behavior, it takes time.
- Determine Relevant Communications and Incentives for Each Category
Keeping customers informed is critical to keeping them engaged, using more products and climbing up the tiers. Make sure to send all members regular updates on what's new and what benefits various products and services offer.
In addition, you'll want to create a distinct touchpoint strategy for different customer types. After all, you'll be talking to your best customers differently than you will to Low Value Seasonal customers. In addition, your communication plan should include trigger-based messaging. For instance, if a customer tends towards only small purchases, they may receive a special offer nudging them towards bigger expenses. Or a customer who recently made had a significant purchase may receive a message related to more items from that product line.
Finally, be sure to create a plan to reward customers who modify their behavior in the way you want—by increasing purchases, product usage and engagement with your business. That's the crowning touch on a customer migration plan that can reap outstanding ROI.