Data Driven: Plan to Retain
In September, I presented the first part of a two-part column series exploring how a coordinated multichannel approach can lower the cost to obtain a customer, while increasing sales, retention rates and profit margins.
My column, "Ignore the Org Chart" explored the concept of integrating the online and print marketing channels from a customer acquisition perspective. This month, I'll dive into contact planning as related to customer retention. Regardless of channel perspective, converting new customers into repeat customers remains the most valuable contact strategy method available.
New vs. Repeat
We all know the numbers. It is far more profitable to contact existing customers compared to acquiring new ones. In certain industries, existing customers out-pull new customers by a 10-1 margin. Prospects equal costs, while customers equal profits. So, why is so little planning devoted to a common multichannel marketing approach for existing customers?
A recent comScore report highlighted the complementary aspect of a multichannel approach. Customers who received a mailed offer and subsequently purchased online spent 72 percent more over the next 12 months than customers who purchased online but were not contacted through another marketing channel.
Interestingly, males showed an even stronger response to the print channel than females. And, contradicting conventional wisdom, the younger age brackets were multichannel responsive. Individuals between the ages of 18 and 29 spent 41 percent more if they were contacted through the print channel and ordered online than those who ordered online without a print channel contact.
Multichannel Contact Strategy Blueprint
Using industry benchmarks, despite the considerably higher advertising cost associated with the print channel, the bottom line increases 5 percent and net sales go up 72 percent with a multichannel contact strategy.
So what does a best-in-class multichannel department look like?
• It is organized around product or service categories, rather than marketing channel. Budgets and customer contact plans are created around these same categories, rather than channel.