In our last post on email marketing for retailers we talked about the commitment to a meaningful customer value exchange. That means your brand is going beyond asking a customer to join your list to receive “special offers” which are given to everyone, which can easily be done via in-store signage announcing the same offer. The exchange entails the customer providing you with their email and you, the brand, committing to give them something of real value, such as access to a limited product offering that the public does not have. Now the opted-in customer feels special, feels happy, feels like they have done the right thing. Brands need to use email to continually make the customer feel special, and not like just another email address receiving just another email blast.
A brand that has a customer strategy in place, supported by an articulated customer value exchange, needs to use these to grow and retain their customers. This is done by establishing a customer’s baseline behavior, setting their lifecycle direction and then measuring action and success. Blind investment into providing a customer value will make them happy, but this approach does not work if it loses the brand money. A brand that lacks an understanding of their customers must establish a set of baseline behaviors that will tell us what they do today. When we know this, we then need to use this to determine what we want them to do next. This is what we call their lifecycle direction.
Here’s what I mean. Suppose a casual food restaurant has a successful bar and dining business that they wish to continue to grow. They can market to their customers by blasting via all channels with a message like “come in more!” yet this will not really be meaningful to anyone, nor will it be effective. Using email well, the brand can target and measure based on a customer’s behavior and their expressed opinion.
The baseline behavior can be established by measuring response to email as a whole, by the specific offers clicked on and downloaded, and by actual follow-through usage of the offers. (Note, usage can be measured via integration with the POS and payment system, yet it can also be done with collection and tabulation of paper based offers.) This will enable a breakdown of customers by their behavior; the below graph shows a simple example illustration of this:
100K Customers | Light | Medium | Heavy |
Bar (60%) | 40K | 15K | 5K |
Dining (40%) | 15K | 13K | 12K |
In this example a Heavy customer is more valuable than a Medium customer, who is more valuable than a Light. Bar customers are less valuable than Dining and their behavior and product make-up are quite different.
Now that we have this baseline behavior understanding of our customers, what do we do? What is the next best offer that we should give them? What is their appropriate lifecycle direction? We would like for all our customers to immediately become heavy dining customers, but this not practical in that it is too big of a change for most. A customer’s migration through their lifecycle is typically made up of numerous stages, each being a small change or step forward vs. a large leap. The lifecycle direction plan for our casual food restaurant example could start a positive migration in visit frequency (light to medium) being easier, and visit type (bar to dining) being harder.
Within this framework there are numerous variables, such as time of day, day of week, number of people in party, etc., yet the goal is to grow incremental behavior and, once a new level has been reached to maintain it going forward. Obviously there will be ebbs and flows in behavior, but now we have a means of generating insight, testing offers, targeting our marketing efforts and measuring the results and effectiveness.
Email is a critical component within this plan. It is fast, flexible, targetable and measurable. We can use it to help establish our baseline behavior and to migrate our customers along their lifecycle direction, using a mix of primary, and secondary offers along with articulating the relevant value exchange. Anything else is a monologue when it's a customer dialogue that counts.