Lights Out Marketing

Here at Customer Portfolios we’re feeling a little more than vindicated about our bullish view on e-commerce lately. Today comScore issued a report that shows 4 out of 5 US internet users visited a retail site during the month of November. For some categories such as consumer electronics, that’s a 33 percent jump over 2008. Overall holiday business was up four percent online, which is a good number considering the economy. According to a report in The New York Times on January 7, The industry collectively turned in a 2.9 percent year-over-year sales increase at stores open at least a year, according to Thomson Reuters. Some 75 percent of retailers beat analysts’ estimates — the most companies to do so since March 2007. Several retailers — including Macy’s, Nordstrom, Aéropostale, TJX Companies, Ross Stores, American Eagle Outfitters and Limited — expressed their growing confidence by raising their earnings estimates.

 
Here’s why we feel vindicated. This number, and some other success stories show, that it is customer engagement that will attract and keep customers. If a consumer visits a retail website, it’s because they are researching products, reacting to a brand or simply engaging with the retail brand experience. In our experience, consumers do not go to a website to earn points on a retail entitlement program. And it is not in the retailers best financial interest to push a loyalty program online when that program may or may not generate incremental business. Retailing is about excitement over entitlement. Look at Amazon (of course), which did not log its best holiday season because of a loyalty program, but because they did a great job using a new product (Kindle) to drive traffic and generate excitement.

The companies that do well in e-commerce understand that the future state of customer loyalty, behavior-based customer loyalty is based not on predictable behavior from the customer and the company, but on breaking the predictable patterns from the customer and appreciating those most valuable customers with exciting experiences, goods, and or services. Customers should not do the math or even understand the math around customer loyalty programs, they should be excited by them.


The ability to execute exciting loyalty programs depends on a customer command center, which must go beyond feeding simple revenue transactions. It needs to define and measure the more subtle ways in which customers share information and how often they touch a brand across all channels. Customers may sleep but customer information never rests. That’s where the goals of the company need to meet and use the wealth of information.

Here at CP we call this constant customer information “Lights-Out” marketing.  It can automatically execute programs that are relevant to the customer and more importantly relevant to encouraging and rewarding behavior that syncs with the companies marketing and sales priorities at that moment. Lights-Out programs will be executed if there is just one customer that meets those criteria or a million. The programs will be targeted even as the customer grows and their behavior modifies or the loyalty behavior changes. The integrated command center is a closed-loop marketing architecture that automates triggered programs and optimizes the relevance, frequency, and timing of marketing communications.  As stated earlier, customer information is easy and common. Using it to encourage profitable behavior is an art and a science.