TechWeb, a division of United Business Media (UBM Tech) recently released a comprehensive white paper sponsored by IBM, titled, “The State of Customer Analytics: Taking a Proactive Approach to Loyalty & Retention”. The white paper explores how customer analytics can increase customer retention and minimize defections through optimally timed, personalized retention offers while significantly improving a company’s bottom line.
Most companies have vast amounts of data about their customers, but have trouble sorting through it all to make meaningful decisions. New analytic tools are becoming available that make it possible to do this.
By using customer analytics to create 360-degree consumer portraits, and then personalizing communications, companies can up-sell and cross-sell to those clients to maximize profitability and increase customer lifetime value. Businesses doing this are not only increasing revenue, but maintaining and developing crucial relationships with their customers.
Customer loyalty & retention analysis enables companies to calculate customer value and to determine whether the retention effort for that specific client is worth the investment. Loyalty is not only concerned about rewarding customers with personalized offers through loyalty programs, but also with turning satisfied customers into successful brand advocates. Techniques such as social network analysis enable businesses to identify those customers with a significant sphere of influence among their peers. As customers’ trust in traditional marketing messages has been steadily decreasing, the ability to leverage peer recommendations by capitalizing on those active in social media is a powerful way to enforce brand loyalty.
Retention analysis allows companies to identify early warning signs of defection. Companies can proactively approach the best customer to target based on their likelihood to accept an offer to stay and not stray to a competitor.
An emerging area, social media analytics, unlocks the value of customer sentiment. It functions both as a listening tool and as a means for predicting consumer behavior and improving customer satisfaction. As business professionals assess the critical infrastructure necessary to cope with the Big Data onslaught, one component is key—comprehensive customer analytics adoption. From accessing rich social media data to increasing customer loyalty & retention, businesses today have a number of goals to focus on at once. A key question remains: How are business leaders viewing the role of technology in assisting them to accomplish their loyalty and retention tasks?
By implementing proactive loyalty and retention initiatives, they can better understand who their satisfied customers are and turn those customers into successful brand advocates.
MediaTrac has released several ebooks demonstrating how dealerships can boost sales with customer loyalty and retention programs. They are available to download for free at http://www.media-trac.com/resources/whitepapers.shtml
How does your business sort through all of your customer data?
Is your company tracking social media analytics? If yes, how are you doing this?
Are you currently using a customer loyalty and/or retention program? Why or why not?
- Average/unconflicted: 61%
- Spendthrifts: 15%
- Tightwads: 24%
Each of these types responds differently to different marketing messages. So, how can you identify which is which, and how do you sell to them?
Tightwads tend to feel pain associated with buying; they tend to avoid spending money even in situations where most individuals would find the expense to be justified and of good value. Tightwads are differentiated from ‘frugal’ people, as frugal people don’t tend to feel pain at buying, they just enjoy saving more. Tightwads tend to carry little credit card debt and have more money in personal savings accounts than the “average” or “spendthrift” buyers.
To sell to tightwads, you want to minimize their buying pain. One way to do this is to appeal to the utilitarian or practical aspect of the purchase. For instance, if they need a pick-up, don’t try to sell them the luxury model; to a tightwad, paying extra for luxury features is unnecessary. Another way to minimize their buying pain is to watch how you use language: avoid saying things like “immediate payment in full,” or a “fee of $100.” Instead, say things like, “small down payment,” or “only a $100 fee.” Also, tightwads don’t like per-item pricing; bundling features together in package pricing works better.
Spendthrifts are three times as likely as tightwads to have credit card debt, and they are likely to have less in savings. This means that right up front, although they are willing to buy, financing will be more of an issue. Spendthrifts tend to derive great pleasure from buying; these are the types that respond to the “luxury” pitch, or the emotional satisfaction of immediately driving off the lot with a new car (unlike tightwads that don’t respond to that type of sales pitch). Spendthrifts want instant gratification.
“Average” buyers fall somewhere in the middle and are susceptible to both types of marketing messages and pitches.
Identifying what type of buyer is in front of you can be accomplished with casual conversation; ask a consumer about past purchases, and what they did or didn’t like about cars they have previously owned. Tailoring your marketing messages to different types of buyers can help boost sales and customer retention, especially to the 24% of the market identified as “tightwads” – but please don’t use that term in front of your customer!
Do you segment your customers into buying “types”? If so, which types?
What have you found to be effective for selling to tightwads, spendthrifts and “average” folks?
New data from DMEautomotive reveals power of OEM/PPMs lasts well beyond expiration
While most dealerships offer some degree of prepaid maintenance (PPM) or complimentary dealer and OEM maintenance plans, many question how effective these plans really are and if they do in fact provide the intended retention and ROI. Good news—research shows that they do and additionally they provide the unique opportunity to tap into the highly desirable younger market segment.
DMEautomotive’s recent national consumer survey provides fresh insight into the state of prepaid and complimentary maintenance plans, along with evidence of their powerful ability to provide consistent dealer retention. Research shows that strong programs can keep customers coming back for repairs long after the expiration of their respective maintenance package—shifting business that typically bleeds into the aftermarket, into firm dealership territory. Below are some of the key findings of DMEautomotive’s recent survey:
- Roughly one in four U.S. vehicle owners have a dealer or OEM prepaid or free service plan.
- Free or prepaid, 35 percent of customers are not using plan for all maintenance. While 65 percent use plans for all scheduled maintenance, a surprising 25 percent only use it for “some” and nine percent have not used it at all.
- Plan usage and satisfaction levels align: those using their plans for all scheduled service at the dealership report the highest satisfaction and 75 percent are either “extremely satisfied” or “satisfied.”
- Next-generation servicers (under 35) are more likely to have a plan (31 percent) than those over 35 (18 percent) making these plans a powerful tool for young, dealer-disloyal servicers.
- Plans drive long-term retention as 56 percent of consumers with a prepaid or “complimentary” service plan report they are likely to continue servicing their vehicle at their dealership after the plan expiration.
- Loyalty during plans impacts future loyalty—almost twice as many consumers who use their plan for all maintenance (versus those who only use it for some) report they’re “very likely” to continue servicing their vehicle with that dealer at plan-end (30 percent versus 17 percent)
One of the most valuable pieces of information gathered from the survey is that there is a new way to reach our younger customers. Results show that younger consumers are significantly more likely to use their plans for all maintenance than older consumer segments. Notably, 84 percent of those aged 25-34 (who used the plan for all maintenance) reported high plan satisfaction, in addition to 62 percent stating they are likely to service at the dealership post-plan. Given that that the 25-34 year old age range is typically the largest group of dealer-disloyalists, it’s clear that maintenance plans can be yielded as a uniquely powerful tool.
While maintenance plans provide a powerful opportunity, they do take effort. We have learned that customers covered by maintenance plans often stray from the dealership for repairs. While this may initially be seen as a profit gain, research shows that customers who stray are more likely to take servicing needs elsewhere upon expiration—demonstrating the importance of consistently engaging with customers post-sale; something to keep in mind as you manage your ongoing customer relationships.
Mary Sheridan is a CRM insights analyst for DMEautomotive’s strategy and analytics team, which is focused on producing cutting-edge research on service customer behavior to help automotive retailers build greater customer loyalty and retention. Sheridan has a PhD in clinical psychology, and has nearly a decade’s experience in primary research, including over four years in customer experience and loyalty.
Source: DMEautomotive, September 2012. Author, Mary Sheridan
Business 2 Community | By Sean Johnson | December 17, 2012
It seems a lot of companies have a love-hate relationship with Twitter these days. They know it’s a great tool for sharing and promoting their own content, yet many still seem uncertain how to use it effectively to attract followers and drive prospects to their website.
If you’re at all serious about Inbound Marketing, you know that social media – including twitter – are an essential part of your strategy. Research from Social Media Examiner on the 2012 State of Social Media Marketing showed that just 6 hours a week can help drive sales.
In many ways, Twitter serves as a real time news feed that people follow throughout the day, looking for the latest conversations regarding their industry or content that might help solve a problem. By engaging in conversations and sharing quality content, you can use Twitter to strengthen brand awareness and drive prospects to your website for lead conversions and sales opportunities.
It can also be used to engage with existing customers and to provide improved customer service.
Given its benefits, it’s important that your company’s Twitter account makes a positive impression in the social media universe. The following are 10 steps you can take to build a credible presence that your prospects will want to follow.
Look the part!
1. Use quality pictures and graphics for your avatar, header and background to dress up your profile. Nothing says spammer quite like the default egg that shows on Twitter profiles missing a picture. Simple backgrounds work best. Avoid clutter.
2. Complete your profile bio using complete language and specific keywords so that people will find you when conducting a search. Space is tight here, so really focus on the essentials.
3. Include your website and other contact information. If you show up in search, you want prospects to be able to jump directly to your site. Make sure you include your location to take advantage of local SEO.
Tweet clearly and consistently
4. Don’t stuff your tweets with #Hashtags. Depending on the platform people are using, hashtags can break up the tweet, making it hard to read. Use plain English. Avoid jargon unless you’re looking to attract a particular market.
5. Avoid personal comments that don’t have a connection to your business. Most of your followers don’t care that you’re at the coffee shop. They’re looking for useful information that helps them solve a problem. Don’t be afraid to ask your followers questions.
Tweet useful content
6. Share your links. Make sure your links have been shortened and are placed in the middle of the Tweet followed by any additional content. If using #hashtags place them at the end.
7. Share links to good content related to your industry that your followers would have an interest in. Be useful by providing help.
Followers and following
8. Connect with the people who have a connection to your business. Avoid the numbers game and look for connections that are relevant to your industry.
Listening and talking
9. Twitter is a two-way conversation, so respond to what others tweet about your company and the content you’ve shared. Join, or start, Twitter Chats that are relevant to your business.
10. Track your keywords and monitor what people say. Join conversations when it’s relevant and make sure you’re aware when people are talking about you so you can respond.
A final thought
Consider this the bonus and an obvious but important rule to follow: be generous and say thanks!
If someone takes the time to retweet your content, thank them. Every person they share it with is a potential prospect; forget to thank them and they might not do it again. The same for your own retweets: By retweeting relevant content from others, you encourage them to do the same with yours.
How can you improve your company’s Twitter page?
Are you tracking your keywords and what people say? If so, how so?
What keywords seem to work the best for your business?
This week, CBT News features Mike Gorun, managing partner and founder of MediaTrac, discussing how your business can build loyalty with mobile users. Learn more about the four guidelines to ensure you are building loyalty through your mobile site.
Click here to learn more about building loyalty with mobile users.
Click here for more automotive resources on CBT News.