CRM & Customer Lifecycle
A customer lifecycle communications programme was designed for a high product value B2B company with low/medium product values to help with the overall customer engagement and to combat an increasingly promotion driven customer base. Through studying customer trading behaviour it became clear that they were highly sensitive to price led promotions which subsequently led to a high rate of churn.
Staff in the stores held the responsibility for generating sales, with the Marketing team tasked with driving footfall. The programme was designed with this in mind and a consistent call to action was employed, using personalisation techniques in direct mail, email and SMS to direct the customer to their relationship holder. Digital channels were used as a support mechanism as the business had a non transactional website.
The basis of the journey was a thorough introduction process for new customers, a sequence for reactivation and an approach to regular communications to manage the regular communications to avoid over/under communication from the brand.
The new customer process was developed through analysing the early trading behaviour of the customer base and identifying the significant points in time where behaviour became less favourable. Communicating at these behaviour trigger points enable the business to be smarter with their budget, using direct communications to influence customer behaviour and depending on the stage in the lifecycle, encourage the customer to either make their first purchase or push them towards a 5th purchase.
Not all new sign ups actually purchased within their first 3 months so part of the programme was designed to secure that first purchase. Campaigns were sent in line with timings defined by the analysis of time vs purchase. The drive to a 5th purchase came from behavioural analysis that highlighted that when a customer made that 5th purchase they became significantly more likely to become a good customer.
Communication to active customers fell into the management of the customer lifecycle in order to reduce duplication in contact, confusing messaging and even periods of no contact. Where previously a promotional approach was taken to customer communications, only talking to customers where they fit the promotion, the lifecycle managed regular contact and generated relevant content for the customers based on segmentations.
Customer churn was an issue that was tackled through a 3 stage reactivation process that looked for the natural reactivation points and set the send schedules in order to reduce wastage on those that are likely to return and spend naturally. Through a programme of testing the send intervals were set, along with effective incentives that balanced the response rate with the investment in the incentive. A further stage was added to deal with the issue of returning customers that did not meet similar trading patterns to those that they exhibited before churning.
Testing took place throughout the whole design and early days of the lifecycle, being used to identify the right timings for communications to be send out and working out which incentive, if any, has the best impact. By taking this approach the individual communications were optimised for send times and incentives, improving the use of the budget and the ROI of the lifecycle as a whole.
By taking a highly analytical approach to identifying the trigger points it was possible to learn more about the customers and their behaviours in each of the lifecycle stages.
This insight was used to drive the creative brief, ensuring that the right information and messaging was included in the communications. Relevancy was high in the communications through recognising the stage in the lifecycle that the customer was at and through a high level of personalisation based on customer information and segmentations.
The effect of the programme as a whole was a reduction in customer churn, increased average lifetime of the customer base and an increase in sales for the business of 6-8% per year. Existing promotional activity costs were reduced slightly through the removal of duplicate messaging but they were still well supported through the content for the existing customer base.
Ongoing analysis of the lifecycle takes place so that any changes in customer behaviour and any underperformance of the stages can be identified and addressed at the earliest opportunity.