Increasing Customer Lifetime Value
An insight into CRM and the customer lifecycle
Our B2B client with high product values but low/medium sales values needed some help with their customer engagement. We discovered that their customers were highly sensitive to price led promotions which led to a higher churn rate.
What we did
After a study of their customers behaviour, we implemented a customer lifecycle programme. The basis of the journey was:
• A thorough introduction process for new customers
• A sequence for reactivation
• An approach to manage the regular communication to avoid mistakes.
We included a timely and consistent call to action using personalisation in direct mail, email and SMS to direct the customer to their relationship holder. As the business used a non transactional website, digital channels were used as a support mechanism.
Using a highly analytical approach to identify trigger points allowed us to gain a deeper understanding of their customers and behaviour at each lifecycle stage. This enabled our client to be smarter with their budget, using communications to influence customer behaviour and encourage them to make their first purchase or motivate them towards a fifth.
What we found
As not all new sign ups purchased in their first 3 months, part of the programme was designed to secure that first purchase. We used timely campaigns defined by the analysis of time vs purchase. Through behaviour analysis, it was noticed that a customer was more likely to become a higher value customer after making a fifth purchase.
Previously, a promotional approach was taken to customer communications. This time, to reduce duplication in contact, confusing messaging and periods of no contact, the communication to active customers fell into the management of the customer lifecycle. The lifecycle managed regular contact and generated relevant content for the customers based on segmentations.
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. An additional stage was added for the issue of returning customers that didn’t meet similar trading patterns to those that they exhibited before churning.
During the design and the early days of the lifecycle, testing took place to identify the correct timings for communications to be sent out and working out which incentive, if any had 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.
We tackled churn through a 3-stage reactivation process looking for the natural points and setting send scheduled to reduce wastage on those who are likely to return and spend naturally.
This insight was used to drive the creative brief, ensuring that the right information and messaging was included. Relevancy was high in the communications through recognising which lifecycle stage customers were at and a high level of personalisation based on customer information and segmentations.
Following the project
The outcome from this reduced the promotional activity costs by removing duplicate messaging but they were still well supported through the content for the existing customer base. We also noticed a reduction in customer churn and an increase of sales by 6-8% per year. 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.
Drop us your details to chat about how we can help you with your challenges and objectives. You will either come away with a vision of your solution or you would have taken a little time to think about it.
Either way, you’ll still be further forward than you are right now.
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