The ability to master multi-channel marketing is becoming increasingly vital for companies as they are struggling with the dynamics of how to profitably grow their business in a changing economy. Employees are disgruntled and shareholders are dismayed. And unfortunately, a recent study by Experian shows that many retailers and home shopping companies are failing to live up consumers’ multi-channel expectations. Hitwise, Experian’s online insight division, found:
- 45% of customers are single purchases, with figures as high as 75% in some cases;
- 60 to 70% of so-called ‘best customers’ had not purchased in the past 12 months;
- Pareto principle, the law of the vital few and the principle of factor sparsity, is holding true with on average 30% of customers representing 70% of revenue.
How do multi-channel marketers turn this challenge into an opportunity? Here are 3 steps you can take to generate incremental profit and improve long-term customer retention:
- Focus on the customer life-cycle with your brand. Develop a customer life-cycle communications strategy to proactively engage new customers and move them from one time buyer to multi-buyer to loyal customer. By focusing efforts on strengthening the relationship with new customers, you will increase sales and retention.
- Track and manage customer value migration. Typically companies monitor customer satisfaction and attrition, but the telltale sign of a problem is changes in customer value over time — customer value migration. Customer value migration is a powerful indicator of positive changes in purchase behavior as well as a signal that allows you to catch customers before they are gone forever.
- Focus on customer loyalty. Create a disciplined approach to identify and nurture the yield of best customers through a long-term, reciprocity, value-added relationship.
These three steps may seem obvious to many, but they are often missing in many marketing plans.