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:

1. 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.
2. 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.
3. 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.

Filed under: Integrated Marketing