Instant Messaging: A Natural Customer Retention Channel
Tap it as a medium for retention, brand-building, and upselling opportunities.
Posted Sep 1, 2005
  

Everyone has heard that ROI for sales to existing customers far exceeds that of ROI for new customers--keeping a customer is far less expensive than winning a new one. This truth has not been altered by the rise of online marketing and media. In fact, customer acquisition costs seem to march ever upward, reinforcing the motivation to retain and strengthen existing customer relationships.


Portals alone fall short
Investments by brands in customer retention and loyalty span the media. In the online arena, brands have typically appeared heavily on portal sites designed to engage and retain the faithful. However, Internet fragmentation is working against most of these first-generation loyalty and retention initiatives--so many possible destinations, with such little time. The only time a portal site works for brand marketers is during the customer's actual visit to the Web site, in turn requiring continuous effort and investment in order to generate original and return visits. With the diversity that pervades the Internet and its increased slate of offerings to Net-surfers, it's a tall order to create the momentum necessary to transform a casual site visit into a series of repeated hits.

Online advertising is frequently called upon to drive traffic to portals, but with consumers bombarded by so many online messages, many of which are irrelevant to their interests, important marketing messages are often completely ignored by online consumers. With the maturation of the Internet clutter increased, while the novelty of basic advertising and promotion declined. Studies have shown that click-through rates are steadily falling and email campaigns are now so saturated that even targeted messages based on past purchases are viewed as spam. Consumers have become irritated by these online practices and disengaged from the brands that use them.

Taking these factors into account, if online outreach falls short of your goals, you may find yourself using traditional media to increase traffic at the portal. And doesn't that become a case of the tail wagging the dog?

The Instant Messaging Alternative
Online retention and loyalty demand an intimate connection between brand and customer that's persistently engaging without being irritating. Wouldn't it be great to connect your brand to customers through a venue that is already a part of their daily lives; one where they talk with their friends about common interests? Instant messaging (IM) offers this platform.

To date, IM has remained largely untapped as a medium for retention, brand-building, and upselling opportunities and has been primarily considered a communications utility with advertising inventory that solely promotes smaller versions of IM companies' own portals. Because IM has the ability to uniquely connect customers with brands on a consistent basis, this view has begun to change. There are several critical features that give IM an edge over traditional online marketing strategies.

User-Directed, Content Driven
Through exclusive promotions, personalized interfaces, and interactive content like video, music, games, and contests, IM can match up with portals as a user-tailored gateway to entertainment and information. IM is also groundbreaking in its ability to bring a content-driven experience to users, especially of users who do not spend much time seeking content. Users can tune their IM system to focus on what interests them most, including their favorite brands, making the IM experience a natural venue for extending content beyond brands' portals.

Persistent
IM is an always-on medium providing brand exposure to the consumer for hours at a time. Because of this persistence IM is an ideal extension of traditional portals--offering a variety of ways to present targeted and time-sensitive messages directly on the desktop. When customers are online IM is often "on top" of the user's screen, permitting brand interaction to circumvent Internet clutter.

Profiled
IM can provide rich profile information--demographic, psychographic, and behavioral. Profile-based marketing is one of online media's great advances. For example, who hasn't noticed and appreciated relevant suggestions and links at sites like Amazon.com? Because of its continued involvement with the customer and because it has a conversational foundation, IM can take profile-based marketing even further than Web sites. As IM develops, brand marketers can look forward to using it as part of their integrated marketing information system.

Shared
As an informal medium IM is about conversation with friends and associates, creating countless timely opportunities to spread brand messaging and offers from person to person--a capability that is inherently beyond the scope of pure Web marketing. This premise offers marketers opportunities to catch two people in a relevant conversation with the same offer at the same time. Simply put, if you want your offer or product discussed, introduce it to people who are already talking.


The online world may be a challenging place to deepen customer relationships, but it's increasingly worth the challenge, especially with important younger demographics--Live8 drew more U.S. viewers online via streaming media than over broadcast television. Strengthening customer relationships means being where your customers are, which in this case is online and chatting about shared interests. What could be a better place for your next customer retention initiative.

About the Author
Bob Kimball is president and CEO of MECA Communications. He brings combined marketing and technology vision and management to MECA. Bob holds an MBA in marketing from U.C.L.A. with honors, and a BSEE in solid state physics from U.C. Berkeley with honors.