Uncover More Marketing Opportunities with a Portfolio Value Statement

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Today’s customer is a moving target, and so is measuring customer success across channels, campaigns and individuals. Marketers are realizing that just focusing on customer acquisition isn’t growing the overall customer “portfolio,” and too many opportunities to drive that growth—like retaining current customers or reactivating lapsed customers—are being overlooked. Your portfolio of customers is an asset, and you should constantly be looking to increase its value.

The solution is to have a total view into different segments within your customer database, including revenue, marketability, and engagement. A portfolio value statement (PVS) is the tool to give you that view. The PVS should reveal how your customer base is evolving and either positively or negatively impacting revenue.

The portfolio value statement brings light to all of the marketing activity you have in place and helps identify needs for additional marketing efforts to specific customer segments. For example, it could prove the need for growing the business through retained customers, instead of merely through acquisition.

Before determining marketing efforts, you need to define the customer segments.

Portfolio Segments: Diving In

Here is how we break down our clients’ customer portfolios into actionable behavior-based segments:

Recency Segments:

  • Active
  • Inactive
  • Lapsed

Lifecycle Groups:

  • One-time
  • Repeat
  • Loyal

Customer Status:

  • New customers
  • Retained customers
  • Reactivated customers

Having identified these segments and their profitability, it’s time to pursue them for a relationship that grows topline revenue while maintaining target margins.

Next Step: Life Cycle Marketing

With this better view of segmentation, marketers can focus on the best way to strategize customer life cycle campaigns.

Life cycle marketing lets marketers give their customers a customized treatment that has the best chance of pushing them forward through the buying life cycle—instead of capitalizing on those who are likely to buy regardless, or providing blanket offers for everyone. That’s how you generate real growth of your customer portfolio.

First and foremost, marketers can create more targeted campaigns because the portfolio value statement helps them really understand each buyer stage. With the dedicated expertise of a segment manager, they can not only understand the customer better, they can get a good idea of the revenue they’ll get from the campaigns.

Here is a look at an actual discovery made from one of our retailer’s one-time inactive customers:

As it shows, there were 210,000-plus customers who have made a purchase in the past year but haven’t made a recent purchase. Fifty-four percent of these customers are marketable by email, but the client is only emailing 30 percent of them. Even more surprising, 85 percent of these customers are direct mailable, but the client is only mailing 17 percent of them. There is a huge opportunity to increase the outreach to customers.

Someone who is focused on this segment would be able to see this opportunity and put in place omnichannel life cycle marketing campaigns to get these customers to return. For this segment, the marketer could employ an anniversary campaign, or a reactivation campaign if they don’t purchase again as their last-purchase anniversary date is approaching. This extra look is worth the effort—moving the needle by just 1 percent on the number of customers that come back and purchase can equate to more than $210,000 in revenue.        

Rise of the Segment Manager?

As more companies look beyond acquisition to delve deeper into their database for increased revenue, we are starting to see some marketing teams organize around customer segments. We’re seeing teams dedicated to acquisition, growth, retention, and even loyalty.

This reorganization, coupled with the holistic portfolio value statement, would encourage the formalization of the segment manager, a specialized role that focuses on certain customer groups to uncover insights and opportunity. The staffer in this role becomes a dedicated expert that closely follows, and acts on, retaining and growing the value of their members. This could be a more efficient, more effective way to grow revenue and the portfolio of customers. 

These segment managers have specific goals across segment channels. For example, a loyalty segment manager may be responsible for looking at the best customers and shaping offers to retain them, creating a loyalty campaign just for them. The portfolio value statement supplies segment insights that guide the segment manager in strategizing the best way to drive revenue and prevent attrition.

The Bottom Line

For many marketers, the standout benefit of a portfolio value statement is that it lets them predict the revenue up front, and then follow steps to make that happen.

Viewing customers as a portfolio helps retail marketers understand the value of segmenting their database as a serious discipline, rather than take a cookie cutter approach, or ignoring all else for the sake of acquisition. And it is becoming an important competitive differentiator—progressive marketing focuses on more than just the past 12 months now.

A portfolio view makes marketers better budgeters and better decision makers overall. And when it’s time for marketing to propose its plan—and defend its budget and spend—a portfolio value statement gives them a compelling argument. It is based on accurate forecasts for long-term revenue that will grow the entire customer portfolio for years ahead.

Denise DeSisto is vice president of marketing automation and product innovation at Boston-based Customer Portfolios, a marketing technology leader that uses insight and analytics to increase customer value. You can follow Customer Portfolios on Twitter at @CustPortfolios.

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