October 14, 2009
By Connie Hill, president & founder, TFC, Inc.

Breaking Loyalty Barriers with New Technologies

Marketers today recognize the importance of developing customer loyalty through customer-centric marketing efforts. Looking through the lens of the economic recession, marketers are highly motivated to retain and grow revenues from existing customer relationships. However, they are often at odds when it comes to expanding their customer database to include all customer touch points. Moreover, marketers struggle with how to integrate analysis without breaking the bank and how to deploy the right technology to deliver effective customer communications.

Customer-centric marketing success requires marketers to juggle various mission-critical tasks, especially when it comes to making sense of customer data. These responsibilities include:

being in charge of data marts containing holistic data points;
analyzing and gaining insight from that data; and
making that insight actionable in the form of customer communication.

To get started, here are five steps marketers can take to expand their database, integrate analytics, and automate their customer communications and loyalty program.

1. Design your customer data mart.

Based on business objectives and key performance indicators, clearly identify subject areas to create a framework for organizing the data for analysis. Subject areas serve to support retention or cross-sell programs and can be further defined by various attributes and dimensions:

customers (standard demographic information, type of customer, lifestyle profiles, customer start date, Net Promoter Score, lifetime value);
behaviors (purchases, Web activity, calls into service centers, store visits, and all other company touch points); and
campaigns (costs, counts, conversion rates, and revenues generated).

2. Source the data.

The next step is to identify the data sources that contain the information within the data mart. Negotiate with the owners of those data sources to provide daily, weekly, or monthly delivery of the data needed.

3. Secure the right technology partner.

Some marketing automation services provide data mart organization and design services. In addition, these providers can also perform the necessary extract, transform, and loading processes on a routine basis. Many also provide platform as a service solutions to host the transformed data and supply analytic capability over the Web for a monthly fee.

These tools and technologies come in a wide variety of breadth, depth, cost, and on-demand or on-premises options. Therefore, marketers must consider their business needs and objectives against time, budget, and resource limitations. Invest in product or service research up front to determine the ideal marketing analytics solution that will yield relevant customer insight.

With insight at their fingertips, marketers can rely on customer analysis to reveal behaviors that lead to churn, or provide an understanding of the behaviors of their most loyal and profitable customers.

4. Make insight actionable.

Insight is most valuable when it is actionable. To complete the marketing automation potential for customer-centric marketing, integrate customer data marts and analysis tools with marketing platforms that provide rules-based multi-channel execution. These platforms are available as a software-as-a-service (SaaS) model. Forrester Research defines these evolved platforms as "a new breed of marketing automation that provides a broader platform to deliver multi-channel marketing programs, which improve campaign velocity and relevance, better accountability of all marketing programs and overall improvement in marketing effectiveness and efficiency."

Creation of a customer data mart, analysis, and the use of multi-channel platforms can propel a company forward. Even veteran direct marketers appreciate the enhanced insight and the increased speed to action. Costco Wholesale, for example, applies marketing automation to its retention and up-sell programs. Use of an on-demand customer data mart and analysis application allows Costco to monitor campaign results and customer purchase behaviors quickly. According to the company's Database Marketing Manager Robert Csonaki, Costco is equipped to make faster decisions, better target up-sell opportunities, and can "breathe life into more conceptual ideas that have been shelved for months."

5. Measure results and calculate ROI.

In general, marketing automation technology combined with process re-engineering improves campaign effectiveness, improves efficiency, and eliminates waste. Applied to loyalty and retention programs, automation can also extend lifetime value, increase profit per customer, and differentiate your company by creating meaningful customer experiences.

The right performance and customer metrics can be integrated into most marketing platforms. Dashboards specific to your customer programs can include direct connections to corporate-level initiatives that in turn support accountability initiatives. This level of metric reporting requires thought and organization of customer data as described in step one.

In today's increasingly SaaS-driven world and the emergence of marketing automation service providers, a customer-centric marketer has access to all the necessary technology -- from an ongoing customer data mart to analytics to a multi-channel delivery system for personalized customer messaging to a dashboard to measure performance -- without having to deal with bulky legacy systems.

For marketers charged with customer-centric marketing, customer retention, or customer loyalty, on-demand solutions help break through the organizational and data barriers that keep customer-centric marketers from achieving success.

About the Author

Connie Hill (chill@tfcinc.com) is president and founder of TFC Inc., an innovative provider of marketing automation solutions. She brings more than 25 years of experience delivering strategy and execution services to the marketing community.

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