Marketing In Recession

Marketing Through the Recession: 6 Strategies to Acquire, Retain and Grow Profitable Customers

Sallie BurnettPresident Customer Insight Group, [email protected]

December 7, 2010

AcquisitionLoyaltyMigrationReferralRetention UpgradeWin-back

Data miningMarket researchModelingProfilingResponse analysisSegmentation

Creative design and copyDigital marketingE-mail designFulfillmentInkjet imagingLaser printingLettershopPrintingPrint on demandProgram managementWebsite design and content

InsightInsight StrategyStrategy ExecutionExecution

Customer Insight Group, Inc.

Copyright 2010 Customer Insight Group, Inc.

Agenda

How are Companies Responding to the Recession

Six Tips and Strategies

Question and Answer


How are Companies Responding to the Recession?

» Cutting marketing and communications budgets while expectations increase.

» CFO’s are increasing demands for reporting, accountability and measurable results.

» Shifting spend from branding and other forms of push marketing to measurable and relationship-based strategies such as search marketing, email marketing, lead nurturing, loyalty marketing and online communities.



“If you’re in a room full of twenty people,

and they’re all talking, all you hear is noise.

But if 19 stop talking, suddenly the

one person who’s still talking

can be heard the loudest”


Firms maintaining marketing budgets during recession significantly outperform their rivals in the following years.

27%

131%

30%

256%

0% 100% 200% 300%

1974/75 US

Recession

1981/82 US

Recession

Sales advantage over 2 years Sales advantage over 4 years

Source; McGraw Hill Study



Source; Tony Hillier analysis of Profit Impact Marketing Study (PIMS) data 2001

10

98

0

2

4

6

8

10

Profitabilty During Recession

Cut Marketing Maintained Marketing Increased Marketing


Cutting advertising in the short term doesn’t boost profits by much.



0.6

0.9

1.7

0

0.5

1

1.5

2

Increase In Market Share During Recovery


-0.8

0.6

4.3

-1

0

1

2

3

4

5

Profitability Increase During Recovery


During the recession recovery phase, companies that increase marketing yield long-term dividend in terms of profitability and market share.

Source; Tony Hillier analysis of Profit Impact Marketing

Study (PIMS) data 2001


#1 Leverage Customer Insight to Create Competitive Advantage


What is Customer Insight?

How do you know you have it?• Not something that is obvious or immediately apparent

• Can be based on one data point or many

• Grounded in customer understanding often rooted in observed anomalies

• Clear or deep perception of the customer that you can act on to achieve business

objectives

• Not just the voice of the customer, instead using customer creatively for innovation



#1 Leverage Customer Insight to Create Competitive Advantage

Who is the customer?

+What are the preferred channels of communication?

+How often do they want to hear from you?

+How can you meet more of their needs?

+What stage is the relationship?

Deliver Value in Every Interaction


#2 Take Programs Off Auto Pilot


Take a fresh look at your loyalty, new customer, retention, win-back, new mover, trigger programs, etc.– For each program look at the KPI of success– Determine if the programs are achieving business objectives– Identify changes that can be made to improve results– Prioritize based on costs, ease of execution, and expected

bottom line impact


#3 Track & Manage Customer Value Migration


Next 12 Month SpendMigration Best Deceile 2 Decile 3 Decile 4

Best 20% 5% 1.4% 0.2%Decile 2 5% 11% 4% 8%Decile 3 2.3% 6% 7% 12%Decile 4 1.6% 3% 13% 9%La

st

12

M

on

th

Sp

en

d

Significant Growth Opportunity.

Losing Share of Wallet

Stable, Room for ImprovementContinue Focus on Retention


#4 Proactively Manage Customer Life-cycle With Brand


Value to the Customer

Val

ue

to t

he

Org

aniz

atio

n

Unqualified Customer

Unqualified Customer

Prospective Customer

Prospective Customer

AdvocateAdvocate

CustomerCustomer

Repeat CustomerRepeat

Customer




Encourage immediate search…

Offer anincentive topurchase…




Come back today!

Benefits galore!


#5 Listen and Respond to Customer’s Needs


59% Most marketing and advertising has very little relevance to me.Source: Yankelovich Consumer Trust Study

14%

Say companies use their personal information to send them advertisements that are relevant to their wants and needs.




59.0%

33.0%

29.0%

20.0%

16.0%

15.0%

Provide special offers based on my priorpurchases

If I have not been on a site in a while send me areiminder with an incentive to return

Make recommendaitons on prior purchases

None of the above

Limit content to the product categories where Ihave shown an inerest

Greet me by name

Source: Double-Click Consumer Loyalty Survey 2Q 2007 Copyright 2010 Customer Insight Group, Inc.



Relevant email campaigns drive 9 times more revenue and deliver 18 times more net profit than broadcast emailing.

QuickTime™ and a

decompressorare needed to see this picture.




Source: Double-Click Consumer Loyalty Survey 2Q 2007

The NFL database is comprised of 75 different variables including demographics, the NFL Shop, the NFL Extra Credit Card; travel and hotels. Customers’ favorite teams are tagged and information is broken out starting with team affinity then subsequently based on purchase behavior.


#6 Double Down on Best Customers


Starbucks– The company's shares dived 42% last year on signs that

consumers were falling out of love with Starbucks. – Customer Insights lead the way in the solution:

A complete reinvention of brewed coffee in-store, that will be brought to life by baristas across the U.S., who will scoop and grind a new unique coffee blend, connecting customers to the early days of Starbucks;The first phase of a Starbucks Card Rewards program, rewarding registered cardholders and providing unique new benefits when using their cards in Starbucks stores;The launch of MyStarbucksIdea.com, Starbucks first online community, that takes the Starbucks Experience outside the store and enables customers to play a role in shaping the company’s future.



1. Leverage Customer Insight to Create Competitive Advantage

2. Take Programs Off Auto Pilot

3. Track & Manage Customer Value Migration

4. Proactively Manage Customer Life-cycle With Brand

5. Listen and Respond to Customer’s Needs

6. Double Down on Best Customers


Sallie Burnett, President, Customer Insight Group, Inc.

ph: 303.422.9758

e: [email protected]

www.customerinsightgroup.com

Join the conversation at on our two blogs:

http://www.customerinsightgroup.com/marketinglibrary/

http://www.customerinsightgroup.com/loyaltyblog/

http://www.customerinsightgroup.com/

http://www.customerinsightgroup.com/marketinglibrary/

http://www.customerinsightgroup.com/loyaltyblog/

Marketing In Recession

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