Has Your Customer Truly Lapsed?
Posted by: WDMP Limited
Date added: Tue 07 Aug 2012
By Gavin Wheeler, CEO at direct response and relationship marketing agency WDMP
However, it’s too black and white to consider customers as either active or lapsed depending on the date of their last purchase.
For a contract-based product such as insurance, just because someone has bought a policy from you for two years, it doesn’t mean they are engaged with your brand. Also, bear in mind it can be difficult to use time to define lapsed customers. Every consumer is unique so pinning a time-line of 3, 6, 12, 18, 24 or more months of non-purchasing before calling them lapsed is an outdated approach that doesn’t allow for insight into a customer’s own individual needs.
It’s important to understand that consumers are repertoire buyers, so 100% loyalty is unlikely. You may have a favourite brand but, when you need a cup of coffee and there isn’t a Cafe Nero around, will you really spurn the Costa Coffee you’re walking past? In truth, many of us just need gentle reminders that we like a particular brand so that when the next purchase opportunity comes up, the brand jumps out first from the list of brands we’ll consider.
Essentially, instead of thinking about lapsed and non-lapsed customers, we need to assess customers according to their level of brand engagement. So, rather than using Return on Investment as our measure of success, we should use Return on Engagement to create an understanding of how engaged our customers are with the market, product, brand and offer we are selling.
With this in mind, you need to create an holistic single customer view, which draws on all available data to create an engagement profile for them. This ‘CRM 3.0’ approach is about monitoring and evaluating all conversations with each customer, both inside and outside a brand’s own environment, and integrating this with existing data in real time.
To monitor engagement, cookies and web analytics are invaluable to identify who visits your website, what pages they look at, what they clicked on, products they looked at and if they get a quote etc. There are also now a number of tools that enable you to identify and measure brand engagement activity from social media sites such as Twitter and Facebook. Use an ‘engagement warehouse’ to integrate this with transactional data as well as responses to more traditional communications and you can then start to make informed judgements on whether someone is truly lapsed.
It’s also important to identify changes in behaviour as a potential trigger for a new brand message. So, for instance, if a regular customer stops buying ‘couples’ holidays then it’s possible that they may either now have children, or they could have separated/divorced. In order to evaluate the significance of behavioural change you can apply external data to your database to provide insight on the reason for any profile shifts.
We have also found that surveys are invaluable for gathering more in-depth demographic and attitudinal customer data so you can better qualify the reason for any behavioural change. They are also a great engagement tool for you to show a non-purchasing customer your appreciation of their business, giving you an excuse to get in touch.
Having created your 360 degree engagement view of your customers you can then start to identify the true potential of each customer, understand where it’s worth investing your budget and create personalised communications programmes that make a difference.
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