Canadian Marketing Blog - Canadian Marketing Association
Welcome to the CMA - Canadian Marketing Association - Blog. This Blog is an initiative of the CMA Digital Marketing Council. All marketing-related topics are fair game: branding, strategy, online, offline, marketing trends, technology, direct marketing, market research...and more.
- Cost of Quality
We all know it is more cost effective to keep an existing customer than find a new one. This is especially true in today’s economic times where customer acquisition is becoming harder and harder.
Which begs the question; why is quality of call not included in the ‘success matrix’ of the telemarketing score card at most organizations?
While some companies look at quality of an inbound call, it is often underweighted, behind the almighty dollar. How long the call takes to resolve is always number 1. Short calls may come at a cost much higher than the price of the call; many of your customers will feel like they are being cut off, that their concerns aren’t being heard – that they are just another number. If you’re lucky, they will call back to get a sense of satisfaction from another agent. If you aren’t so lucky, they won’t call back - they will just find someplace else to spend their money. A customer’s satisfaction with the way a call is resolved should be the top priority. Some companies say this is addressed through 1st call resolution rates, my question is “how do you gauge those people who don’t call in a second time”, if they simply choose to find another company to work with?
If your cost to acquire a new customer is 3 or 4 times more (and sometimes higher) than to maintain your existing customer, shouldn’t the level of quality during the call be a priority?
Outbound telemarketing numbers can be much more staggering. I was recently part of an analysis that looked at the long term value of customers that were acquired. Due to the length of the initial calls, Organization A’s costs were $250,000 for the campaign; Organization B’s costs were $350,000. Initial response rates were almost identical. On the surface, everyone would say it is an easy decision - go with Organization A every time, as we are getting the same response for 60% of the cost. Responses were generating regular purchases every month on an ongoing basis. But once we started to look at the data and follow the trends, those that were acquired by Organization A were dropping off by as much as 24% per year, while those by Organization B were dropping off at 5% per year.
Customers acquired by Organization B felt valued during their call; the length of time spent with them on the phone was more than by Organization A – they showed an affinity toward the organization. As these customers were tracked over a number of years, the acquisitions of Organization A contributed just over $4,000,000. Acquisitions of Organization B contributed over $5,700,000. What looked like an easy decision based on initial costs, has ended up costing the company $1,600,000 over 5 years.
Maybe the decision wasn’t so easy after all.
- Embrace the Recession And Grow
For the first time in over 12 years our economy is shrinking. That means there is a new generation of leaders at the helm of Canadian businesses who, for the very first time, are being confronted with making choices and feeling professional pains that they have never before encountered.
These leaders are going through a series of stages while dealing with the realities of operating their businesses in a weak economy. And, only those who capitalize on the opportunities at each stage will emerge stronger, professionally and personally, at the end of this economic cycle than they were entering it.
Stage One: Prepare
Business leaders, for the most part, do everything they can to keep on top of current economic realities because their day-to-day operations are dramatically affected by sudden shifts in customer purchase behaviours, cash flow and long-term investments. That’s why the first stage that leaders take, although reluctantly – is to prepare for a weakened economy. Earlier this year, I described how leaders can prepare for a soft economy by recession-proofing their business. Specifically, I outlined four steps that leaders can take to build and strengthen an infrastructure that recognizes and rewards customer retention. Since successfully retaining customers is essential in a softened economy, taking these steps strengthens any business’ foundation.
Stage Two: Accept
In the last few months, local and international indices have clearly revealed that consumers and businesses alike are indeed spending less than projected. And, once a company’s revenues are affected, leaders truly accept the onset of a softening economy. During this stage, leaders can optimize several opportunities for success, for example: (i) target recession-proof industries – i.e. those that provide essential products/services rather than luxury products/services; (ii) only target segments that are the most profitable; (iii) focus marketing messages on cost-savings and reducing inefficiencies; (iv) renegotiate vendor contracts; and (v) outsource more marketing activities.
Stage Three: Embrace
During the most recent economic downturn – known as ‘the bursting of the dotcom bubble’ – ThinData consisted of a handful of dedicated professionals. With few assets to risk, we did something that was unheard of: we actually embraced the recession. That meant taking unconventional but well-grounded actions. For example, we took the opportunity to find and hire talented people who had been displaced. At the same time, we recognized that our former competitors were not marketing aggressively. That provided a rare opportunity to build name recognition, positive associations and new relationships in a ‘marketing vacuum’.
By successfully growing stronger through these hard times, the valuable lessons we learned about how to prepare for, accept and embrace weakened economies continue to shape our innovative approach to operating and building a sound business and vibrant culture.
- In response to "R.I.P. Monologue:" a Luddite Fights Back
In response to Selina Jane Eckersall’s unambiguous dismissal of all things not social-media, I can think of little to say other than,”Sorry.” (See “R.I.P. Monologue”)
Well, actually, that’s not true. I can think of a lot to say, but “sorry” seems a good place to start.
Sorry, for being one of those, presumably, “seemingly intelligent” marketing folks against whom Ms Eckersall rages. Sorry for needing to “get real.” And, most of all, sorry for Ms Eckersall herself who is so patently wrong.
It is wrong to say consumers are not interested in hearing “my monologue,” (but it is correct that they do not have to give me their time or mind share). Millions of people, many millions of people, in fact all people are faced with many, many monologenous messages every day, and respond to these messages in many, many different ways. I know that they are interested enough in what I say, that they give me give me enough of their “mind share” to be aware of my products and have an opinion about my brand.
What I find exciting, in my Luddite kind of way, is that many of these people are involved in social networking sites on their computers. They connect with friends and reach out (metaphorically) to the world around them, to become more interesting, more worldly people. Many of them use this fantastic facility to ask their friends (and even total strangers) for opinions about products and services they are thinking of buying. By capturing the opinions of 300 people who have experienced my product, these web savvy people become educated consumers. Social media is a wonderful way for all of us to learn about the products or services we are thinking of buying. A little bit like magazines, or newspaper articles or even talking to friends did in the old, old days. But, obviously more intense and apparently more credible, too.
So, I guess I see social media as one of many communication channels out there. But I don’t see how the existence of these channels makes people any more interested in my message. I don’t, for instance, believe that anybody wants to build a relationship, trust, converse with, listen to, share with, evolve along with, or collaborate with a brand. And just because the brand is trying to cajole people into doing all these things on a social networking site, does not make it any more attractive to “Canadians,” not even that small percentage of them who are active in social networking sites themselves.
Sorry, but the fact is that people will be interested in what you have to say if you have something interesting to say and say it in an engaging and appropriate way. It also makes sense to say it in a place (physical or virtual) where the people you are hoping will hear you, are within hearing range and in the right mood to listen to you. Sometimes a social networking environment makes a lot of sens