Every brand’s success is driven by their customers. At the heart of every successful customer strategy lies the imperative of customer retention and acquisition, driven by a deep understanding of customers and what motivates them to engage with your brand.
This is where an effective Customer Relationship Management (CRM) programme comes in.
Building and maintaining relationships and loyalty with your customers should be treated the same as a friendship and much like a good friend, a good CRM strategy leverages understanding, personalisation and timely communication.
This means that most brand marketers recognise the pivotal role that data plays in creating customer-centric marketing strategies through understanding and relevance. However, for the majority, they are united by the challenge that their first party data alone is not enough to truly understand their customers’ motivations and behaviours:
Firstly, most brands generate 80% of their activity from 20% of their customers and so have a deep understanding of a minority of customers, but fail to understand the long-tail of customers who’ve engaged with them once. Typically this 20% are your most loyal customers, people who interact with you frequently and who you know the most about. The other 80% of long tail customers only shop with a brand once or twice a year. This larger group represents a long lost ‘friend’ occasionally sending a message to say Merry Christmas or Happy Birthday. This apparent lack of contact and subsequent reduced data capture make it much harder to build a lasting brand relationship with this customer group.
The second challenge is that transaction history gives a robust view of what customers do, but fails to reveal WHY customers engage with you. Most CRM teams are equipped with an understanding of web behaviours and past transaction history which gives an understanding of product preference, but this data signal only gives you the “what”, it fails to reveal the “why” customers choose your brand. Historically, this insight has been understood through customer research with survey panels. Whilst this insight is helpful, surveys often fail to reveal which customers in your CRM database have which attitude, eliminating the possibility of personalisation.
To master this successfully brands need to enrich their understanding of customers with complimentary data sets to understand who they are and more importantly, why they buy. This is where Starcount comes in.
Let’s bring it to life with an example…
Kat and Kris are two customers in your CRM database. From the data captured through purchase history you know they have both bought the same bicycle.
This means they have the same product preference, have spent the same amount of money and perhaps, through your own data capture or through a geodemographic enrichment partner, you know they are demographically the same age, gender and income. Therefore it is easy to conclude that they must be the same type of person, interested in the same type of products from your brand’s portfolio and so CRM communication is then tailored based on this information and both Kat and Kris receive the same content.
However, your data alone means you don’t know how Kat and Kris are living their lives beyond shopping with you. This lack of understanding means that you are treating two customers the same way, when in fact they may be very different. This makes it more difficult to build and retain a relationship with Kat and Kris and therefore denying the opportunity for your brand to create a lasting friendship leading to front of mind awareness, future consideration and further purchases.
Starcount has proven that understanding your customers better drives better results.
£4.9m increase in revenue monthly | 39% increase in engagement | 62% retained customers
How? By understanding the WHY.
The biggest hole in this current strategy is that you are missing the most important part of WHY they have decided to both purchase the bicycle and WHY they have chosen your brand to do it. A hole, which when you have the right data, is easy to fill.
As Daniel Kahneman proved, 95% of all decision-making is emotional. When a brand is able to tap into the emotions of both their current and future customers it leads to better results. The best way to drive these results within a CRM strategy is by using up-to-date behavioural data of what your customers are doing in the rest of their lives. This helps to close the gap between what customers buy and why they buy. Identifying what your customers love and care about creates a long-lasting and, more importantly, valuable two way relationship.
The best practices involve matching a brand’s first-party data to behavioural data, such as Starcount’s social media interests and open banking data. This creates the opportunity to enrich your knowledge of customers and starts to reveal information on what your customers care about most and where else they spend their time and money.
Let’s go back to Kat and Kris…
Enrichment starts to pinpoint relevant and recent behavioural signals to uncover the different reasons why Kat and Kris purchased a bike.
This data differentiates two customers who previously would have been treated the same.
Using Starcount data, we can identify that Kat has an interest in Nature, Hiking and Veganism, she buys her clothes from sustainable brands such as Patagonia and is influenced by National Geographic, Greta Thumburg and David Attenbough. This shows Kat is driven by a climate-conscious mindset. Kris, on the other hand, is interested in triathlons and nutrition. She spends her money at GymShark and Fitness First and follows Joe Wicks and Kayla Itsines for workout tips. She is a fitness fanatic.
If you knew this information about Kat and Kris would you now send them the same communication?
These findings have already started to produce a richer picture of who your customers are and the emotional reasons why they are spending with your brand, subsequently enabling a more relevant and personalised communication.
The data reveals that Kat is a Climate Conscious customer who bought a bicycle because she wants to be more sustainable. She is focused on lowering her carbon footprint and thinks that the best way to do this will be cycling to work.
Whilst, although Kris bought the same bicycle, Kris is a Fitness Enthusiast whose priority is using her new bike to improve her fitness levels. Kris wants to use the bicycle to push herself and achieve her weekly workout goals.
By appending the enrichment attributes and new detailed segmentation to your CRM future communication to our friends Kat and Kris can be tailored based on this new and more thorough understanding of who they are and what they love and care about most.
For example, advertising a sustainable water bottle to Kat and a fitness watch to Kris.
Talking to your customers about the things that are important to them is the best way to drive better relationships. Mutually beneficial relationships will encourage your customers to see you as someone who knows them well whilst also driving profit for your business. After all, marketing communications with emotionally relevant content are 7x more effective.
Come and talk to us about how we can help you make more of your CRM and see for yourself the results it can deliver:
Results:
168% increase in brochure requests | 55% increase in open rate versus BAU | 100% increase in sales per mailed customer
