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Welcome to the April 3, 2008 edition of The Wise Marketer!
We're
delighted to announce that our 900+ page guide to customer loyalty, 'The
Loyalty Guide III', has been published this week, and is now available for
immediate shipping. It's a complete world-wide report on the state of loyalty,
giving you current and future best practices, trends, forecasts, markets,
details of major players and programmes, case studies, hard-to-find facts &
figures, and everything else you need to know about loyalty marketing. Full
details are online now, at http://www.theloyaltyguide.com
The
convergence of two branding trends has converted into an increased consumer
desire for more customised product and service offerings, according to Robert
Passikoff, president of Brand Keys Inc.
The
first trend is consumers' heightened feeling of control over almost every
aspect of their lives, and the second is the commoditisation of almost
everything. Combined, these trends have created a natural craving on the part
of consumers for goods and services that represent their own personality and
needs, in the form of customisable...
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We
know that, in theory, building customer loyalty increases profits. But how can
we measure how effective it is in reality? How can we predict the effect an
investment in loyalty will have on the future of the business? While no method
can ever be perfect, measuring loyalty's effect on Customer Lifetime Value
(CLV) is one of the best - and most accurate - ways, particularly if the
management wants to maximise customer profitability during the whole of each
customer's life cycle with the company.
CLV
is increasingly being recognised as one of the most important measures of the
worth of a customer. It takes into account not only the customer's value now
but the expected value over their projected lifetime as a customer.
In
fact, it is quite sobering to see how big the CLV can be. It is particularly
important in high ticket value, low frequency businesses (motor sales or
insurance, for example). The costs of setting up an account and establishing
the customer are offset over many years so, in terms of profitability, the
customer becomes annually more valuable as time passes.
Turning data into profit
The increased interest that managers have shown over the past decade or so in
CRM, customer databases, data warehouses, and data mining is a positive
development. Having such a system in place provides essential data that can be
analysed to provide better business intelligence and decision-making support.
There
are many business models that can be used to get an overall picture of the kind
of relationships and correlations that form the basis of CLV calculations, and
the effectiveness of investments in customer loyalty, profitability, and CLV
will differ depending on various factors:
1. The sector
When comparing data, or conclusions based on its analysis, it is necessary to
define the market sector, the type of company, the market segment and the
company strategy, etc. Research shows that in different market sectors there
are different correlation curves between, say, customer satisfaction and
loyalty, or between customer satisfaction and profitability. Furthermore, the
drivers of loyalty will be different - as will the drivers of profitability.
For example, the correlation curve (satisfaction vs. loyalty) in a stable
monopoly market will differ significantly from the correlation curve for a
turbulent market with fierce competition.
2. The product
The correlation curve for a short term tangible product will differ
significantly from the correlation curve for a long-term service product.
Clearly, this means that the expected outcome of investment in increased
satisfaction will yield different results depending on the market sector.
3. The period of analysis
The future period on which the analysis is based also has to be defined:
results for CLV will differ depending on the projected length of time into the
future or past (e.g. 3 years, 5 years, 10 years, etc.)
Building your own CLV model
Many different ways of measuring and calculating CLV have been developed, to suit
different trading situations and purposes. While the values calculated can only
be a guide to real future value, using the same formula over many customers
does at least give a fairly accurate idea of the comparative value of different
customers, or groups of customers. The calculation and use of CLV should be an
essential part of every business if maximising future profit is the objective.
Get all the facts, figures & practical help you need...
Our all-new report 'The Loyalty Guide III' covers all of this in detail, with
almost 1,000 pages of solid loyalty marketing data, practice, and theory -
everything you need to know in one global report. It explains customer loyalty
and engagement, metrics, best practices, concepts, technologies, models and the
latest tools and innovations. It's packed with detailed case studies, research,
market sizes, forecasts, models, charts, illustrations, and materials to
support new initiatives, presentations and proposals.
Find
out about the principles, practicalities, measurement, analysis, and
bottom-line effects of customer loyalty, and gain expert guidance from dozens
of loyalty marketing thought-leaders worldwide. Find out how to gather and use
customer data to increase customer profitability, reduce churn, and to monitor
and increase customer frequency, spending, and share of wallet. Most
importantly, find out where competitors are succeeding or failing, and why. The
complete executive summary, table of contents, downloadable samples, pricing
and ordering info are online now at http://www.theloyaltyguide.com
The
complete printed report can be ordered online today using any Visa, MasterCard
or American Express card, or payment by invoice. Order it now at http://www.theloyaltyguide.com/order
and be the best informed marketer you know.
Attracting
and retaining customers has never been more important to a company's bottom
line and overall financial health, particularly in today's challenging economic
climate, according to StreamServe's president, Chris Stone, who explains here
how to use trans-promotional messaging to close the gaps between a company and
its customers.
It's
a missed opportunity, and it's one that organisations are keen to address. While
marketers now understand the benefits of a technology platform that addresses
these issues, they also realise that the effort often involves a number of
challenges, including managing the many sources and formats of data input, such
as...
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Word-of-mouth
is one of the most powerful and trusted marketing sources, and brand promoters
may be worth more than was previously thought, according to a study by
Satmetrix Systems of the financial impact of positive and negative customer
word-of-mouth.
Building
on Net Promoter, Satmetrix has now developed the Net Promoter WOM Economic
Framework, which determines total customer value based on buyer and referral
economics. In the computer hardware industry, promoters spend an average of
US$203 more than the industry average of US$1,615, and account for about 50% of
new customers acquired through positive word-of-mouth...
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http://www.thewisemarketer.com/news/read.asp?lc=b26238ox2622zi |
The
online marketing firm Q Interactive has published the results of its 'Spam
Complainers' survey, jointly conducted with MarketingSherpa, having found some
serious problems with the way in which e-mail spam complaints are handled by
ISPs and marketers alike.
Among
the key findings of the study was the fact that the definition of spam has
effectively changed in the consumer's mind, as 56% said they consider marketing
messages from known senders to be spam if the message is not interesting, and
50% felt that too-frequent messaging was also...
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http://www.thewisemarketer.com/news/read.asp?lc=w86443jx2623zu |
E-mail
has become the UK's worst channel for customer service, according to the 3rd
annual 'Multi-Channel Customer Service Study' from e-service provider
Transversal, which found that e-mailed customer service requests are far less
effective than using an automated online system or calling a contact centre.
With
consumers increasingly demanding personalised service, e-mail should be at the forefront
of providing the kind of tailored responses that convert browsers into
customers. But an analysis of the survey's responses showed that too many
companies simply use the e-mail channel to push consumers into other
channels...
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Full story: |
http://www.thewisemarketer.com/news/read.asp?lc=r42994bx2619zx |
Marketing still to prove its real value
Despite improvements in the measurement capabilities and
competencies of marketers, and the availability of new resources and best
practices, marketing in general ... more
South Africa: eBucks goes even greener
A giant, indigenously-planted, eco-friendly maze
containing nearly 2,500 trees and shrubs has appeared in the heart of
Communication beats pay for keeping staff loyal
When it comes to retaining employees in tough economic
times, pay raises are overrated. According to the 2008 Management Action
programmes (MAP) Quarterly CEO Survey ... more
Customer focus initiatives are not often successful
According to a report by the Economist Intelligence Unit,
"Conquering Convergence," released by Oracle, companies in the
information, communications and media ... more
Aloha Airlines' loyalty programmes to continue
Aloha Airlines has announced that it has received US
Bankruptcy Court approval to continue operating as usual and has been
authorised to honour all existing ... more
Maritz Motivation partners with OurEnergy
Maritz Motivation has partnered with OurEnergy, a global
climate change solution provider, to offer carbon credits as a green employee
incentive reward option for its ... more
FNB loses court battle over rewarding accounts
In
Marriott Rewards offers unplanned walk-in redemptions
Members of the Marriott Rewards frequent guest programme
can now redeem points at the hotel front desk for free rooms at Marriott International
hotels in the
Consumers value security more than rewards online
Consumers value payment security and payment choice more
than rewards when making purchases online, according to a study by Jupiter
Research and online payment service ... more
LINDA extends PayBack partnership 'indefinitely'
The existing partnership between LINDA pharmacies and the
German coalition loyalty programme, PayBack, is to continue, having been
extended "indefinitely". According to ... more
Green Rewards continues UK launch preparation
Having recruited a chairman from Unilever, the start-up
green loyalty operator 'Green Rewards' (see ) has appointed a new managing
director from Procter & Gamble ... more
UK football club launches PayPass season card
Altair Financial Services has helped to create a
stadium-based contactless prepaid card for the
Colorado Rapids' contactless mini reward card
The 'Colorado Rapids' MLS sports club has introduced a new
'Rapids Kickback Card' rewards programme, provided by First Data. The new
rewards programme allows the team ... more
Really Simple unveils white label hosted CRM
The UK-based hosted CRM provider, Really Simple Systems,
has launched a white label hosted CRM platform called 'Really Simple OEM',
which allows CRM system resellers to ... more
You
can always read all the latest News Briefs by going to:
http://www.thewisemarketer.com/briefs
If
you know anyone else who might benefit from our free loyalty marketing news and
research facilities, please take a moment to let them know about us. Thanks, as
always, for your support.
So
keep well, and market wisely.
Until
next week,
Pete
Clark
Co-Editor
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