The future of CRM

Understandably businesses are increasingly obsessed with customer loyalty - both emotional and financial. Customers are harder to win over, as the mantra goes - they are in control.

So how long will it be before businesses offer customers stock to stay loyal. It is the perfect arrangement. If you like us you can be part of us, every time you buy something you get a little bit of us in return. And of course customers will be less tempted to go somewhere else because they will feel the company is 'theirs' - even if they only own 10 shares. It does not have to be tricky. Take Tesco, they could buy back stock and hand it over to customers for club card points at the year end. 'I go there so often i should have shares in the place' will be a reality.

The means of production will fall into the hands of the workers to paraphrase the German bloke - it would just be ironic that shares the symbol of capitalism will be the mechanic that makes it real.

Suicide and customer satisfaction

Sweden is the 7th happiest country in the world based on a Leicester University study, Denmark just a few miles away is no 1. But they both rank extremely highly in the international suicide rate table. For that matter where do you think Switzerland -not unassociated with suicide ranks? ... that's it, 2nd in happiness.

This research is based on a questionnaire along the lines of how happy are you (there are other more sophisticated ways of measuring happiness). But it illustrates a really important statistical point.

If you take all the unhappy people out of your happy survey or they exclude themselves by virtue of suicide then your national happiness score will increase. So any happiness survey needs to find a way of accounting for this, perhaps including their responses until they would have reach the average life expectancy, but that doesn't sound right either. Exactly the same logic illustrates why the FTSE 100 does not reflect the fortunes of the economy, it is because the companies that perform worse fall out of the index. It is called survivor bias, which takes on a whole new meaning when you relate it to happiness and suicide.

And the point. By the same logic we should not exclude customers who have moved to a competitor from our customer satisfaction scores; if we want to use customer satisfaction as an indicator of how we well we are servicing customers. The smarter way to measure this is to use a composite score underpinned by churn, customer sat, net promoter scores. Otherwise it is conceivable you would see customer sat increase side by side with customer churn.

I now have to explain to the family why i have bookmarked a couple of pages on suicide statistics.

When choice drives women crazy - Times Online

When choice drives women crazy - Times Online

Another article highlighting the confusion created by too much consumer of choice - in this instance in technology, if you get a chance do read the 'paradox of choice'. Still think it is the best, most rigorous book on the subject.

And whilst i am on there was a feature in the daily's ridiculing labours 'minister of spin'. apparently he had circulated emails discussing 'behavioural economics', 'loss aversion' and other madcap ideas to MPs.

Not sure what to make of this. Is the take out that MPs are too thick to understand it or that that the ideas are too way out there. I suspect the problem is that it is difficult to always express new ideas on one page in 5 sentences with double spacing.

Reinvigorating brand Santa (reprise)

The present situation

Santa has won the hearts and minds of his customers. But growth is fuelled by population expansion, retention rates are average at best. The customer relationship starts round age three and fades ages 7 to year 9. Santa is privately owned so there is no financial reporting requirement. The business model is hazy; it is not clear how Santa makes its money. To grow the business you require cashflow or substantial capital. Property lease back is a non starter; they only seem to have seasonal concessions within a variety of retail outlets. Lapland HQ is not practical for other businesses of this scale, so you wont be able to find alternative tenants. Opportunity cost of these assets would seem to be close to zero.

The solution to turning Santa around must lie on the revenue side of the equation.


Our recommendations.

1. Brand identity. Santa, St Nicholas, Father Christmas, Papai Noel, Babbo Natale – the different names dilute the brand. Choose one name and stick to it. It worked for Snickers. Whilst a name that resonates with the Chinese market is tempting we feel an English name provides the greatest global reach. SantaServices gives you brand stretch.

2. Create added value services e.g. charge for different delivery options, delivering on Christmas Day should be the premium not the standard service.

Why not charge for returns or provide warranties? It estimated that 15% of presents are damaged on Christmas Day. This must be a significant revenue opportunity.

3. Merchandise yourself how about replica kits for children; think laterally! What would be the equivalent of the soccer away strip? What about a light suit for hotter climates. Don’t be a slave to red.

4. Investigate sponsorship opportunities. Formula 1 would offer the best benchmark. Look for brand synergies, but obviously avoid competitors like DHL, red letters days unless there is a clear income opportunity.

5. Share of hearts. Make sure Santaservices.com is on all packaging and clothing. “This present was bought you to by Santaservices.com” reinforces the brand.

6. Embrace digital. Letters posted up chimneys is a nice touch but difficult to believe it is practical. And this hardly good for the environment. Email has to be the way forward. Make the website work harder, a personalised web experience is essential. And of course this year we are expecting mobile technologies to take off so integrating SMS is a must.

7. Brand experience days help your best customers embrace the brand. It is probably Pizza Express No.1 marketing activity. Children come along make Pizzas in the morning and pester their parents in the afternoon to return in the evening - and they pay for it.

8. Business continuity. Business is over-reliant on one man; no one is going to invest in a business without a clear succession plan. Consider an X-Santa type show.

Give Mrs Santa more of a role cf Cameron and Brown. Older men into children can be perceived as unusual e.g. Michael Jackson.

9. Go beyond the seasonal demand. One day a year! Enormous opportunity even if we don’t go 24x7x365. Of course it is possible more frequent Christmases may be difficult to market but the core competence is distribution and logistics. Look to provide corporate outsourcing solutions.

10. Develop a retention program for teenage into adult years, you know all about random acts of kindness. Make sure the C in CRM stands for Christmas.

11. PR. Appearance is everything. Looking that comfortable in the present climate does not seem appropriate. Even Puff daddy is forgoing bling in concession to the crunch. Obesity and children is a hot topic. We really do live in an age of style over content so think about going on TV with Gok or Gillian Mckeith.

12. Crisis management. Don’t get pissed in public even seemingly indestructible can be destroyed with 1 or 8 moments of madness. (Tiger Woods)

B2B Marketing: Lessons learned in 2009

Nice to see what we have been saying echoed. Have not heard of the companies in UK but not the point.

B2B Marketing: Lessons learned in 2009

View more presentations from The Bridge Group, Inc..

Seductive sponsorships

My indisputable hypothesis is that the bigger a sponsorship opportunity is, the harder it is to control it for the benefit of your brand. So i wonder why more brands don't sponsor lots of smaller events or the less well known sports. Understandably you are unlikely to hear 'lets own fell running, curling and netball' from a board table thumping CEO but there again smaller events tend to be more grateful and consequently do more to make sure the sponsorship works, they package it and activate if for you. Of course you don't get the reach but you do find consumers keener to repay the commitment. Estate agents and solicitors often find sponsorship of the local sports club pays back in revenues, social bonds being more powerful than financial ones. (see Predictably Irrational, Nursery school experience)

So when i am head of marketing for Bernard Matthews, Krispy Kreme or ACME I'll try to remember.

1) When i am offered a big sponsorship opportunity, look for a series of smaller simpler events that could potentially achieve the same results.
2) Look for opportunities before i am asked
3) Make sure it fits the business (before someone says anything obvious)
4) Think of sponsorship as earned rather than paid media i..e the cheque is only the beginning of a great relationship

Unless of course my new boss likes football and wants tickets to the world cup final. In which case i will pretend my 6 year old wrote this.

Second order decision making

Second order decisions are the rules we make up in our lives either to avoid making complex trade offs or remove the need to continuously reassess everyday choices.

So for example ...

* Sticking to one commute route regardless of traffic and weather conditions
* Putting your credit card in the freezer to avoid over usage.
* Deciding to buy - before entering the shop - what ever shower gel is on offer.
* Selecting an IFA you like rather than researching the product itself.
* Repeating your grocery order on line.

Identifying which decisions (and when) are second order and which are primary is a really good way to think about both categories and consumer decision making. If your market displays a high degree of second order decision making then the chances are the persuasion model of marketing may be less effective, your job is to break the habit get consumers to do something different.