Find the end of the revenue rainbow with customisation

In the hierarchy of one-to-one marketing, customisation closes the loop and brings to fruition the previous steps I have been reviewing: identifying your customers, differentiating by value and need, and interacting with them. Now, using the tools available with technology, we can begin the process and apply the principles of customisation.

Broken promises utterly undo the premise of CRM and all the hard work that has gone into opening the channel with the customer.

Doug Leather, MD, Intact Solutions

It is in this phase that the marketing direction changes, from a focus on product or communication, service or value proposition to one centred on the learning relationship.

Notice that we are now not using our product or service as the driver of the relationship with our customers. Rather, the focus has shifted to the customer and their needs or wants, along with their value to the organisation. Products and services are accorded their right, secondary role in such a scenario.

This is vital: it is customers who drive revenues, not products; and, as a happy by-product, a higher market valuation is likely to be accorded a company demonstrating the ability to deepen its share of customer, along with share of market.

In essence, this means changing our corporate behaviour to meet the specific needs of individual, most valuable or most growable customers.

This we do by tailoring elements of our products or services, while in parallel remembering the transactions, history and specific preferences of customers. This enables the learning organisation.

This allows you to anticipate the needs of the customer and ask such questions as:

• .         How can we customise our product/service mix for the customer?
• .         Can we think of any examples outside of our company to enhance the learning relationship? This could mean buying and importing third-party data to provide deeper context.
• .         What new products or services can we offer you? If we identify what it is you want, and we have confirmed your propensity to buy it, do they have to be produced or provided out of our organisation? After all, while we can`t be all things to all people, we can create the alliances or relationships with outside parties to fulfil customer demand.

The focus here is on retention and growing the customer.

Let`s look at the example of car finance. Currently the onus is on automotive manufacturers and their value chains to sell you a car. But why should it not be the car finance companies? It makes sense: they gathered key details when you applied for finance. They know a lot about you, now they need to gather further information so as to improve their understanding of your propensity to buy. They can then proactively offer you the appropriate car and ensure that you place your future business with them. Based on your previous car-buying history, and the events which have occurred in your life - promotion, becoming a parent - you could become a candidate for a very different kind of car to the one you`re currently driving.

The alternative would be to leave the next transaction to chance: that is, let the salesperson recommend the choice of car finance.

A major issue to consider with customisation is relevance: offering the right product or service to the right customer. And you need follow-through, which is at the very heart of CRM. This must apply across all channels: currently few companies are as responsive via the Web or e-mail as they are via the phone. Broken promises utterly undo the premise of CRM and all the hard work that has gone into opening the channel with the customer.

To assist the organisation in being able to remember customers` actions and interactions, and to encourage tighter profiling, companies would typically embark on customer-centric initiatives such as incentive clubs and outreach programmes and loyalty campaigns.

Note that customisation is different to personalisation, in terms of which content is tailored to reflect recent interactions and propensity to buy. Amazon.com does both, personalising and customising content and interaction, based on segmentation and learning relationships.

In every sense Amazon has set the tone for the rest of the industry, driven by Jeff Bezos` insight of what technology could do. As a foundational layer, Amazon created the ability to capture all customer details at the point of interaction so as to learn more about each customer and project a tailored offering and personalised experience to each one.

Just what impact this process of customisation can have on the business` bottom line is made apparent in a recent report, "One to One in Financial Services: New Strategies for Creating Value Through Customer Relationships". Prepared by Peppers & and Rogers, Financial Services Marketing magazine and Roper Starch, the report says three in 10 consumers experiencing good relationship management say they will likely add one or more products or services; and 55% of consumers who rate their primary financial institution high on service quality and CRM say they are "very likely" to consolidate their business with one provider.

Don Peppers notes: "Finding the end of the revenue rainbow requires financial service firms to actively become solutions providers, using rich customer data to anticipate the banking, lending, brokerage and insurance needs of individual customers."

** Some Peppers & Rogers information has been invoked, with thanks.