The appropriate decision-makers in many companies will have come to the conclusion that transpromo is good for them, but they're not sure if their company is ready for it.
Here are 11 questions that can be asked, which will guide companies in their decision-making process. These questions and their answers will ultimately determine whether companies should look to transpromo to grow their sales.
To recap, transpromo (transactional/promotional) is the process whereby companies use their existing transactional items (statements, invoices), which carry an inevitable and unavoidable cost (a sunk cost), and transform it using customer data to target customer segments, or individual customers, with highly customised, even personalised offers.
To transpromo or not to transpromo
Not every company can do transpromo today, it must be said. There are factors that will inhibit the take-up and acceptance of transpromo, and those that will encourage it. So run through these questions and see where the company stands:
1. What information does the company have on its customers and what is the best way to target them? The more a company knows about its customers, the better, as it has a greater chance of segmenting its customer base by variables: current value, future value, existing product set, propensity to churn.
2. What is a company's current market position? Is it a start-up trying to carve a market niche, a contender trying to grow market share, part of a cartel with little real competition, or a market leader with real and identifiable competitors seeking to take market share from the company? If it is in the last-named category, transpromo is suitable.
3. How often does the company communicate with its customers by post? If it communicates on a regular or, even better, on a monthly, predictable basis, transpromo will be beneficial for the company.
4. Does the company own the relationship with its customers, or does it work through intermediaries? Transpromo works best when a company directly owns the relationship with a customer, rather than having to work through a mix of direct/indirect, or fully indirect.
5. Does the company market a single product or multiple products, and within a single category, or multiple categories? The optimal mix is multiple products within a single category, such as many cellular offerings.
6. Does the company have customer retention as a high priority? In a competitive market, or even in a semi-cartel market, such as is seen in some South African market sectors, customer churn is a huge problem. Reducing this and enhancing customer retention is a goal well served by transpromo.
There are factors that will inhibit the take-up and acceptance of transpromo, and those that will encourage it.
Konni Hoferichter is MD of LaserCom.
7. Is there significant scope for cross- and up-sell in the company? Any company that wants to sell more products - financial services - or increase the share of wallet per customer - cellular - would be advised to use transpromo.
8. What is the company's level of data maturity, and who owns the customer database? The ideal is that the company should have a well structured, high-quality database with marketing having unrestricted access. The moment IT starts to impose restrictions on data access, transpromo begins to stutter.
9. Does the company already insert messaging in its statements and invoices, and if so, of what quality and level of detail? If the company is already inserting generic marketing messages and generic on-statement adverts, it is ripe for transpromo, as the learning curve is relatively flat.
10. Who controls the marketing messages in the company's transactional items? The ideal answer is a hybrid of billing and marketing. If only billing controls this messaging, the marketing folk will struggle to obtain buy-in and broad acceptance of transpromo.
11. What is the culture of direct marketing in the company? Most companies will have a conservative approach, but be receptive to new notions that make sense. The ideal is that management should have a dynamic, progressive culture, which is always receptive to new ways to work with customers and drive value.
Transpromo is, unquestionably, one of the most exciting and attractive new marketing and communication opportunities in the market. These tips should help identify a company's state of readiness.
* Konni Hoferichter is MD of LaserCom.
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