Customer Contact Strategies: Relevance is the key to turning your customer relationships into revenue

If only consumers would tell us what offers are most important to them and which media channel they prefer for communication when they are ready to buy, we could save ourselves a whole lot of time and money.

But as merchants, we know that consumers have a difficult time telling us what they want, which is why we invest so much time figuring it out. Short of having each customer fill-out an opt-in form that states exactly why, when, and how to communicate to them, marketers need to develop contact strategies to create messaging relevance.

Customer contact strategies can improve the relevance of a marketing piece to drive significant sales increases. We have seen one multichannel retail client experience a 30% lift in average order size from customers who received targeted e-mails based on their attitudes and product affinity. In short, customers respond better to communication that is relevant to their lifestyle, needs, and aspirations.

Optimizing customer contact strategy requires using advanced segmentation models that go beyond demographic information to understand what attitudes and behaviors motivate consumers to purchase. Creating a contact strategy answers critical questions about consumers: Do they value convenience? Do they respond to a strong connection with the brand? Are they motivated by altruism or activism? Which channels are driving looks and inquiries, and which channels are netting sales? Understanding these factors enable marketers to optimize each key variable that goes into customer communication: offer, message, creative, communication channel, timing, and frequency

Developing a customer contact strategy requires a segmentation framework that is driven by a multitude of customer intelligence gleaned from behavioral data, demographic information, research, and survey information. When leveraged optimally, this information provides a robust foundation for predicting what messages and offers will resonate with specific customer segments, through which preferred channels, and at what preferred times to deliver the maximum value of your marketing investment.

This segmentation framework is a multilayered system that might combine customer value, customer potential, life stage/lifestyle, or “needs-based segmentation” and attitudinal segmentation. Typically, we advise our clients to start simple, for instance, by focusing on tailoring creative or offer by segment and building from there by testing, measuring and refining over time. In one instance, we’ve seen a client successfully use a customer contact strategy just by varying the cover of a catalog by segment based on attitudinal disposition – features vs. price sensitivity. Regardless of how one focuses for initial implementation, it’s critical for retail marketers to begin building contact strategies that inform targeting and enhance relevancy.

In today’s highly competitive retail environment, creating meaningful relationships with existing customers is critical to profitable growth. Customer contact strategies can help create differentiation by appealing directly to the needs and attitudes of multichannel customers. Communicating relevant messages to customers will deliver increased revenue and ultimately build customer loyalty.

Marc Fanelli is senior vice president of decision sciences, for Schaumburg, IL-based Experian Marketing Services

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