Stable relationships with unstable customers (part 2)

Can you make money by helping your customers save theirs?

Traditional marketers would say “no.”  The goal is always to get customers to dig deeper in their wallets for a need that they have or one that you have helped create for them.  Cross-sell, upsell, incremental purchases…all ways that marketers justify with ROI the goal of getting customers to buy more, now.  After all, in this economy, it is hard to convince management that long-term wins are important, in this so “short-term win” focused world.

I am not here today to rail against the injustices of the world, or to suggest that altruism is the answer to the world’s economic crises.  But, as relationship-focused marketers, we have to ask ourselves that if we have a short-term transaction goal, at what point will our customers figure that out?

The answer is now.  More and more, customers are becoming accustomed to being their own “intermediary” and seeking out deals and values that meet their needs, with less and less outside help.  Companies are competing more and more on price, and trying to drive more volume from customers without proof of their interest, let alone their needs.  Offers are being extended more and more often, and you can get almost any price offered if you come into a store or contact a salesperson and ask for it.

This week, I received four emails from Jos. Banks, the men’s clothing store.  First, I received several notices as a regular customer, announcing and then extending sales, and then I received notices as a business customer, announcing and then extending sales.  The sales were broad, store-wide and not designed to meet any specific need.  What do these sales tell me as a consumer?

1. The company does not know that I am a business customer, since they emailed me as a regular consumer as well
2. If you wait, you get better deals
3. Expiration dates on sales are flexible

Now, I do not want to knock Banks.  I like their clothes and find their salespeople to be excellent.  Yet at the same time, I wonder if HQ is doing them a disservice.  By promoting frequent sales and changing dates, they are telling customers that price should drive their purchases, rather than a need or the relationship with the salesperson.

So how do we, as relationship-focused marketers, drive enough growth to the bottom line to keep our jobs, while still living up to the goal of building long-term relationships.  I think there are three strategies to allow us to balance the short and long term needs of our business:

1. Segment, segment segment. Identify which of your customers are “cherry pickers” (who purchase solely heavily discounted merchandise), price driven shoppers (who may buy other items based on needs after getting to the store, and high-value relationship customers (who by first on need and then on price).
2. Communicate to customers based on their needs, rather than on your goals. Speak to each of those customer segments in their language, and provide whatever personalization you can, to let them know you understand that they are unique individuals.
3. Structure pricing and offers to permit personalization. Instead of flooding the store with discount signs, run personalized offers and special events, to appeal to customers needs without “contaminating” the rest of the base with a strategy appropriate to just one segment.
4. Measure the results and refine.  Never let “well enough alone.”  Look at changing the messages, timing and targeting to improve results.  Run 2-3 pilot programs every time you campaign and then incorporate the winning results into subsequent waves.

Look, we all know that the holidays are tough times for sales.  Customers are out there shopping, but being highly discriminatory about when they actually open their pocketbooks.  The question is just how we will engage with them, not if.  We cannot be holier than thou and refuse to bend with the times.

But at the same time, we have to keep to our guns, hold the customer-centric principles strongly and find ways to compromise.

What has been your experience balancing on this fast-moving economic wave?

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Tagged as: customer centric, customer segmentation, Database marketing, Marketing, personalization