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Previous Blogs:
OMG! It's The First AVALA Blog
Finding, Winning and Keeping Your Customers
What Is eMarketing, And How Is It Better Than Your Grandfather's Marketing?
CSI In Tough Times
The Case Against "The Ultimate Question"
Leading The Way |
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OMG! IT'S THE FIRST AVALA BLOG
Oct. 23, 2008
It seems like every marketing guru has a blog these days. So, when I was first asked to write one for my company, The AVALA Marketing Group, I guess you could say that I was a little apprehensive. How was I supposed to differentiate my marketing blog from the other 18 million (no joke) out there?
Then, it occurred to me that I was over-thinking the process. It wasn’t my job to come up with a creative “spin” to make our company (and its blog) sound wonderful and different. All I had to do was let our uniqueness speak for itself.
To wit, one of the first things you’ll notice when you visit our website or look at any of our literature is our tagline: “Connecting Brands with Consumers." That’s a good place to start in this “getting-to-know-you” blog.
Take a look at the phrase “Connecting Brands with Consumers” and you’ll notice that it doesn’t say anything about conveying marketing messages or orchestrating integrated campaigns. That’s the “push” mentality of 20th Century marketing — which many of us still use successfully at times.
But marketing philosophy has changed in the past decade thanks to TiVo and mobile media and online chat rooms, and AVALA has changed with it. Our job now isn’t to force-feed information through a one-way channel. It’s to nurture connections. It’s to help consumers identify with brands and facilitate back-and-forth conversations.
Which all sounds very warm and fuzzy, but what does it mean in practical terms? It means giving our clients access to streaming video and text capabilities, e-mail broadcasts, interactive community websites, consumer modeling and segmentation analysis, sophisticated lead management systems, and customer satisfaction research with 24/7 online reporting. And that’s just for starters.
The bottom line is that AVALA is nimble, adaptable and always plugged-in to what is going on with our clients’ brands and their consumers. Our role is to share this access and intelligence with our clients. At the core of our marketing philosophy is a unique approach in which we find, win and keep customers. Join me next time as I go over each of the three steps in more detail.
-- Brad Kovach, Director of Communications
FINDING, WINNING AND KEEPING YOUR CUSTOMERS
Nov. 3, 2008
In my previous blog, I introduced AVALA’s role in the agency-client relationship — always being plugged-in to what’s going on with consumer communities, and sharing this access and intelligence with clients — which is summed up in our tagline “Connecting Brands with Consumers.” I also touched on our unique three-phase approach, which is designed to find, win and keep customers for our clients.
That sounds simple enough. Surely, any marketing agency can do the same things … right? Wrong.
The reason AVALA has been so successful in helping our clients extend their presence across multiple channels and enhancing their relationship with customers is because we approach things differently. Our clients don’t spend a dollar on a marketing program until they have a clear picture of their customers and prospects, as well as their competitors’ customers.
That’s the first step in our approach, called Customer Identification, or finding customers. Our in-house team of information technology professionals uses advanced methods to analyze market share and identify specific consumer segments using detailed demographic and lifestyle characteristics. We perform brand perception and awareness research, and build competitive comparison databases. We even mystery shop.
We do everything we can to lay a foundation of knowledge so that we and our clients can clearly understand buying behavior and identify growth opportunities in the marketplace. This way, our clients know that we’re not gambling with their money when we move on to step two: Customer Conversion, or winning customers.
Simply put, the goal of Customer Conversion is to take the knowledge gained in step one and use it to create strategically-targeted marketing campaigns for our clients’ brands. This step encompasses the “traditional” marketing we’re all familiar with: brand advertising, direct mail, sales brochures and catalogs, product videos. AVALA has an award-winning creative staff with a combined total of 100+ years of multidisciplinary experience.
Beyond traditional marketing, we also have a progressive interactive/e-marketing department that can carry out e-mail broadcasts, web banner creative and placement, e-newsletters, electronic Customer Relationship Management (eCRM), mobile media solutions, search engine marketing and more. This allows us to fuse traditional and digital media to communicate effectively across multiple channels.
Once we’ve created a sense of urgency for prospects to become hand-raisers and for hand-raisers to become customers, it’s time to move on to step three: Customer Retention, or keeping customers. Holding on to your customers is key because loyal customers are more likely to repurchase and refer others. (Plus, it takes a lot more time and money to repeatedly win new customers.)
So what’s the easiest way to make customers stick around? Keep them happy. This comes from top-notch customer service and benefits programs.
AVALA uses sophisticated Customer Satisfaction Index (CSI) research to identify why customers are happy or unhappy, then tells our clients how to interpret and use this data for retention. We also develop and manage loyalty programs, incentives and events to enhance the ownership experience and create positive word-of-mouth and recommendations.
If you think that anyone can follow the same philosophy and get the same results, consider that most agencies specialize in maybe one or two of the steps outlined above. They may understand AVALA’s approach, they may admire it, but they can’t deliver it. Few marketing agencies can provide the comprehensive range of services that we do — guiding our clients and their customers through the whole buying cycle and creating a superior ownership experience.
And if you’re not getting the whole experience from your agency, what are you really getting?
-- Brad Kovach, Director of Communications
WHAT IS EMARKETING, AND HOW IS IT BETTER THAN YOUR GRANDFATHER'S MARKETING?
Nov. 10, 2008
“What’s that you say? eMarketing? Well, that’s the same as regular ole marketing but done with the Interweb thingy … right?”
Yes and no. Simply put, eMarketing refers to the application of marketing principles and techniques via the Internet and other electronic media such as cell phones and PDAs. But there’s a big difference between traditional marketing and eMarketing. Over the past few years marketing’s “electronic cousin” has developed into a standalone discipline with its own benefits and objectives.
eMarketing gives even small companies a truly global reach. It’s fast, adaptable, easily measurable and — relatively speaking — it’s cheap. More and more often, eMarketing is being used to develop leads and manage customer satisfaction by delivering quality, convenience and customized interaction. At its best, eMarketing can help create “customers for life.”
But let’s back up and talk a little about how the Internet has changed the present dealer network. In the past, customers came into a dealership at the point of interest, looking for information and just beginning the buying process. Now, by the time they enter a dealership, most customers believe they know everything they want and are all the way through the funnel to the point of sale.
So the question is: How does today’s dealer make a connection with his or her customer before they walk through the door? The answer: eMarketing.
A Compelling Web Presence
The Internet offers many eMarketing tools, the most familiar of which is the website. By now, we all know that a dealership website acts as an online extension of the business and should present a clear, valuable and consistent message. It’s often the initial point of contact with consumers, and it needs to make a good first impression.
As a leading provider of interactive strategies and customer relationship management for premium brands, The AVALA Marketing Group has developed a series of best practices for maximizing website structure, including:
- Make sure your URL/domain name has a clear correlation to your business.
- Include your dealership logo, accolades, location and hours of operation.
- Update your content frequently, especially product inventory and pricing.
- Use high quality photographs, plus exciting graphics and detail.
- Double check that the site loads properly on all browsers.
Finally, and most importantly, the site must be able to capture visitor data and convert it into sales leads. This can be accomplished through required registration, a request for the information, entry into a sweepstakes, subscription to an online newsletter, etc.
Building Customer Relationships
What’s the number one reason dealers don’t get a customer’s e-mail address? They forget to ask for it! This is a huge missed opportunity.
E-mail marketing is without question the lowest cost, highest return marketing channel available today. A competent creative associate or outside agency can create an e-mail campaign template in a few short hours. Add in some copy-writing time, and your dealership has a series of targeted e-mails that provide direct communication to your leads and customers throughout the year.
Taken a step further, an electronic Customer Relationship Management (eCRM) campaign contacts your leads and consumers at regular intervals — between 10 and 15 times annually — and it’s not always to pitch a promotion. eCRM touch-points can be invitations to special events, birthday or holiday cards, service bulletins, enewsletters and other value-added communications.
The bottom line is that happy customers are the lifeblood of future purchases. They typically remain customers longer, buy more often and refer more of their friends than do those who are dissatisfied. An ongoing campaign to existing owners is the most effective way to ensure that they will become lifelong customers.
The Future of eMarketing
With the arrival of mobile technologies, eMarketing has stretched even further. Projections indicate that by 2010 some 540 million households worldwide will have broadband Internet access. At the same time, 3.4 billion (that’s billion with a “b”) cell phones and PDAs with interactive capacities will be in use — nearly seven times the reach of computers.
Short Message Service (SMS) is a means of sending and receiving text messages via cell phones. You can use it to notify leads and customers of special promotions, receive requests for more information, send service reminders and more. Think “texting” is limited to your 14-year-old daughter and her BFF? Think again. The technology is already being utilized by marketing powerhouses like Coca-Cola, Starbucks and BMW.
Like it or not, we’ve entered the 21st century, or in some cases been dragged into it kicking and screaming. Consumers have already embraced the online communications environment. Harnessing the eMarketing tools that can create customer relationships and extend the brand experience is the key to succeeding in the new consumer-centric marketplace. Don’t let the digital boat buyer pass you by!
-- Ken Rohman, Director of Interactive Strategy
CSI IN TOUGH TIMES
Nov. 17, 2008
The increasingly competitive recreational/leisure products market has many builders looking critically at expenditures in an effort to determine which programs can be cut back or eliminated. One program in almost everyone’s headlights is customer satisfaction (CSI). If profitability is under attack, shouldn’t CSI be a natural place to save a few dollars?
The answer is not as simple as it may seem. CSI serves three distinct purposes: First, it is a customer contact/touch point; second, it is an informational tool; and third, it is a diagnostic tool. Let’s discuss these purposes briefly.
During the ownership experience, manufacturers and dealers have several opportunities to contact or “touch” their customers. It is well documented that (1) consumers weigh (among other things) the positive cumulative value of these contacts when deciding whether to repurchase a product and (2) the fewer the contacts, the higher the likelihood of customer defection.
As an informational and diagnostic tool, CSI is a window into the customer’s mind and can provide significant insight into a customer’s intent with regard to loyalty, retention and defection. Customers satisfied with the right things are much more likely to repurchase or be retained as owners, while dissatisfied customers are much more likely to defect.
Defection represents a direct impact to you, specifically lost revenue. Customers’ communities (everyone they know) represent a well known indirect impact; that is, customers inform some portion of their community of contacts about their experience(s) with you — good or bad. Generally speaking, negative experiences will get more airtime than positive ones. Again, the potential is for gained or lost revenue.
What is less well known is that dissatisfaction can have many of the characteristics of common diseases. For example, dissatisfaction with specific aspects of the sales, service and/or ownership experience, if left “untreated,” will continue to grow and eventually “kill” the relationship, perhaps quite unexpectedly to you. On the other hand, dissatisfaction “detected early” and “treated” will, some percent of the time, provide a “cure.”
So back to the original question: Is CSI an expenditure you should look at cutting out? Here’s a simple exercise that should answer your question. Look at your most recent quarter of CSI scores for sales, service and/or ownership experience. Note the percentage of “overall” dissatisfied responses. It’s probably in the 3 to 15% range. Multiply your annual unit sales by this percentage. This number is your total probable defectors. Take 40% of this number — this is the number you will likely retain by solving their dissatisfaction — and multiply by the average profit per unit. Compare this number to your CSI expenditure.
The high value for CSI comes with those customers who, although dissatisfied, can have their dissatisfaction turned around by a timely and satisfying intervention. If you haven’t evaluated the cost effectiveness of your CSI program expenditures, AVALA can do it for you. In these competitive times, it will be some of the most efficient money you can spend.
-- John E. Dillard, Jr., Co-Founder
THE CASE AGAINST "THE ULTIMATE QUESTION"
Dec. 8, 2008
If you’re not familiar with the term Net Promoter Score (NPS), you should be. Many marketers believe it to be the ultimate measurement for determining customer loyalty and the potential for future growth of a company. Because if its simplicity NPS has become increasingly popular among large and small businesses alike. But in some cases, easier does not necessarily mean better.
In 2003, loyalty business model expert Fred Reichheld published a now well-known article in Harvard Business Review titled “The One Number You Need to Grow.” In this article, Reichheld introduced the idea of NPS. This metric is based on an 11-point “likelihood to recommend” scale, which is driven by the following survey question: On a scale of 0 to 10, with 10 being “extremely likely” and 0 being “not at all likely,” how likely is it that you would recommend [product or service X] to a friend or colleague?
Based on their responses, customers are categorized into one of three groups: Promoters (those who responded with a 10 or 9), Passives (8 or 7) or Detractors (6 to 0). In the NPS framework, Promoters are viewed as valuable assets who drive profitable growth because of their repeat purchases, longevity and referrals. Detractors are seen as liabilities that destroy profitable growth because of their complaints, reduced purchases and negative word-of-mouth.
NPS is calculated by taking the percentage of Promoters and subtracting the percentage of Detractors. If a company’s “growth engine” is running at perfect efficiency, it will convert 100% of its customers into Promoters. The worst possible “growth engine” will convert 100% of its customers into Detractors.
According to Reichheld, NPS can be used to motivate an organization to become more focused on improving products and service for customers, and can help management make the right decisions to facilitate growth. Reichheld further claims that NPS is more actionable than customer satisfaction because it links directly to revenue growth, that NPS is the single most reliable indicator of a company’s ability to grow.
In March 2006, Reichheld published what became a best-selling book entitled The Ultimate Question: Driving Good Profits and True Growth, which further touted NPS and encouraged companies to “ask the ultimate question” — the “would you recommend” question.
This leads us to the natural question of should customer satisfaction be abandoned in favor of NPS? The answer is emphatically no and here is why:
1. NPS does not always give a clear picture of what is working with consumers and what is not, and therefore does not provide all the necessary insight into why someone is a Promoter or Detractor, or what needs to be done to potentially rescue a damaged relationship.
2. NPS does not provide any sense of how you are doing versus your competition. Is an NPS of 25 good or bad? What about 30 or 45? We know an NPS of 70 is quite good for some large companies, but does an acceptable NPS vary by firm size and industry?
3. There is increasing evidence that NPS may not be as strong a measurement as initially thought. An article in the July 2007 issue of Journal of Marketing found evidence that NPS was not superior to other satisfaction measures, such as the American Consumer Satisfaction Index (ACSI), as Reichheld had initially reported.
Still, calculating a NPS is not without its benefits. On top of giving an indication of future growth potential, NPS identifies Passive customers, which is critical because these customers are usually the most receptive to retention programs. In high-end industries like marine, automotive and RV, converting Passives to Promoters can translate to millions in profit.
To create the “ultimate” customer satisfaction surveys, you should include a “would you recommend” NPS-type question as well as an open-ended question on overall product satisfaction and service. Open-ended questions are one of the most vital tools for those who sell because they help gather information, qualify sales opportunities, and establish rapport, trust and credibility.
Be sure to attend to unhappy customers as quickly as possible. Statistics show that approximately 40% of dissatisfied customers can be shifted back to the satisfied column by timely intervention and solving of whatever problem existed for them.
It takes a comprehensive CSI program to maximize customer loyalty and retention. While certainly another valuable component in calculating overall customer satisfaction and for moving focus toward long-term value in positive customer relationships, NPS is not a magic formula.
-- John E. Dillard, Jr., Co-Founder
LEADING THE WAY
Dec. 16, 2008
Every salespersons’ dream is to have a qualified customer walk into the showroom, point at a boat (or RV or ATV) and walk away a happy new owner.
To turn that dream into reality, all recreational product manufacturers and their dealers need to effectively manage leads. The reality is this: Manufacturers of recreational products spend an incredible amount of time and money determining the most effective strategy for advertising and product collateral, yet when a prospect raises his hand as if to say, “Hey look at me, I’m interested in your product and want to become engaged with your brand,” the process breaks down.
If you spend a sizable amount of dollars on advertising, media buys, collateral product brochures, and dealer co-op money, why would you not invest the same amount of strategic insight into how you handle your hand-raisers?
The trip from making contact to closing a sale is a long one, and advertising will only get you so far. How do you turn product awareness into sales? How do you turn those hand-raisers into customers? The answer: By taking careful time to manage leads in order to carry them through to the closing process.
The biggest area where companies fall short in lead generation is follow-up. A study AVALA performed within the recreation industry to measure the effectiveness of lead management systems revealed that less than 10 percent of the leads receive any follow-up. Of the companies that do follow up, less than 5 percent customized their communication based on the prospects’ buying needs or triggers.
Why would you focus so much on brand awareness and customer identification to generate leads that you never contact, or if you do make contact, ignore their needs? It doesn’t take huge budgets or a marketing genius to successfully manage a lead. Simply knowing your leads’ needs and customizing follow-up makes a big impression and can turn a prospect into a customer.
One of the problems, as well as the solution, is technology. We’ve become so used to technology doing all of the work that we hide behind it. It’s easier to send an auto responder or email blast than to customize a response to each individual.
But in a niche industry like boating, the internet should be used as a 1:1 tool, just like a personal phone call. Systems today can manage thousands of individualized contacts — whether through customized emails, personalized URLs or digital direct mail, and they can be done at a low cost.
Don’t let technology be your crutch or your savior; it’s one piece of the puzzle to create a more effective lead management system. Remember that any form of ongoing communication, whether with a prospect or an established customer, is key.
-- Steve Pizzolato, Co-Founder and President
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