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Don't let false assumptions drive your customer communication strategy

Companies often assume they know their customer base and then dial in customer communications. Here are three tactics to truly connect with customers.

Companies often assume they know their customer base. They trot out the same tired emails and fail to question...

whether they are reaching the right people -- with the right products. As a result, they tend to proceed blindly in their marketing campaigns and dial in customer communications.

But companies periodically need to re-evaluate their assumptions and check in on the health of their customer communication strategies. Here are three tactics to ensure your methods are on target.

1. Are you ignoring key customer segments?

You could miss out on new business because of perceived brand positioning. At the end of the year, audit your overall brand message and determine whether it creates opportunities or limits your growth.

Over the past couple of years, Buffalo Wings & Rings, a chain of 55-plus sports restaurants with locations around the globe, has refined its brand appeal to women and families to reach a larger universe of customers.

As part of that effort, the chain redesigned its locations. Specific changes included soundproofing the restaurant area to reduce the noise generated at the bar, where sports events are broadcast; adding cushions to seats and benches for greater comfort; and relocating children's games away from the front door and the bar area.

In addition, Buffalo Wings revamped its website so customers could interact, get information, and create a community. "Your brand is created by customers and how they use you," said Buffalo Wings CEO Nader Masadeh. This year, sales at the chain have grown 12.5% to $72 million. Next year, the company plans to add up to eight new stores in the U.S. and 10 overseas.

2. Are you communicating effectively?

Customers vary in their preferences for communication. Core customers may not want to use a certain communication method. So, challenge your assumptions about what customers want to hear about -- and how. This will provide insights regarding key improvements for 2015.

Also note that while some customers may bristle at the prospect of tailored communications --finding it to be an intrusion and an abuse of their customer information -- Voice of Customer research conducted by my firm for client MassMutual, indicates that the majority of customers want proactive and customized communications that are personalized according to their needs and life stage.

Multibillion-dollar telecom service provider CenturyLink's call centers were barraged with high call volume. Its own processes required customers to call multiple times to establish or modify service. To solve this problem, CenturyLink revamped its processes by developing Digital Dialogue to integrate more than 35 disparate systems from multiple communication channels, and it transformed the CenturyLink site into a more seamless self-service experience.

"We're trying to give customers better information," said Lindsey Pardun, IT principal architect at CenturyLink." If we can give customers information before they have to ask for it, they feel that we're … on top of things. And if we do need to talk to them, we can have a much more efficient conversation."

In the two months after the launch of Digital Dialogue, 187,000 calls were automatically routed to the proper agents.

3. Do you have an effective retention strategy?

According to some estimates, the cost of retaining an existing customer can be as much as five times the cost of acquiring a new one. But companies, curiously, often focus more on acquiring new customers than retaining existing ones.

A recent Retention Science study noted that only 23% of marketers track the rate at which customers churn; less than 40% track customer lifetime value; and, not surprisingly, 70% believe their retention marketing efforts are average, poor or need improvement. In dollars and cents, an Adobe study found that online retailers would double their revenue if they retained 10% of existing customers. Instead, 80% of marketers used digital marketing budgets to acquire new shoppers.

Groupon realized that its initial business model of daily deals and a bombardment of email with heavy discounts wasn't a sound strategy. To better retain customers and give them a reason to come back, the company rethought its relationship with business partners and consumers.

Groupon is now focusing on its online marketplace, reducing reliance on email, and improving relevance. It encourages subscribers to search for deals and explore its marketplace (a pull strategy) instead of relying on email (a push strategy).

The company is also creating Gnome, a tablet-based operating system for merchants , which empowers it to improve customer retention by better managing transactions, keeping track of customers to launch specific marketing campaigns, and simplifying the redemption process.

While the company is not out of the woods, its efforts are paying off. Groupon saw 23% growth in revenue to $751.6 million in the second quarter of 2014, with a 29% rise in global gross billings. The total active customer count rose by 25% year on year during the quarter, with North American customer count rising by 18%. The North American transactions percentage resulting from search was 24% in the third quarter, compared with 9% in the same quarter last year.

Takeaways for your company

The needs and expectations of customers are changing with astonishing velocity. Now is the time to consider the following to cultivate your customer relationships rather than assume you know what's working:

  • Investigate where missing opportunities are hiding, and develop new strategies and methods of presenting your company to new customers.
  • Understand whether your communication avenues are effective and make necessary changes to embrace customer needs and resolve pain points.
  • Strengthen your customer-acquisition plan. Don't rely on recruiting new business when it costs so much less to retain existing customers.

Use these final few weeks of the year to reflect on how much you don't know about customers' evolving needs and what you must change to maintain relevance and competitive differentiation. Use multiple methods to learn from the voice of your customer and then act on those insights. The wisdom of the customer is unfailingly correct.

Next Steps

Building lasting customer relationships involves good data

The 360-degree view of customers

You can't automate everything in marketing

This was last published in January 2015

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