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Two to Tango

Marketers avoid missteps when they let customers take the lead.

by Avery Nash and Tom Knupp

Picture the tango. When skillfully performed, each partner brings a different flair to the dance through improvised steps and postures, even momentary pauses when it seems the right thing to do. Since it “takes two to tango,” the wise enterprise lets the customer lead, select the music, determine the moves and orchestrate the entire marketing dance: step-step—response!

So You Think You Can Dance

In commerce, more opportunities exist for interaction than ever before, and many of them are literally in the palm of your customer’s hand. Consumers aren’t limited to calling the service center—they can send an e-mail or text message, tweet, or go online to an e-commerce or self-service center. Or they might go to their blog and start “kicking your shins,” i.e., blasting your product or service. They may also interact with your company’s front office through kiosks, ATMs or point-of-sale machines or attend its conferences or webinars.

Are you following their lead? Do you even know what music is playing? Is your performance going to end with thunder­ous applause, or will this be your last tango?

Stop trying to manage your customers. Let the customer lead the relationship by knowing what they want, how they want it communicated and when the right time is to communicate it to them.

The Right Moves

The best marketers are able to detect an invitation to dance from any channel and act on it immediately and smartly. They can anticipate all possible steps from the customer and be ready to meet each of them with choreographed responses that take advantage of every opportunity and make prog­ress in a favorable direction. (See figure.)

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And they do so while main­taining a healthy respect for the consumers’ space. Swamping them with volumes of different offers via multiple channels steps on their toes and makes your company appear inept. Even worse, the customer could be tempted to cherry-pick the offer most expensive to you or search for a new dance partner altogether.

Fancy Footwork

To market more effectively, send an appro­priate number of invitations through the channels the customers prefer; follow their positive, negative or lack of responses; and react accordingly. To do this, you need to automate the entire decision tree related to the initiating event and continuously repeat the steps (from the beginning), picking up new individuals as they initiate contact, and responding to them as they progress through their chosen path at their own pace.

You must be able to detect every possible opportunity to interact with customers and be ready to engage with the right offer, based on their lead. Pay constant attention to name changes, address changes, large deposits or withdrawals, abandoned baskets, new customers, declining or increasing spending, etc. (See table.)

Click to enlarge

All of this requires some very fancy footwork with many real-time interaction possibilities; however, the benefits are worth the effort.

But there’s more. It’s crucial to prioritize your organization’s different initiatives and limit the number of exchanges with each customer across all channels. You want the campaign or initiative most important to your company to grab the consumer’s attention.

New Choreography

To implement continuous, automated, cross-channel dialogue with customers requires a significant paradigm shift. You must move away from the antiquated “spray and pray” methodology of sending a few campaigns to a massive, broad audience and hoping that they hit some of the right people at the right time with the right message. Instead, you need to deliver numerous variations of a single campaign to much smaller audiences or even individuals.

At the same time, operational compo­nents—such as campaign management and segmentation solutions, data warehouses, inbound call centers, real-time offer engines and e-mail servers—also need to be adapted to this new methodology. Component own­ers, therefore, have to develop, implement, and more frequently monitor and adjust best practices.

The tools used must be able to detect triggering events much more rapidly than ever before. Not only can customers do more research very quickly on their own, but they can also become engaged with a company (or a competitor) in real time through the Web, a call center, text messaging, Facebook or Twitter.

Accommodating this shift means the databases that customer relationship manage­ment tools access can no longer be stagnant for days, or even weeks, waiting for a regularly scheduled update. The databases or data warehouses have to be active, living, growing and constantly changing hubs of information. The operational components must either have synchronized data or preferably share the same data pool for making these rapid deci­sions and contacts.

With so much going on, you need to establish business rules around the prioritization of initiatives and contact optimization as well as a strong mechanism for enforcing those rules.

Light on Your Feet

Successful execution of your strategy requires the proper tools and the freshest, most com­prehensive data in an accessible, integrated environment that can:

• Continually take in new data and make it available to all components
• Support scoring customers for their propensity to respond to various offers and through various channels
• Handle running perhaps hundreds of decision-tree-based, continuous, multi-step offer-, channel- and contact-optimized campaigns

Additionally, the right marketing solu­tion must be robust enough to handle volumes of data and processing—a func­tionally rich system that will support all of the activities mentioned plus reporting and analysis. You can make adjustments and continuously improve return on investment (ROI) only when your users can analyze and critique each step of the marketing dance.

Marketers that have mastered this new dance often see significant improvements in their response rates and ROI. It’s not uncom­mon to increase the number of campaigns tenfold, improve response rates by four to eight times previous baselines, reach conver­sion rates and lead closures of 60% to 80%, or reduce churn by 30% using this approach.

Always remember that it takes two to tango. Being the marketing partner that follows the customer’s lead—through highly interactive, optimized and event-based interactions—is the only way to compete and win.

Avery Nash is a 20-year veteran and indepen­dent consultant in direct marketing solutions.

Tom Knupp is the technical publications man­ager for Teradata Applications.