Last Friday Deb Rapacz contributed another Relationship Marketing Power Question: Are You Wasting Relationship Moments. As with previous posts in this series I will respond with some quick tips on how to use the ideas in Deb’s post in your business.
The Relationship Marketing Matrix pictured above was developed ten years ago when I worked as a consultant. It was useful then and I suspect, with the proliferation of media channels we’ve experienced in the last ten years, even more so now.
It’s built around one broad concept, that customers are important, and two specific ideas: that all customers aren’t of equal worth and their relationship with the brand goes through periods of high and low involvement. Accepting this means you have criteria against which to make marketing investment and messaging decisions. You will have a plan to take advantage of Relationship Marketing Moments as they occur.
Consider the Matrix shown here, along the x axis are the four Interest Phases, on the y axis are the five Value Quintiles. Since value is a reflection of category involvement a simple product message is appropriate for low-value prospects and customers, they don’t need or frankly want much more, but high-value customers are heavy users and very knowledgeable, for them a more detailed presentation of brand benefits and unique differentiators is important. So, a low-value customer just beginning their Prospecting deserves less investment than a high-value customer who is actively Considering their purchase decision.
Lets consider a simple example. General awareness advertising is an efficient way to get a simple message across to many people. This provides all the support required for the bottom three value quintiles. More targeted advertising, online Banners (Prospecting) and Search (Consideration), combined with the appropriate message on a landing page, will efficiently deliver a richer more meaningful experience to customers in the top two value quintiles. Post purchase, Customer Relationship Marketing can work hard to establish a Connection and Loyalty among Best Customers.
Using the Relationship Marketing Matrix to organize your communication strategy will allow you to maximize the mutual value of relationship moments.
- Determine customer value and sort prospects and customers into value quintiles. You may know, especially for customers, or you may have to guess, but it’s important that budget not be wasted on low-value prospects and customers. It’s not worth it to you nor to them. They will tell you through their actions how involved they are in the category, which tells you how much they are worth. Be prepared when they do.
- Invest your budget against and target your message to high-value prospects and customers. Design messaging that’s appropriate for the communication channel and for where the target audience is in the interest phases. For example, don’t have your landing / home page repeat your mass market advertising message. They know that already. Use this relationship moment to reinforce brand benefits and differentiators.
- Focus CRM efforts on building Connection and Loyalty among high-value customers. Because they are very involved in the category, they are both interested in what you have to offer, and worth the effort. Best Customers offer five sources of revenue and profitability: keeping them longer improves the ROI on acquisition costs; they are more likely to buy other products and services from you; they understand your value proposition so they’re more likely to pay full price; they understand your product so they cost less to service; and finally, they are much more likely to be advocates.