Engage your audience to create deeper relationships

How can I increase my sales and revenue? The answer is simple: long term customer relationship. With long term customer relationship you will increase your profits and finally you will be able to buy that one super fast car you ever wanted or enjoy that super-holiday in that paradise place. Moreover online businesses seek with long-term customer relationship two main objectives: gain visitors and increase sales.

First of all I want you to realize the key aspects of maintaining a healthy relationship with your costumers. According to Reichel & Schefter (2000) acquiring a new online customer is 20% to 30% more difficult than a physical store. This is one of the reasons many online start-ups start remain unprofitable for two to three years. Also research shows that a 5% increase of customer retention can boost your profits between 25% and 95%. 

                  The area of marketing that deals with customer relations is called “customer relationship management” (CRM). CRM seeks to develop relationships with particular customer segment or groups. A good example is Amazon which divides its customer by their purchases. Amazon using its database of purchases will send promotions and advertising of similar goods to its customer using e-mail marketing. The key for long term relationship is to deliver relevant messages to the customers. The quality of the message will be related by how much the business understands the customer’s needs, wants and desires.

Online businesses have the advantage to use the interactive nature of the web to develop customer relationships. This online approach is called e-CRM (electronic customer relationship management). E-CRM deals with “customer engagement” and “customer lifecycle management” two key terminologies that must be understood for a successful customer relationship.

The idea of customer engagement was underpinned by Forrester (2007). Engagement in an online context refers to the long term ability of a brand to gain customers attention and to constantly keep communications with the client. A very famous consultant of sCape (www.cscape.com) called Richard Sedley defined customer engagement as “Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand”.

So guys a good online business must have these following characteristics to be customer engaged:

Involvement: It is measured by website visits, time spent and pages viewed.

Interaction: Can be measured by comment on your blogs, quantity/frequency of written reviews and                                                     .           online comments.

Intimacy: Measured by tracking on third-party sites such as blogs and reviews (linking).

Influence: Measured by brand affinity, content forward to friends and recommendations.

Brian Have (Forrester analyst) underpins the importance of customer engagement:

“Using engagement, you get a more holistic appreciation of your customer’s actions, recognising that value comes not just from transactions but also from actions people take to influence others. Once engagement takes hold of marketing, marketing messages will become conversations, and dollars will shift from media buying to customer understanding”.

           Finally the second section of this post is about customer lifecycle management as a key term of E-CRM and long-term customer relationship. As you see in graph B. customer life cycle is divided in five stages, (1) customer selection, (2) customer acquisition, (3) customer development, (4) customer retention and (5) customer extension. An online business must understand in what stage its customers are so to tailor its marketing strategy more effectively.

Pepper and Rogers (1997) states the following stages to achieve that goal:

                Identification: Understand and learn the characteristics of customers and consumers habits with the objective to have a better communication.

                Individualisation: Tailoring the company’s brand to each customer, offering a benefit to the customer based on the identification of customer needs. Offering value to the customer based on their customer needs.

                Interaction: Continued dialogue is necessary to understand both the customer’s needs and the customer’s strategic value. Use your database to store and record customers information in order to facilitate the learning relationship.

                Integration: Integration of the relationship and knowledge of the customer must extend throughout all parts of the company. The whole business must be costumer focused.

                Integrity: Honesty. Avoid promising something that you can not deliver. For a strong relationship you have to cultivate the trust of your costumers. It is very easy to lose a costumer and very hard to retain it.

Moreover Permission Marketing is about seeking customer’s permission before engaging with them into a relationship and providing something in return. Nowadays a normal person is bombarded with 3,000 ads per day on average. The effect is that households are losing patience and now they are expect something in return for their precious time. This evolution from “interruption marketing” to permission marketing has enabled the consumer to choose which ads he/she wants to get involved (Opt-in). And opt-in example would be that a costumer agrees on receiving email about promotions and discounts. Furthermore part of permission marketing is to give the possibility for the consumer to Opt-out which is the situation where consumer agrees not to receive further information.

Permission Marketing sees the relation with customers as a marriage. It is all about incentives. According to Godin (1999) “dating” a customer involves:

Offering the prospect an incentive to volunteer

Using the attention offered by the customer to teach them about your products and services

Reinforcing the incentive to guarantee the customer’s permission.

Offering additional incentives to guarantee even more permission.

Using their permission to eventually change consumer behaviour towards profits.

So guys as you have seen the cornerstone for a successful online business is a long term relationship with your clients. We can summarize the main components of e-CRM as a costumer centred ideology. Fully understanding your costumer’s needs, wants and desires ergo delivering a successful message will enable customer loyalty and retention. Your business must have consumer engagement, personalisation, Peppers and Rogers five I’s and use “permission theory”.

As you have seen my post is focused on marketing strategies (e-CRM) to enhance customer relationship. I ask you guys, what other angle can you take in order to answer the question? Maybe SEO (search engine optimisation)?

See you next week!