Marketing IS (Can Be?) an Experience
Early on I discovered something from the work of leaders in data-based marketing business models: they were always very concerned with post-campaign execution – not only from marketing, but also through product, distribution, and service. I thought this strange, until I realized they knew something I did not: when you have customer data, you can actually identify and fix negative customer value impacts caused by poor experience.
This means you can directly quantify the value of customer experience, budget for fixing it, and create a financial model that proves out the bottom line hard money profits (or losses) from paying attention to the business value as a result of customer experience.
And critically, this idea becomes much more important as you move from surface success metrics like conversion and sales down into deep success metrics like company profits. Frequently you see the profit / loss from “marketing” often has less to do with campaigns and more to do with the positive or negative experiences caused by campaigns.
You might think taking the time to provide special treatment to brand new customers would always encourage engagement and repeat purchase. You’d be wrong. Sometimes this works, sometimes this does not work, depending on the context of the customer. Does it surprise you to find out customers often do not want to be “delighted”?
Continue reading Measuring the $$ Value of Customer Experience
The following is from the December 2008 Drilling Down Newsletter.
Got a question about Customer Measurement, Management, Valuation, Retention, Loyalty, Defection? Go ahead and send it to me here. If on the topic below, please leave a comment.
A Budget for Discounts?
Q: For the first time ever, we have a Discount budget built into our financial plan. We’ve been told this number in the budget is less than we used last year, but our Sales target is a bit higher. We’re supposed to hit our sales targets while at the same time not going over budget with our Discounts to generate those sales. This directive comes from Finance.
A: You have just been offered the opportunity to graduate from Advertising to Marketing!
Q: We are fairly sure if we reduce the discounts we give, response is going to fall and so are sales, especially from best customers. Or we could keep the same discounts but do fewer discount promotions, with probably the same effect on sales. Are there any other alternatives, any ideas on how to manage this discount budget issue?
We’re an online only retailer.
A: Sure, ask an easy one over the holidays!
Seriously, I hope you did not take my comment about graduating from Advertising to Marketing the wrong way. This is really an opportunity for you to shine in so many ways, and to learn a lot of new ideas in the process – if you want to take advantage of it.
Continue reading A Budget for Discounts?