Brand is what you do, not what you say.
You might not agree with these opinions, but hey, it’s a good idea to get out of the echo chamber once and awhile, don’t you think?
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Another eMetrics (Toronto) has passed and I have to say this: Web Analysts and Marketers proved once again they are up to the task of continuously improving the Productivity of their efforts!
At the same time, (and as I expressed during the sessions on the analytical culture), I fear that many in the web analyst community are becoming very “inwardly focused”. They tend to talk more among themselves about the pennies they are making / saving while tripping over the dollars that are right there to be had if they reached out to other analytical disciplines in the company or measurement community.
Many among us knew this was a danger from our BI experiences. If all you ever do is talk to each other about new shiny objects, your contribution to the business effort can suffer. BI struggles every day with this weight, the challenge of being labeled “really smart but irrelevant”. I don’t think we want this to happen to WA.
So with this backdrop, some of the conversations I heard at eMetrics Toronto about certain measurement practices were disturbing. For example, it seems very few people are measuring their customer contact efforts properly, and in time this lack of analytical rigor is going to damage the WA effort for all practitioners.
Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)
Q: Most CRM experts agree that discount is a terrible way to attract new customers. They seem to all agree that these “transaction buyers” are money-losing customers and have no loyalty.
A: I think using discounts profitably for customer acquisition depends a lot on your “Brand Personality” and your business model. That said, often people screw this up and attract the wrong kind of customer.
Q: But, I have seen a lot of different opinions on the use of discounts to increase loyalty and retention among current customers. I have seen experts contradicting themselves on this subject saying that discount is a terrible way to reward gold customers or to move up customers to a “better segment”and after some time they contradict themselves mentioning a successful discount case study (points are a common method used). Jim, what is your opinion about using discounts as a weapon in a retention program?
A: First, we have to define “discount”. Price discounts have the effect of reducing margins, but so do “better service” ideas like “VIP phone lines” and loyalty programs. So you can take your discount on the top line or the operational line, the fact is it costs money to provide good service to best customers in hopes of keeping them. I mean, what’s the $10 million you spent on a CRM system? Choose your poison, it costs money to retain customers.
Continue reading Use Discounts for Customer Retention? (Incremental Sales / Subsidy Costs)