I recently talked about the CEO who’d confided that they didn’t want to understand their customer churn risk (the point where customers who previously spent £ with you become £0 value), or real frequency, because knowing the scale of the problem meant he would have to do something about it – and that would be a “distraction” to the day to day which was already filled with countless short-term schemes designed to drive sales.
When people are saddled with debt, the National Debtline might advise to stop avoiding the pile of scary brown unopened envelopes and answer the money-chasing calls, because only by acknowledging the reality of the situation can you make a plan to move forward.
When someone wants to lose a lot of weight, it might be considered good advice to step on some scales, or keep a diary of food consumed and exercise taken, to understand where you are. Because only then can you or an expert find the most appropriate route to your goal.
I DON’T NEED NO GOOD ADVICE
In neither case, would the advice be, ‘just keep ignoring that pal, it will go away’ – and neither would i advise that you can keep short-term trading out of a serious frequency or customer churn problem.
So why should you care? After all, your house or health isn’t at risk.
Well, because as the market corrects over these coming months, and we see even more cash strapped Brits tightening their belts and reducing their repertoires, your ability to rely on your core customer base will be vital. And if you’re losing 3x more customers to churn than you are acquiring new ones or your frequency is once and never again (both of which we see much more often than you would imagine), you have a high-cost acquisition time bomb just waiting to go off.
But, by getting clarity on the depth of your ‘problem’, you also get clarity on the size of your OPPORTUNITY, because it is possible to turn churn into retention, and meaningfully increase frequency when approached correctly.
ME, ME, ME
And here we find our second problem, because what hospitality thinks of as marketing now, is frequently extremely wide of the mark.
For such a customer focused sector, in our bid to share our brand news (buy our new menu! Read this witty email! Use this offer asap cos we’re trying to drive sales!) we’ve become completely oblivious to what the customer actually wants. And we’re not a million miles away from the Blockbuster Videos and Blackberries of the world in becoming alarmingly close to irrelevance to our audience.
You may well be shaking your head, thinking, ah Vic, but people will always have to eat and drink won’t they! And you’re right, they will – but not necessarily with YOU.
SO WHAT’S THE PLAN, STAN?
So to make more customers your customers, you need to move from a digital monologue to digital dialogue.
What do i mean by that?
Imagine I bump into you at a party. With little more than a hello I launch into a monologue, the subject being ME – my job, my car, my pets, my friends etc
You’d probably wait for me to top up your glass then edge away at the first opportunity.
But imagine I said hello, then maybe asked how you’d travelled to the party, agreeing that the train was a nightmare. And that I wish I’d driven too even though this wine is really good, and how mad, we drive the same car…
We’d get on far better and there’d be far less chance of you considering a restraining order. We might even go on to be friends.
I may have dialled things up for dramatic effect but the principle is still the same. Brands are most often in broadcast mode and rarely in listen mode. And with so much to SAY (offers! menu! garden! sunshine! winter! valentine’s! Xmas! etc etc) marketing output tends to be a one way street.
And this is a huge problem, because if your marketing is in broadcast mode, you cannot be alert to the nuance of response, and notice that your customers are also slowly edging away.
PUTTING THE ‘CUSTOMER’ INTO C.R.M
So let’s put the Customer back into C.R.M and turn customer churn and low frequency into the high-margin retention and growth opportunity it is.
1. Use your data (including booking, loyalty and basket) to get to know your most valuable and most opportunity rich customers in intimate detail – their behaviours, likes, preferences and motivations.
You are going to need razor sharp clarity on the value, opportunity and risk in your customer behaviour to plan your way to success. Think of your database as being a P&L in itself, with any gains being undermined by the customers who, while staying on your database to give the vanity metrics a boost, have sadly become absolutely worthless to you.
And don’t forget your frequency, because even just one more visit from a fraction of your customer base can be business changing in itself.
This is your segmentation, this is the action you want someone to take.
A GOLDMINE OF DATA
2. Take your messaging and be more intentional about who should get what. Personalisation will be as complex as the data you hold, so as a general rule of thumb, anything which goes to your whole base is a BRAND message, so needs to be something you are happy for your brand to be universally known for. For eg, value may be an admirable brand pillar, kids eat free is usually a means to an end and not.
Anything other than brand is MARKETING and marketing should always be carefully targeted.
3. Build out an omnichannel communication plan which delivers the right message to the right people at the right time (your whack this out to the whole database days will have to be behind you) – and closely monitor and respond to the results.
Intentional, relevant and timely comms massively outperform the much-loved ‘spray and pray’ approach – there’s business changing riches just waiting to be tapped.
While you may be doing some data-led stuff already, most brands are scraping the surface of the opportunity sitting within an absolute goldmine of customer data. It’s time to stop killing its value with short-term thinking and recognise it, and treat it as, the incredible business asset it is. Your customers will both recognise and reward you for it.
This article first appeared in Propel
