Don't just look through the keyhole, open the door

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One good New Years' resolution for every marketer is to revisit your understanding of your prospects and customers. The challenging economic climate, which will likely last well into the year, is slowing consumer purchase intensity. Acquisition cost increases are forcing marketers to rethink or reposition their multichannel communication strategies, and communication in its many forms will be the key to success in the next 12 months.

It's easy to say, “I already know what my customers are responding to and buying,” and some will even announce, “I already track my customers' lifetime value,” which is the Holy Grail of metrics. They are right. Most companies do a remarkable job capturing, tracking, and even leveraging their own data about their customers.

But isn't that like looking through the keyhole of a door? Of course, it is critical to understand how your customers perform when you communicate to them, but they are receiving product marketing messages from many other outlets via many channels. Open the door wide and learn how your customer is interacting with the marketplace. You'll get some very interesting insight that will improve the way you communicate to them.

The process is simple and elegant. First, identify segments of your customer database that have the potential to be more productive. Even high-level segmentations can shine a new light on your customers. Look at “high-value” vs. “low-value” customers. Knowing what else your high-value customers are buying will certainly open new sales, but identifying pockets of potential within your underperformers might present an even larger opportunity. Segment “actives” vs. “cancels.” Has something changed since you last did business with a former customer that will spark a renewed buying interest on their part? And, segment between “direct mail,” “e-commerce” and “retail.” You may have acquired the customer via one channel, but chances are they are interacting with other marketers in multiple channels and may have a strong communication preference that you don't know about.

Smart marketers should also match the customer segments to a third-party data set that is rich in actual — not inferred or modeled — consumer transactional behavior. This data is the key to rounding out the view of how your customers are performing in the marketplace. The dataset should also contain standard demographics for descriptive purposes.

Take it a step further, from the descriptive to the predictive. Work with your third-party partner to score your customer universes with predictive models to identify pockets of opportunity. Examples of models that can be powerful include net response models to identify cross sell and up sell opportunities, likelihood to pay models to help manage the inherent risk of bill me offers, billing models to optimize invoicing/billing/collection strategies and attrition models to better manage lifetime value and renewal communications.

The insight you will gain from this open-door profile analysis of your customers will bear fruit right away by giving your marketing strategies a jump start in 2009.

Go ahead. Open the door to your customers. And stop looking through that keyhole.

Bart Surrick is the VP of strategic services at Alliant. Reach him at

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