Reach and Retain Customers Through Digital CommunicationOver the last several decades, businesses have watched the power to make buying decisions shift from manufacturers to end users (and away from purchasing agents).
Technology has sparked this change and has provided marketers with an opportunity for direct and relevant contact with customers. The challenge is to find the ideal mix of communication channels to keep customers satisfied.
In building and enhancing IBM's database, we conducted a study to improve our understanding of our customers and to better understand what a strong relationship would mean with an individual customer within various customer segments.
The goal was to support both tactical, sales-oriented direct marketing efforts and longer-term relationship marketing. It was too easy to assume that because of the Internet boom and IBM's position as a hi-tech marketer, we simply would shift more resources to the Internet.
Although the premise seemed logical, we wanted to validate this assumption on how best to reach and retain customers -- and how to financially allocate resources across the entire media mix to achieve this. Stated another way, we wanted to know which media investments would help build IBM's brand image and relationship to its customers.
To understand what the customer wanted to receive from IBM and through which communication channel, we carried out a quantitative study of our current customers. Customers were asked to comment on the types of information they would like to receive from IBM and through which communication channels they would like to receive it.
In the hi-tech arena, e-mail seemed to be the likely media type for the majority of customers. However, the study uncovered several surprises:
* Even though 80 percent of the group with computers had Internet access, 60 percent still preferred to be communicated with via direct mail.
* A strong 30 percent of customers preferred to receive information via e-mail. Not a single person wanted to receive information via a telephone call. This information helped us prepare for new directions and create an intelligent marketing mix based upon what the customers told us they wanted.
These findings resulted in three obvious, but very practical, benefits for IBM:
* To meet customer's current needs, we still need to maintain communication streams with the traditional direct mail media.
* Digital information is delivered faster and at a lower cost than traditional means. The time to develop any type of printed piece can take from several days to several weeks. With electronic development and delivery, the time is reduced to several hours, and costs are cut. Of course, reducing costs anywhere in the enterprise helps ultimately to keep product costs down.
* Electronic communication creates the pathway for truly interactive dialogue with the customer. That always sounds nice, but it can be challenging to implement. We found that aligning the customer-specific data with strong database technology would create the basis for interactive dialogue -- and perhaps even encourage it.
Many marketers are aware of the above advantages of interactive marketing. However, one advantage that many have not explored is the type of relationship that evolves from the creation of the dialogue. We have some early indications that "more dialogue" leads to "more loyalty." Those who can capitalize on this will be able to deliver on the promise of one-to-one marketing.
It is no leap of faith to state that if a brand meets the needs of the customer, it will be seen as good value. This is the essence of defining what a brand is and how a brand can engender loyalty among its customer base. Since a large part of what defines a "brand" is the messages and communications, it is important to understand how customers view this variable.
Now, when the research is used to understand what customers want and how they want it, it can be applied to the database and can be used to build relationships with customers. Customer input, at this level, results in the customer now having an ownership stake in the brand. This cycle of involvement builds trust in the brand that leads, over the long term, to brand loyalty.
Ultimately, this is the real reason for striving to understand how to use customer-driven communications channels.
<I>Jaime Goldfarb is program director in the IBM Personal Systems Group, Raleigh, NC. John Ozmun is a vice president at Targetbase Marketing, Dallas.