FOUR IDEAS FOR ONE-TO-ONE

Unsure of exactly how to structure and build a B-to-B one-to-one customer relationship program? Here are four ideas to get you started.

Treat Customers Like Prospects

Business-to-business marketers spend a lot of time, money and effort in the acquisition of new customers, yet too many times, these marketers underinvest in customer retention. That is wrong – because building a long-lasting customer relationship starts after the sale.

Numerous industry studies show that the cost associated with customer retention is far less than the cost of customer acquisition – sometimes the cost of keeping a customer is as little as 20% to 25% of the cost associated with acquiring a new customer. This could mean that, for every dollar you spend acquiring a new customer, it will cost you just 25 cents to retain that customer.

This law of customer acquisition and renewal or retention is well known to fundraisers, subscription publications and mail order companies. When they evaluate their marketing efforts, they often find that they actually acquire new donors, subscribers or customers at a loss, but renew them at a profit. It may therefore take a year or more to make money on a customer.

This is the principle behind LTV – lifetime value of a customer. A customer’s LTV becomes an important measurement criteria when you evaluate customer acquisition and retention. Look at the average number of years you retain a customer. Then look at the average value of that customer over that period of time. You will get a good sense of what that customer is worth.

If possible, apply this analysis to each individual customer and use it to rank your customers; in effect, you build your own statistically accurate version of the customer marketing pyramid. Then you can compare this data with the amount of money you invest in customer acquisition and retention. If you find, as many companies do, that you are investing far less in retention than in acquisition, consider the ROI impact of even a modest shift in the ratio. By investing in customer marketing programs – and improving your use of the Internet as a customer marketing and communications tool – you could get a substantial payback.

Attitude is just as important as the money you invest. That is why you should start treating customers like prospects. When you treat customers like prospects, you never assume they are comfortably yours forever. You recognize that they can always choose to go elsewhere and that you need to do everything you can to make sure they do not. Create opportunities to reward their loyalty, delight them with superior service and ensure that their interactions with you are positive, satisfying and rewarding.

Think of new ways to keep the flame burning in that relationship. Use direct mail and telemarketing in combination with e-mail and a customer-only portion of your Web site to inform customers first about new products or services, make special offers, invite them to special events and encourage feedback.

The Internet can help you put a large emphasis on customer service and support and build real value into the customer relationship. Just as important, by servicing existing customers over the Internet and making it known on your Web site, you demonstrate to prospects the value you place on customer support.

Ask Customers What They Want – And Give It to Them

Companies that are responsive to their customers are companies that listen to their customers. They provide easy ways for customers to offer feedback – via phone, fax, mail or online. They encourage their customers to interact, they take recommendations seriously, and they act on them.

IBM’s “Focusing on You” program, for example, was built on asking customers what they want – and giving it to them. One of the company’s key findings was that customers wanted to “direct the dialogue based on their own needs.” IBM took the responsibility to reduce the amount of information directed to the customer – giving him or her the choice of what to receive.

Because customers directed the relationship and were involved in a meaningful dialogue, IBM benefited from an important side effect: customers also updated their own records – meaning the data was more likely to be accurate.

Explore New and Innovative Ways to Encourage and Reward Customer Loyalty

You don’t necessarily have to establish an elaborate frequent-buyer program to encourage and reward customer loyalty. Sometimes, simply making customers feel special can be enough.

One simple way to do that is to keep in touch with your customers via e-mail. Another tangible way – that also provides added value – is to establish a customer service center on your Web site.

A Web-based customer service center can go beyond offering service and support to users of your products in a number of ways. For example, you might post white papers, special reports, benchmark studies and links to useful Web sites only in the customer section of the site. You may also wish to build in a self-service area where customers can use solution databases to solve their own problems, or perhaps you will consider using Internet telephony to enhance communications with customers.

You could also offer customers the option of signing up for e-mail newsletters, or the option of receiving Web pages from you, delivered to their computers on a regular basis. You could use your Web-based customer service center as a “rewards center” by offering incentives for purchasing certain products or doing business online. You could build a B-to-B portal that serves your company’s business area or industry, and then give customers special privileges in using it. Whether you take small or large steps with Internet customer marketing, you are proving that you value the relationship you have with your customers.

Recognize the Differences Between Classes of Customers – and Treat Different Customers Differently

If you utilize database marketing effectively, you can use the information you gather about your customers to segment and rank them, and then build individualized programs based on classes of customers. For example, you may wish to treat customers at the top of the pyramid very differently from other customers. You may want to develop a special relationship with these highly valued customers, communicating with them more frequently via e-mail, enrolling them in preferred customer clubs, and making them special offers on a regular basis. You may also wish to develop a special program for resellers or partners. They are a different audience, and should be treated differently.