Sunday, May 18, 2014

Five things you can learn about customers just by asking

Offer free delivery: your investment will pay off
Insight for a health and beauty retailer revealed that a major barrier to conversion was a relatively high delivery charge on a low average order value.
By offering free delivery, they increased online revenue by 20% within eight weeks. They hadn’t considered offering free delivery until their customers provided the feedback.
In this case (as with most others), the cost of offering free delivery more than paid for itself due to the increase in conversion rate, orders and revenue.

Don't do Facebook 'for the sake of it'

Insight for a garden retailer found that their more 'mature' audience preferred email communication to social media.
By re-allocating budget and resource accordingly, they saw a 224% increase in revenue via email within three months.
The key lesson here. Social media isn't right for every audience. You don’t have a bottomless pit of money - spend it on the marketing activities that are most aligned to the behaviours of your customers.


Get to know the 'sale only' shopper

Insight for a fashion brand found that a high proportion of 'sale only' customers live in the US. Why? Because import duty meant US customers were waiting until sale time to order.
Understanding the behaviour of this smaller, seemingly less valuable segment, significantly changed how they engaged with them.
The client learnt not to discard the 'sale only' shopper. Instead, they developed specific strategies to target them.

You've got to dig deeper than transactional data

For a high end fashion brand, we found credit card purchases from a younger, female demographic were registered to males who had owned a home for more than 15 years. Eh? 
Only by overlaying transactional data with qualitative insight was the client able to understand why - they found that in many cases, the father’s credit card was being used by the daughter (knowingly, we assumed!) The end customer wasn’t who they appeared on the surface.
The lesson? You need to look beyond ACORN or MOSAIC profiling, it's not always a reliable indicator of who your ACTUAL customers are.

Are the incentives you're offering the right incentives?

Insight for another fashion brand revealed that customers would be incentivised to spend more with the offer of next day delivery, sale previews and unique offers rather than the heavy discounting they were pushing.
In fact, the latter was felt to devalue the brand.
Reworking their loyalty program resulted in a 24% increase in repeat sales over 12 months.
They key is not to make assumptions when it comes to incentives. At the top end of the market, price is rarely the decision trigger.
Other incentives, aligned to customer needs and values, are often more important so discover what really matters.

So, what can we conclude from these examples? 

A few things…
  • ACORN profiling has a role to play in segmenting your database (or prospective customers) according to a broad set of social factors, habits and behaviours. But it has its limitations.
  • Solicited feedback, in the form of a survey for example, can be designed in such a way as to dig a lot deeper when it comes to uncovering the needs, motivations and expectations of your customers, which in turn can be used to shape key strategic decisions.
  • Transactional analysis (using RFM modelling, for example) is essential to segmenting your database according to their spending habits. However, I have found overlaying transactional analysis with attitudinal insight hugely powerful to informing customer experience initiatives and digital marketing strategies on a segment by segment basis.
  • Don’t follow the crowd. Shape your strategy based on what your customers actually want, therefore taking the guesswork out of decision making. 
(VIA)

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