Maximizing Customer Value: Strategies & Data Insights
Customer Relationship Management Strategies
Customer Satisfaction Programs
To satisfy customers better than the competition, we can establish three categories of programs:
- Service Programs to Customers: Through these, the company develops criteria and guarantees of excellence in all customer contacts and interactions.
- Fidelity Programs: A way to retain satisfied customers by working on incentives and rewards for repeat purchases.
- One-to-One Marketing Programs: Based on the personalized adaptation of products and business behaviors according to the specifications of each client.
Data Warehouse: Integrated Data Platform
This is an integrated data platform that provides support for administrative processes, information, and analysis. It is carried out through business management software tools and applications to support decision-making.
Benefits of a Data Warehouse
- Transform data into actionable information through the operations of the company involved.
- Centralize information management to improve quality.
- Standardize business information.
Customer Differentiation Criteria
The criteria for customer differentiation include the following:
- Differentiation by Current Profitability: Takes into account the monetary value a customer currently brings to the company.
- Differentiation by Expected Future Profitability: Based on calculating the net present value of all future benefits that the client will provide to a company.
- Differentiation of New Customers: This analysis seeks to identify new market segments based on knowledge of current customers.
The RFMT Rule for Valuing Customers
The most valuable customers are identified by:
- Recency: Those who have purchased recently.
- Frequency: Those who purchase multiple times a year.
- Monetary: Those who make high-value purchases.
- Type: Those who purchase certain products.
Direct Mail Marketing (The Mailing)
Direct mail is a commercial media strategy. It is a way to reach potential customers by mail, typically with a letter and a brochure.
Customer Lifetime Value (CLV)
The formula for Customer Lifetime Value is: T [J (PC) – K MC]
Strategies to Increase Customer Profitability
Increasing customer profitability is a goal that can be achieved through:
- Cross-selling: Increase the quantity of goods purchased by the customer through the sale of complementary products.
- Upselling (Sale Elevation): Raise the average transaction value by encouraging customers to purchase more expensive products or higher-tier services.
- Reduced Costs: Optimize both communication costs and the costs of the products themselves.
- Increase Purchase Frequency (Seasons): Extend or increase the periods of customer purchase activity.
Customer Categories by Value Function
The differentiation of customers by value function determines the following categories:
- High-Performance Customers: The strategy is to retain them at all costs through specific relationship programs, continually increasing service quality.
- High-Potential Customers: The goal is to develop their value by utilizing precise direct communication tools to enhance cross-selling and upselling activities.
- Below-Freezing Customers: These clients do not provide sufficient profitability, and their presence in the database unnecessarily increases costs.
Direct Marketing: Immediate Response & Relationship Building
Direct marketing is a business communication system that uses advertising to specific customers, requesting an immediate response via a coupon, an order form, etc. The goal is to gain the confidence and loyalty of customers who respond to the marketing action. The aim is to identify the customer or facilitate a direct purchase. From that moment, the customer data, duly entered into the organization’s database, informs the design of future relationship-building actions, adapting different offers specifically for them.