What could be a better way to end the month and prepare for the next, than with a new buzzphrase? Customer Value Management (CVM), the industry’s new buzzphrase and a current trend in the market, represents a focus on optimising the value of the customer.
Alternatively, or perhaps better, described as Customer Value Maximisation, CVM can be described as the ‘upgraded’ version of loyalty, taking the traditional notion of loyalty one step further. Rather than simply rewarding its faithful customers, CVM focuses on how to maximise the value of every customer, at their every interaction with the company – and covers the entire end to end customer journey.
Why end the relationship prematurely?
It would seem banal to not (attempt to) gather data from your customers, in order to increase your knowledge of your customer-base and the market in which you operate. In the same way, it is increasingly unusual to treat the purchase of a product or service as the end of the interaction with a customer.
To end this connection so abruptly would be to cut a potentially life long relationship very short; a huge faux pas. Rather, this should be seen as the beginning of the relationship. That first transaction may have come to an end but, if given the opportunity, it could be the first of many.
How to maximise customer value
Mobile plays a key part in helping businesses to maximise the value from their customers. Using SMS engagement technologies businesses can track and re-target customers sending personalised, relevant offers and products based on buying history. To use the example that Nick Fletcher, Director of Service Strategy at Rakuten Marketing Europe, gave: “If a shopper bought flights as a… present, a retailer could follow up with hotel offers for that destination.”
A simple yet effective technique, targeting and communicating with customers in this way will not only benefit the business financially in the short-term, but will improve both the customer’s perception of said business, and therefore its reputation, as well as its relationship with the customer. This will bring invaluable reward to the business in the long term.
Case study: Homebase
The immediate rewards of SMS communications can be seen through our work with Homebase:
Late last year Homebase embarked on its first SMS broadcast campaign to support its DM activity with promotional offers redeemable in store, or online. In short, the results saw an uplift of 20% in incremental sales from SMS alone and 26.5% incremental sales driven by customers who received both email & SMS. Email supported by SMS was the best performing communication channel in terms of ROI. A clear success, Homebase will be trialling this channel further to help drive footfall and incremental sales.
This is only the tip of the iceberg; SMS can be easily adoptable for any sector. Whilst the gambling sector is currently the most focussed on CVM, businesses in every sector would do well to re-work their priority list for 2015 to include this. Adopt a long term mind-set and your efforts will pay off as you find yourself with a growing, increasingly loyal and increasingly profitable, client base.
Senior Marketing Manager,