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Presented By: David Azulay – The Kern Organization Judy Mitchell – The Kern Organization

Dan Ferguson – DIRECTV Karlene Swalley – Clearwire

Integrated Strategies for Customer Loyalty and

Value Optimization

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“This may seem simple, but you need to give customers what they want, not what you think they want. And, if you do this, people will keep coming back.”

- John Illhan, Entrepreneur and Founder of Crazy John's (Mobile phone retailer)

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According to research done by Bain & Company:

No company is immune to the pressures of the market.

But companies that focus on building loyal relationships… are better positioned to remain strong.

Consider the cost of serving a long-standing customer versus the cost of courting a new one…

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5% increase in customer retention produces more than a 25% increase in profit

Why?

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Customers often pay a premium to continue to do business, rather than switch to a competitor with whom

they are unfamiliar and uncomfortable

Return customers tend to buy more from a company over time, and as they do, the cost to serve them declines

Introductions

The Importance of a Customer Communications Strategy

Getting Started –10 Key Steps

Cases –DIRECTV & Clearwire

Moderated Panel Discussion

Q&A

Today’s Agenda

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Introducing Our Panelists

David Azulay Senior Vice President,

Client Services, The Kern Organization

Dan Ferguson Senior Director of

Marketing, DIRECTV

Judy Mitchell Vice President, Client Services,

The Kern Organization

Karlene Swalley Senior Customer Base Marketing

Manager, Clearwire

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The Importance of a Customer Communications Strategy

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Just as important to have retention strategy in place as acquisition strategy

It costs more to acquire a new customer than it does to keep one

Most customers want to be appreciated and thanked along the way for their business

Expectations are increasing. Customers expect their experience to be consistent, relevant and personalized at every touch point

Getting Started – 10 Key Steps 1. Know your objectives

2. Define methods of measurement and success metrics

3. Conduct a communications audit

4. Listen to your customers

5. Determine customer lifecycle phases

6. Define targets and messaging

7. Plot the journey

8. Set Test and Implementation Plans

9. Create a brand 10. Go to market and refine again

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Step 1: Know Your Objectives Primary –Should be quantifiable • Example: Increase revenues by 10%; Increase renewals or mitigate churn by xx% Secondary –Should be extensions of meeting primary goals • Example: Satisfied customers and advocates, which lead to increased purchases and increased revenues; increase customer opt in; generate buzz

Are these realistic? • Align costs and ROI to meeting your goals

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Step 2: Define Methods of Measurement and Success Metrics • Improved customer satisfaction scores • Positive testimonials • Lower churn rates • Increased revenue or purchases • New customer referrals • Higher online registrants • Other qualitative and quantitative measures?

– Always good to look at more than one 11

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Step 3: Conduct a Communications Audit

• Dedicate resources – commit 2-4 months

• Review all existing metrics

• Analyze impact of current touches on costs and revenues

• Perform competitive analysis

• Evaluate current offer library

• Build a map of existing communications to identify gaps/holes/opportunities to better address customer needs

• Result should enable specific plans by segment, customer type, etc.

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Step 3: Communications Audit Evaluate contact strategy variations based on customer segment

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What actions do you want prospective customers to take as they move through their relationship with you?

What channels are they likely to prefer?

What will define success for each type of dialogue?

Questions to ask yourself:

Be sure to make improvements based on findings

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Step 3: Communications Audit Evaluate All Touch Points

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Step 4: Listen to Your Customers • Use immediate feedback channels

– Surveys, one on one interviews, focus groups

• Build longer term feedback channels – Customer panels to contact regularly for feedback

• Be prepared to act on the information you hear – Customers appreciate being asked for their feedback but expectations are that their opinion will be taken into account

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Risk Treat-ment

Step 4: Listen to Your Customers

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Step 4: Listen to Your Customers SURVEY FOLLOW UP TREATMENT

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Benefit EM 1

Reas

on 4

643210

Reas

on 1

Reas

on 2

Reas

on 3

Prod

ucts

Fina

ncia

lSe

rvice

re

late

dOt

her

Benefit EM 2

Benefit EM 3

Weekly

Landing Page

Offer EM

107 5

No openNo click

thruA

OBTM Offer

Reminder EM

“Call us -- we can help” & IBTM # EM

B

Reminder EM

A

B

No openNo click

thru

ValueEM 1

ValueEM 2

ValueEM 3

Test to determine effectiveness of

benefit communications

Roll into Loyalty if good response

Thank You, Tell us how we can

help EM

Thank You EM

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Step 5: Determine Customer Lifecycle Phases

Activation

On-boarding

Engagement

Adoption

Growth

Nurture Retention

Renewal

Loyalty

Churn Litigation

Winback

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Communications framework, data, investment &

measurement strategies need to be specific by phase

Step 5: Determine Customer Lifecycle Phases

Create specific strategies for each stage

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Investment Strategy Step 5: Customer Lifecycle Phases

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Based on your likelihood for good lifetime value and churn litigation, you can determine how much money to put into a campaign

Step 6: Define Targets and Messaging

• Know your strategy – Education, cross-sell, etc.

• Determine available data – Revenue, tenure, products purchased, etc

• Consider attributes for segmentation – Profile or model against most profitable customers to

identify opportunities within your base

• Personalize where possible – Targeted, personalized, relevant messages ensure

customer engagement for lifetime loyalty

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Step 6: Messaging Hierarchy Customer Segment

Benefits message

Product Features and Benefits

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Step 7: Plot the Journey

• Define key stages to reach customers – Before contract expiration – After 3 months of no purchase activity – On purchase or activation anniversary date

• Determine which targets are highest value to your organization to set frequency accordingly

• Test different formats and channels to get the most bang for your buck

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Step 8: Set Test and Implementation Plan

• Evaluate audiences that are most critical to impacting goals – Identify groups of customers that will move the needle on

your business most if more engaged – Identify best media mix to reach your audience

• Set revenue goals to make sure costs are offset and positive ROI is achieved

• Schedule implementation with enough time to read results accurately and rollout next steps

• An implementation plan will help ensure that no steps are overlooked and that each team member is clear on their role

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• Consider a “voice” for your communications so that all touches are consistent

• Make sure look and feel of touches are clearly from the same family of communications

– Informational, promotional, whatever the objective

• Carry the branding throughout the customer’s lifecycle even if touches are internally managed

in different groups – All touches should clearly be coming from one company

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Step 9: Create a Brand

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Step 9: Create Brand Incentives for Customers

Step 10: Go to Market and Refine

Build the communications map

Define the target to test against control

Measure results against objectives

Refine strategies to test again

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Case Studies

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Case Study: DIRECTV Building a New Customer On-Boarding Strategy

• The Business Problem – In 2008, DIRECTV found that the number of new customers that were

churning off the platform within their first 90 days was on the rise and communication weren’t consistent across the various internal groups

• The Solution – Launched project to create an on-boarding strategy – Executed the 10 key steps above beginning with setting

quantifiable objectives to: • Reduce churn and improve engagement • Increase customer satisfaction numbers • Improve installation experience

– Created an integrated multi-channel plan to reach customers via installers, email, direct mail, and phone during their first 30 days of service

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• The Results • In 2011, conducted a review and found an increase in all key metrics

including reduced churn and improved customer satisfaction

• Next Steps • Now building the 2.0 version to evolve to a hyper-customized

approach based on psychographic and lifestyle information to increase relevance – Asking key questions at registration to target messages – Respecting how customers want to be contacted – Creating a community online through a Welcome Center – Integrating the website into the experience rather than just sending

customers there

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Case Study: DIRECTV Building a New Customer

On-Boarding Strategy

Case Study: Clearwire Developing a Customer

Communications Program • Started with zero customers and had to develop

a plan • Closely aligned to 10 step process to develop a

CRM program • Set priorities and timeline • Internal mapping

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StrategyMaster™ Planning Process • Designed to help marketers make significant improvements to their

communication programs

• Will establish a visual strategic mapping framework to help manage tactical implementations of marketing activities aligned around specific strategies that have been determined to achieve the given goal(s)

• The first three steps within our strategic process include:

– Strategic planning – Visual mapping – Road mapping and prioritization of implementation plans

• The structure ensures the plan is rooted in activities that are focused on achieving the goals and objectives established

• Designed to ensure that the plan is adhered to, while being flexible to adapt to changing market conditions and shifts in strategic priorities

• Participation by key stakeholders and support teams is a critical component to the success of the planning process

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Need for Multi Channel Approach

• Only 20% of customers open one or more emails with weekly contact strategy

• Although DM 5X cost of EM – the CPS were the same opening up available universe and increasing the total number of reactivations DM had X times higher response rate DM had X times higher take rate

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Thank You Q&A

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