Defy Customer Defection: 3 Steps to More Relevant Customer Communication

By Connie Hill, Founder and President, VeraCentra

Lack of relevancy advances customer defection. A recent study revealed that 63% of consumers have abandoned, or are considering abandoning a brand altogether because of irrelevant emails and junk mail. Failure to master relevancy can have a devastating effect on a retailer’s ability to acquire, serve and retain customers.

Executed well, relevancy can prevent customer defection, improve customer satisfaction and increase customer spending while reducing marketing cost. Retail marketers must understand the relationship between relevancy and customer defection and offer prescriptive recommendations for defying defection.

What is Relevancy?
Relevancy in marketing communications is commonly referred to as creating personalization or customization for potential customers. But relevancy also includes presenting customers with unique offerings, identifying channel preference and coordinating precision timing for marketing communications. In a nutshell, for both strategic and tactical application, Adam Sarner, CRM analyst at Gartner Group defines relevancy as: “basic demonstration of customer memory.”


What Does It Mean for Customer Defection?
Customers are simply worn out by the tidal wave of meaningless non-targeted communications. Pricing and promotions based on inventory availability simply do not satisfy a customer already overextended with demands of family and work. In addition, customers are frustrated with retail’s inability to market effectively across channels. When merchandise is available only through a specific channel, but is promoted across all channels, the customer can become frustrated and confused.

Retailers that ignore customers’ cries for relevancy will experience a decrease in customer frequency, lower retention rates, and will be stunted in the effort to advance the customer experience across all channels. Consider the following:

  • Customers are increasingly disloyal. In the study Losing Loyalty: The Consumer Defection Dilemma, for the average brand, 52% of known highly loyal consumers in year one either reduced loyalty or completely defected the following year.
  • Customers are less forgiving. According to the Relevancy Report, 75% of people continue to receive promotions for products already purchased. And, according to a Harris Interactive poll of more than 2,000 adult consumers, 80% of customers will never go back to an organization after a negative experience.

Easy as 1-2-3: Defy Defection with Relevancy

Retail organizations that master relevancy, by demonstrating to their customers that their brand understands who they are, can anticipate their needs and provide offers unique to them and their particular situation. The following are three ways marketers can improve relevancy with business intelligence and therefore increase customer frequency and retention.

1. Centralize Customer and Marketing Data
A standard marketing database takes on a multi-dimensional customer view when combined with behavioral data (such as promotional response and web visits) and transactional data from POS systems.

With increased customer understanding and visibility into cross-channel communications, marketers can develop outreach programs specific to customer situations and eliminate duplicate marketing efforts and conflicting customer messaging.

Business intelligence tools are the ideal solution to bring multiple data bits together into a centralized repository. The beauty of business intelligence is that it typically supports different formats and different data structures, which means it’s easy to extract data from other applications and use for marketing efforts.

2. Analyze for Customer Insight
Many retailers still rely on spreadsheets or multiple custom reports to analyze and track customer activity and information. In the Aberdeen Group study, Providing a 360 Degree View of the Customer, senior marketers reported subordinates spending up to 16% of their time searching for customer data.

Business intelligence provides marketers with real-time data from all sources so that customer understanding can be achieved through self-enabled data mining, queries and data visualizations. The ability to slice and dice data means more insight becomes available and greater relevancy becomes achievable through the more meaningful offers delivered at the right time via the right channel.

3. Anticipate Customer Needs
Predictive analytics expands on analysis by applying advanced statistical and reporting techniques to reveal customer propensities. Based on the customer data within your data mart, analytic studies can be performed to develop models and scoring to help you achieve even higher levels of customer understanding and for developing effective and relevant communications.

Market basket analysis, customer attrition and churn models, customer contact optimization and cross-sell/ up sell analysis for example, provide retailers with deep and specific customer insight to develop relevant communications.

By applying business rules for contact optimization and by using event triggers, marketers can increase relevancy in their customer communications, improve response rates and achieve greater ROI while improving the customer experience.

If relevancy mastery is ignored, retail marketers risk customer defection and reduced customer loyalty. Conversely, mastering relevancy can improve customer loyalty and customer satisfaction and generate more revenue per customer.

Business intelligence software is a powerful marketing tool that enables retail marketers to prepare relevant communications cost effectively. Crafting, executing and responding with relevant communications?

Connie Hill is the President and Founder of VeraCentra, provider of on-demand marketing software and services. Hill is dedicated to helping marketers achieve customer intelligence through the use of business intelligence tools for analysis.

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