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KH TanGeneral Manager
Silk Technologies
Customer Life CycleMarketing
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Marketing approach to acquire newcustomers, retain and grow them intoloyal advocates through Continuous
Customer Interactions and CustomerLife Cycle Programs
Customer Life Cycle Marketing
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• Life Cycle Marketing Concepts• Customer Interactions – An Example
• Life Cycle Marketing Programs
Agenda
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• Customer Interaction• Closed Loop
• Personalised Communications
• Track and Measure
• Multiple Delivery & Response Channels
• Life Cycle Marketing Programs
• Continuous learning & Profiling• Integrated and Multi-tier
• Centralised Data Store
Customer Life Cycle Marketing
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Potential
Leads
Customer
RepeatCustomer
Marketing CommunicationsMarketing Communicationsandand
Marketing ProgramsMarketing Programs
Close Loop Marketing
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Potential Leads Customer RepeatCustomer
MassMarketing
• Mass Media• Direct Mail
to rented list
Direct Marketing Campaigns•Direct Mail
•SMS•Telemarketing• Fax Broadcast
LargeLargeBaseBase
SmallSmallBaseBase
Leads Management
LoyaltyProgram
Customer Life Cycle
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Delivery Channels
Person to person
Fax
TelephoneOrganisation
Traditional Media
Web
SMS
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Response Channels
Person to person
Fax
TelephoneOrganisation
Web
SMS
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Advantage• High Reach
• Consolidated data store
Disadvantage
• Inconvenient for
Customer to response
Multiple Delivery Channel with Single Response Channel
Vendor
Customer
Vendor
Press Ad
Fax
Direct Mail Mass Fax
Delivery & Response Channel
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Advantage
• Convenient for Customerto response
Disadvantage
• Low Reach
• Possibility of havingdifferent data store
Single Delivery Channel with Multiple Response ChannelVendor
Customer
Vendor
Press Ad
Fax Telephone E-mail
Delivery & Response Channel
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Vendor
Customer
Vendor
Advantage
• High reach
• Convenient for Customerto response
Disadvantage
• Possibility of having
different data store
Multiple Delivery Channel with Multiple Response Channel
Press Ad
Fax Telephone
Direct Mail Mass Fax
Delivery & Response Channel
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Potential Prospects/Leads Customer Repeat
Customer
LargeLargeBaseBase
SmallSmallBaseBase
Cost per accountCost per account
Cost per interactionCost per interaction
Customer I nteraction Cost
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Loyalty programs, Wide range of products. Very HighHighLowBills & Statements
High information need. High Involvement. Low knowledgebuyers. Very High expenditure goods. High Brand consideration.Big market share. Induce customer loyalty.
High Very HighMediumNewsletter
High information need. High Involvement. Very High expendituregoods. High Brand consideration
High Very High Very HighInfo kit
High information need. High Involvement. Comparativeadvantage. Higher expenditure.
MediumHighMediumBrochure
Higher rapport/goodwillMedium Very LowMediumCards - Greeting
For inducing direct order. Customers with high product categoryknowledge or low complexity goods. Weak brand or wanting toretain brand strength. Credence goods.
Medium Very High Very HighCatalogue
Mass Distribution.MediumMediumLowMailers
Short and sweet. Induce to take next step.MediumLowMediumPostcards
Formal approach.HighMedium to highLowLetters
DetailsPerceivedReliability
Amoun t Of Information
CostType of Collateral
Marketing Collaterals Comparison
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Customer I nteraction Example
Postcards A5 Mailer Postcards A6 Letter Statements
Prospective
Customer
New
CustomerLoyalCasual
Customer
Customer
Life Cycle
MarketingCollaterals
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Goal of Customer I nteraction
Mailer Postcards A6 Letter Statements
New
CustomerLoyalCasual
Customer
Customer
Life Cycle
MarketingCollaterals
To convert New Prospectswith no awareness of Silk Store and it’s products…
…into Loyal Customers doingfrequent repeat purchases
Employees at cash counter will ask customers to apply for membership.
Postcards A5
Prospective
Customer
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Demographic info from mailing list
MaleGender:
Blk 405 Bedok North Ave 3,#08-01Singapore 460405.Address:
Interest In SportsProfile:
40Age:Chris BalajiName:
FemaleGender:
66 East Coast Road, #01-01Singapore 428778.Address:
Interest In FashionProfile:
28Age:Jessica LimName:
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Customer Life Cycle
Postcards A5 Mailer Postcards A6 Letter Statements
NewCustomer
LoyalCasualCustomer
CustomerLife Cycle
MarketingCollaterals
Step 1: Send A5 postcards to mailing listAdded Space - A5 rather than A6 to provide more info.Personalization - of Greeting, Name & Address.Variable Offer & Background Image - based on Gender and Interests.
Prospective
Customer
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General Mailing P ostcard
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Personalized Name
Relevant department highlighted
Personalized Name
Relevant category highlighted
Personalized
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Targeted Offers
Targeted Offer
Relevant Messages
Targeted Offer
Relevant Messages
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Behaviour info from initial purchase
Initial Purchase usingdiscount coupons atChildren dept
Additional
Profiling :
40Age:Chris BalajiName:
Collected Freesamples from
Cosmetic dept
Additional
Profiling :
28Age:
Jessica LimName:
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Customer Life Cycle
Postcards A5 Mailer Postcards A6 Letter Statements
NewCustomer
LoyalCasualCustomer
Customer
Life Cycle
MarketingCollaterals
Step 2: Send A5 M ailerMini Catalog – Feature products from Customer’s Interest & Initial Purchase.Sign-up form – for Silk Store Card Membership. SMS info & collect card at the
next visit.Voucher – to encourage more purchases, thus customers are more inclined to notmiss out on maximizing benefits by gaining membership points.
Prospective
Customer
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Self Mailer
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Broad BasePrograms
Segment BasedPrograms
Behaviour Driven
Programs
LoyaltyPrograms
•• 4 Tier of programs4 Tier of programs•• Each targeting at different stageEach targeting at different stage
of customersof customers ’’ life cyclelife cycle•• Learn from programs in differentLearn from programs in different
tiers to develop and fine tunetiers to develop and fine tuneprograms in other tiersprograms in other tiers
•• Supplement with CustomerSupplement with CustomerSurveys and Focus GroupSurveys and Focus Group
Customer Life Cycle Programs
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•• Product/Solution BasedProduct/Solution BasedProgramsPrograms – – Build a base of customers andBuild a base of customers and
channelschannels – – Customer & Channel ProfilingCustomer & Channel Profiling
Product/Solution Based
Segment BasedPrograms
Behaviour Driven
Programs
LoyaltyPrograms
Broad Base Programs
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•• Industry Based ProgramIndustry Based Program – – Use profiling to select targetUse profiling to select target
industriesindustries – – Industry Focused SeminarsIndustry Focused Seminars
•• Profession Based ProgramProfession Based Program – – Use profiling to select targetUse profiling to select target
professionalsprofessionals
– – Professional SeminarsProfessional Seminars•• Interest Group ProgramInterest Group Program
– – Use profiling to select targetUse profiling to select targetinterest groupinterest group
– – Promotions and WorkshopsPromotions and Workshops
•• Channel ProgramChannel Program – – Recommend channelRecommend channel
Product/Solution Based
IndustryBased
ProfessionBased
ChannelDriven
InterestGroup
Behaviour Driven
Programs
LoyaltyPrograms
Segment Based P rograms
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•• Use data collected in earlierUse data collected in earliercampaignscampaigns
•• Recommend Target Industry,Recommend Target Industry,profession, interest group andprofession, interest group andchannelchannel
•• Upgrade ProgramsUpgrade Programs – – Recommend ReplacementRecommend Replacement
ProductProduct – – Recommend Volume or LongRecommend Volume or Long
Term Purchase CommitmentsTerm Purchase Commitments•• CrossCross --Marketing PromotionsMarketing Promotions
– – Recommend ComplementaryRecommend ComplementaryProductsProducts
Product/Solution Based
IndustryBased
ProfessionBased
ChannelDriven
Cross
Selling
Upgrade
Program
InterestGroup
LoyaltyPrograms
Behaviour Driven P rograms
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•• Recommend Product MixRecommend Product Mix
••
Business Group ProgramBusiness Group Program – – Recommend Business GroupsRecommend Business Groups – – Recommend Seminar TypeRecommend Seminar Type
•• Membership Rewards ProgramMembership Rewards Program
– – Recommend Target MembersRecommend Target Members – – Recommend Channel MixRecommend Channel Mix
•• Customer ReferralsCustomer Referrals
Product/Solution Based
IndustryBased
ProfessionBased
ChannelDriven
Cross
Selling
Upgrade
Program
MembersRewards
BusinessGroup
InterestGroup
Loyalty Based Programs
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Behaviour info from purchase history
Bought golf club
In sports dept
Additional
Profiling :
40Age:Chris BalajiName:
Bought dinner dress
In ladies dept
Additional
Profiling :
28Age:Jessica LimName:
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Customer Life Cycle
Postcards A5 Mailer Postcards A6 Letter Statements
New
CustomerLoyalCasual
Customer
Customer
Life Cycle
MarketingCollaterals
Step 3: Reminder P ostcard to apply for membersh ipIncentive to apply – Feature an exclusive members only discount on productsbased on customer’s Interest & Recent purchases.
ProspectiveCustomer
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Reminder P ostcard
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P ersonal P articulars In Application Form
Celebrates birthdayIn March
Additional
Profiling :
40Age:
Chris BalajiName:
Celebrates birthday
In July
Additional
Profiling :
28Age:Jessica LimName:
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Customer Life Cycle
Postcards A5 Mailer Postcards A6 Letter Statements
NewCustomer
LoyalCasualCustomer
CustomerLife Cycle
MarketingCollaterals
Step 4: Send w elcome letter to increase customer satisfaction
Highlight Benefits• Welcome customer to the loyalty program• Offer time limited discounts based on Interest & personal data to get
customers to start using their card.• Upcoming events relevant to Interest .• List of membership privileges.
ProspectiveCustomer
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W elcome Letter
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Loyal Customers
Postcards A5 Mailer Postcards A6 Letter Statements
NewCustomer
LoyalCasualCustomer
CustomerLife Cycle
MarketingCollaterals
Step 5: Continue to track customer purchase behaviourAnd offer relevant and timely info to customers in their statements.• Cross Sell• Promotions• Gift Rewards• Customer Referral Incentives
ProspectiveCustomer
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Loyalty StatementFor Chris Balaji For Jessica Lim
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Effective Marketing ProgramsEffective Marketing Programs
Increase SalesIncrease Sales
Sell ForwardSell ForwardIncrease UsageIncrease Usage IncreaseIncreaseMarket ShareMarket Share
IncreaseIncreaseDistributionDistribution
• to increase quantity per order• to reserve future orders
• by increasing shelf space• by increasing geographical coverage
• by increasing channel match• by developing EFFECTIVE channels• by identifying FINAL tier resellers
BrandBrandConversionConversion
For both new orcompetitor’s customers
For existingusers
For existingusers
Marketing P rogram Objectives
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CUSTOMERFOR LIFE
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Value ofloyaltyprogram
Customers’admin Cost
Fixed Value ofCash Incentive
Fixed Admin Cost
Highpropensityto act
Nopropensityto act
Lowpropensityto act
Lowpropensityto act
Customer P ropensity To Act
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Value of Incentives Admin. Cost for Loyalty Program
p l u s p l u sValues of
other benefits Admin. Cost for
other benefits
Bigger & Stronger Values
Same Cost for more usage
Value Cost Equation