Jürgen Stephan

on June 24, 2010

category: direct marketing

Executive Director, New Business Development

Stick to your loyal base and grow with them

I recently talked to the executive team of a prominent financial services organization discussing their plans to upgrade their customer profile from beginner to advanced user.

While seeing higher transaction frequency, higher average dollar values per customer and a higher lifetime customer value seem like obvious goals, this isn’t a gimme. Other competitors want the same thing and the question becomes who’s better equipped to deliver. If some competitors spend four times as much in media and invest heavily in tools for advanced users, that may give them a leg up.

Being a passionate soccer player, I know a thing or two about leveraging one’s strength. If you have an excellent striker on your team, you use him and support him through the wings. If you have a strong defense, you destroy the opponent’s game and rely on a few counterattacks to win the game.

There may actually be nothing wrong with sticking to the beginner segment, following them along the lifecycle as they mature and varying the service offerings to stay their default choice: from first job, to marriage, to first child, to first house, to first college student, to divorce, to retirement planning, etc. Of course, you need to be smart about catching them early on in each stage – or they may fall into the arms of others. Never a dull day in marketing, is there?

You can even use your beginner customers to recommend you through a well-orchestrated referral program and you will become a more meaningful part of their life and network. 

If your industry category is fairly commoditized and highly competitive, growth may come less from adding different kind of customers, but through increasing your sphere of influence from within your core market.  And as long as your target universe is sizeable enough, and the industry category is growing as well, it’s good to carve out a niche that others don’t seem to be that interested in or have less credibility in.

You can always test your way into the advanced user segment, perhaps you may even consider a separate premium brand if you find early success, but be careful not to do a “180” on your core product or service all too quickly.  Rather, stick to your loyal base and grow with them.

 

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Spyro Kourtis

on June 7, 2010

category: miscellaneous

President and CEO

Common sense in a crisis

I’ve been thinking about the BP oil spill – in part because I can’t escape its omnipresence in the news. In fact, this story is so ubiquitous even I was asked  by CNNMoney.com to give a quote about the new apology ad. If you’re interested, you can read my off-the-cuff response here.

Spending $50 million on an apology ad makes no sense to me. Tiger Woods called a press conference. That’s what every scandal-stained politician does, too. This story is enormous. BP would have gotten coverage – without the expense that seems so inappropriate right now. In fact, BP should stop spending money on advertising now.

So what would a good communications strategy be?

1. Certainly an apology is in order – and probably should have happened much sooner.
2. Communicate the plan you have.
3. Communicate that, while you’re optimistic, you have a plan B if plan A doesn’t work.
4. Talk about your timeline.

This approach would help build confidence. Instead of giving your entire communication strategy to the news organizations, BP would take more control.

But, the difficult thing for communicators to deal with is that nothing is going to help this PR disaster until the leak is stopped and the spill is cleaned up.

 

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