Winback and Acquisition Strategies

Winback and Acquisition Strategies

I. Winback strategies II. Acquisition strategies

I.

Winback strategy

winback strategiesan effort to reactivate and revitalize relationships with high-value, lost customers

I. Winback strategies
1-1 1-2 1-3 1-4 1-5 Identify who is about to terminate Consider lifetime customer value Establish why customers terminate Re-contact lapsed customers Provide a reactivation offer

1-1 Identify who is about to terminate

CRM triggerautomatically signals that a customer is about to be lost, usually based on RFM information so that the organization can take proactive steps (call, e-mail, letter, personal visit)
Exhibit 7.1: CRM Questions of Winback

1-2 Consider lifetime customer value

estimate future valueCadillacs share dropped from 51% to 15% because its customers owned their last car while BMWs share rose as its younger target base grew older and wealthier

1-3 Establish why customers terminate

customer exit interviewan attempt to ask, Why are you leaving us? focus group interviewa group of 8 to 12 former customers who would be paid a fee to talk with a moderator about the reasons for leaving the organization or for failing to purchase from the organization listening postsfrontline personnel, who have direct communication with customers, are in a unique position to gauge customer response and to learn why customers terminate their business with a company

1-4 Re-contact lapsed customers

winback teama designated cast of salespeople with good communication skills is assembled to perform the recontact and reactivation tasks situational scripta canned presentation of talking points for the contact-sales person to use during the winback process

1-5 Provide a reactivation offer

reactivation offerthe reason an organization gives customers to return to the fold

II. Acquisition strategies

effective acquisitiontied to effective retention as the firm understands who is most loyal and why, the characteristics of loyal customers and which segment(s) should be targeted with its offer

II. Acquisition strategies

2-1 2-2 2-3 2-4 2-5 2-6 2-7 2-8 Objectives Strategy Natural referrals Affinity programs Affiliation networks Relative advantage Switching costs Point of entry

2-1 Objectives
goals and costs of acquisition estimate costs of acquisition; calculate average cost of acquiring a customer; determine number of months needed for a payback to the organization of the investment; and evaluate the average new customer profitability to set customer acquisition objectives

2-2 Strategy
potential target marketscustomer segments considered to contain highvalue potential customers for an organization
Exhibit 7.2: CRM Aspects of Acquisition

2-3 Natural referrals

natural referralssincere and heartfelt recommendations of satisfied, loyal customers unique selling proposition (USP)the organizations distinctive aspects, also known as its competitive edge, determinant attribute, relative advantage, or differential advantage

2-4 Affinity programs

affinity marketinga strategy that is based on marketing to group memberships or associations, such as the World Wildlife Fund (WWF), or local Parent Teachers Associations (PTAs) where the membership group or association endorses the product and/or co-brands group-purchasing programsleverage the collective buying power of association members. co-brandingthe use of two individual brands on a single product that targets consumers who are inclined to participate because they share a common interest or background with others in the membership group

2-5 Affinity networks

affiliate network programa process to reward people who act as sales agents for the organization and who receive a commission on each sale based on that referral

2-6 Relative advantage

lead usersinnovators and early adopters of new technologies; where, studying lead users can predict what the future will be like with other customers customer complaintsthe organizations first opportunity to prevent a customer from becoming lost

2-7 Switching costs

promotional offersan inducement for customers to switch from competitive firms by easing the transfer task for the customer through a customer centric focus on barriers product samplinga trial sample or free trial stimulates brand awareness, provides information, and allows customers to gain first-hand experience money-back guaranteereduce barriers to entry and, particularly when it includes a stipulation of a certain length of time, is another means to ensure that the money spent to acquire customers from competitors will result in a return on that investment

2-8 point of entry

point of entrythe place when a never-before-consumer becomes a customer or user of the service logical entrydevelop a system to describe who is likely to enter the product category at what time and be proactive in reaching those first-time buyers