A Day at Works

According to a survey of sales managers conducted by CSI Insight, 70% of Sales Leaders are not satisfied with their lead generation process.

Since Sales Dept believes that the best way to get higher sales volume is to have sales team call on as many prospects as possible then Marketing Dept tends to generate as many leads as possible. When the target is quantity then Marketing Dept tend to forget the quality. To do this, Marketing need to:

1. Segment & targeting to natural buyers first, for instance the natural buyer of statistical software is Faculty of Statistics, Underwriter, Claim & Risk Management. The natural buyer of a can of beer is a blue-collar worker – as you see it is depends on the position of the product in the culture and social settings.
2. When there is no natural customer, try deeper segmentation & targeting both using a-priori and post-hoc approach. For instance to sell a SUV Blazer, do preliminary segmentation study to understand who naturally buy this product. See, Blazer generally bough or popular among macho executive who has American education background. Other example is segmenting a ‘common’ product such as a tire, which more difficult to segment using a-priori approach, in this case we can use segmentation based on loyalty, usage or other behavior variables (post-hoc approach). Sometimes segmentation variables is very subtle, just like a case above, so ask your Sales Reps.
3. Remember when doing post-hoc approach, sometimes customers or prospects’ behavior depends on the situation and product offered. For instance for a rally, customer buy special tire, but for off-road hobby he buy mud tire, and for everyday use he buy medium class radial tire. Other example is customer who buys an expensive candle for a special event, but just ordinary candle for everyday usage.
4. Profile each ‘natural’ segment for future improvement. When market is not segmented there is few variables significant as differentiators but after segmentation hopefully many will emerge.
5. Make sure the leads can be served competitively than competitors, in other word we truly have something compelling to the leads.

Recently I have read “Loyalty Myths”. I think this is a B+ grade book in loyalty marketing. Find it at bookstore…. but before it I’ll share some myths….

Customer Satisfaction brings Customer Loyalty (Myth 45)

Merely satisfied customer not necessarily loyal, only delighted customer tends to loyal because relationship of satisfaction and loyalty is not linear. Besides satisfaction, brand imagery determines loyalty.

Spending on Customer Service increases Customer Loyalty (Myth 41)

Spending on the core of what customer value at will create customer delight then in turn loyalty. The important thing is that many businesses are not driven by services, but product. Think about consumer package goods (Coca Cola for instance), and automotive in which customer is more driven by brand and functional value of the product.Spending on additional and non-core service, such as a Birthday Greeting Card toward automotive customer would not automatically turn them to loyal.

Frequent Contact increases Loyalty (Myth 32)

This is a chicken-and-egg conundrum. Loyal customer tends to purchase frequently, and not otherwise. Delighted customer tend to be loyal customer, loyal customer tends to cognitive, affective and behaviorally committed.

Loyalty Rewards Programs will Solve Customer Attrition Problems (Myth 34)

Loyalty Programs can’t save bad product/ service. If an airline consistently cancelled your flight, would frequent flier miles really matter? The truth is consumer ranked Frequent Flier Programs at the bottom, just a head of airline food.Loyalty Programs which is not providing real value to customer will not contribute to customer delight. The programs otherwise educate customer to delay purchase, at certain periodic promotional events.

Firms should Emphasize Retention rather than Acquisition (Myth 2)

This Myth broke Product Life Cycle and Company Life Cycle Concepts. Retention is a sound strategy when the product/ company stay in maturity or decline stage. On introduction stage, the key is brand awareness, while of growth stage is customer acquisition / market share. Observe Apple which to soon focus on retention strategy before enough share to accumulate. Apple’s growth is steadily small compared to un-sophisticated Microsoft. Retention also rational when firms already satisfied to profitability of current customer portfolio and acquisition of new customer is relatively expensive. On some situation like after product launching, the firm needs to shape profitability of their customer portfolio since majority of customers enjoy special discount facilities. In other case acquisition is cheap, such acquiring walk-in customer to our Restaurant located at high traffic mall.

Customer wants to be Loyal and Interested in having a Monogamous Relationship (Myth 18, 19)

Customers nowadays want simplicity, they refuse unnecessary involvement. So relationship won’t work well in low-risk item or when customers generally buy the product on impulse or triggered by the need of variety. Even in B2B, customers want to reduce cost of purchase: time, risk and relationship. If customers involved in the purchase, they always have a back-up if possible to minimize risk. Customers more safely have a polygamous relationship.

Loyalty can’t be bough; it has to be earned (Myth 31)

Firm can’t bribe customers to earn their TRUE loyalty, but as loyalty reward program flourish customers learn to buy product/ service solely to get financial rewards or exploit the system. The extreme example of loyalty program hacker is David Philips who spent $ 3,140 on pudding cups at Healthy Choice to get $ 1.25 million American Airline frequent flier miles (worth 48 free domestic airline tickets and 12,000 desserts). If they won’t exploit the system, customers have well understood when to make a purchase – the promotional season. That’s why sales increase during promotion and decline after it. As loyalty reward program tend to establish exit barrier, customers focus their transaction to how much they already accumulated, not to awards they can win.

Dari semula, customer insight adalah mantra marketing. Semua aktivitas pemasaran bermula dari pemahan customer, dengan bersandar pada paradigma Positivism dalam research. Dalam perkembangannya, pemasaran semakin feminim dan semakin beralih kepada paradigma Interpretivism.

Positivism berasumsi bahwa customer adalah problem solver yang memecahkan masalah berdasarkan informasi yang dikumpulkannya secara rasional. Setiap event yang dialami customer dapat diisolasi, dan secara obyektif dapat diukur atau dinilai oleh customer. Positivism bersandar pada metode Quantitative yang dengan teknik-nya memungkinkan generalisasi terhadap populasi. Conventional marketing menggunakan metode ini untuk mengetahui kebutuhan customer dengan melakukan studi kualitative melalui Focus Group dan In-Depth Interview.

Dalam perkembangannya nyata bahwa pengalaman yang dialami customer yang bersifat subyektif (emotional), dan sulit dibandingkan (relative). Alih-alih bertanya kepada customer, customer menjadi binggung atau driven. Istilah yang sedang “in” adalah customer immersion dimana customer tidak ditanya namun di-observasi… Balik kepada Interpretivism, nampak bahwa marketer perlu makin berani mengevaluasi keseluruhan pengalan customer, meski dari pandangan conventional nampak tidak relevan. Interpretivism, kebalikan dari Positivism, sangat berfokus pada teknik Qualitative yang memang memandang setiap event yang dialami customer bersifat subyektif, tidak dapat diisolasi dengan fenomena, dan pengalaman lain, serta bahwa pola sebab-akibat perilaku customer hampir mustahil. Hal yang terakhir mungkin terasa ketika ternyata latar belakang geo-demographic, latar belakang psychographic, dan behavior semuanya saling tidak berhubungan dengan rapi.

So apa insight praktis bagi marketer? Jargon lama “Lebih mudah membiarkan customer mengutarakan isi hati dan pikirannya, daripada berusaha menyelami (get-in to) hati dan pikiran customer” telah berubah arah. Bila sebelumnya segmentasi dapat dilakukan berdasar variabel geo-demographic, atau psychographic, atau behavior – maka dewasa ini rasanya makin efektif kalau segment ditentukan berdasarkan need secara langsung. Dari sisi metode penelitian, research agency mulai meninggalkan FGD dan Interviewnya, dan beralih kepada observasi…. artinya perilaku customer tidak lagi dapat dicari cause-effectnya dengan mudah…. kita hanya bisa menginterpretasikan pola yang sudah terbentuk. So this is the new era of data mining I guest. Bagaimana bila datamining impossible dilakukan, seperti kasus pengembangan produk baru?

Jawaban conventional tentunya adalah comprehensive market test, mengarah pada evolutionary product development seperti yang dilakukan Jepang daripada melakukan pola big-bang alias inovasi seperti gaya Western.

Bagaimana bila product lifecycle-nya pendek sehingga evalutionary development malah beresiko tinggi? Jawabannya … goes to sociology and ethnicity study…. variabel-variabel besar dari customer, bukannya variabel family dan personal. Quite contradictive yeach….