A blog for all things retail and licensing.
TwitterFacebook

Are You Willing to Pay the Price?

Instant Gratification May Spell Trouble for your Personalized Marketing Efforts

Guest Blog By Genia Chechersky

They say that “good things come to those who wait”, and when it comes to managing a personalized marketing program, these simple words of wisdom ring loud and true.

Retailers that achieve the most impactful results from their marketing programs don’t base their success on the performance of an individual campaign, as a significant amount of the value created through such vehicles can only be realized longer-term, after a minimum of nine to twelve months of operation. Instead, they’re using consistent and meaningful communications to bolster their relationship with customers, increasing the likelihood that they will shop with them not just during campaigns, but are also maintaining loyalty every day.

Although effective one-off campaigns can yield strong participation rates and immediate gains, the long-term value generated through an established and well-executed program presents a greater return. That’s because the most accurate marketing programs are executed to align with consumer insights and data from loyalty programs, including consumer shopping habits and key product preferences.

Retailers today have failed to see the big picture and are still seeking instant gratification as they drive their marketing teams to deliver immediate results, without assessing the trends inherent in consumer data, which can hurt their finances in the long run. The following are a few signs your marketing efforts are headed in the wrong direction:

•          You’re Delivering an Inconsistent Customer Experience:  One of the cornerstones of a successful marketing program is consistency. Customers need to know what to expect from a retailers’ communications, as well as when to expect them.  This conditioning is imperative to the long-term success of a marketing program.

When the pressure for immediate results is high and focus is lacking, teams begin to inundate customers with inconsistent, one-off messages. Consequently, developing any sort of relationship with shoppers becomes much more difficult, and opportunities for long-term value creation are greatly reduced.

•          You’re Not Measuring Long-Term Program Performance: While campaign-level metrics are important, the true value created by a marketing program cannot be correctly evaluated sans a long-term measure. A long-term control group must be established to help you compare the behaviors of shoppers who receive communications with the behaviors of those who do not, over periods as long as twelve months.

Marketers are rarely willing to forgo the short-term gains associated with higher circulation numbers for the sake of this analysis. By only measuring campaign results in the short-term, teams are more likely to understate the value that their programs create for their organization in the long-term.

•          You’re Focusing Too Much on Winning Back Lost Customers: Another major marketing misstep is to focus too much on your lost customers at the expense of your most loyal ones. While sending a rich offer to a lapsed customer may drive an incremental trip in the short-term, doing so won’t create a lot value for your organization in the long-term.

Instead, a minimum of 60 to 70% of your budget should be allocated to your best customers – the ones who account for the majority of your sales. By rewarding this group with meaningful offers and communications, you will not only maintain their current engagement with you today but minimize the need to reactivate them down the road.

At the end of the day, organizations that are serious about generating the most value out of their marketing programs – and measuring that value correctly – must abandon their myopic mindsets. Teams would be well-advised to commit to developing long-term customer contact strategies; designing compelling and sustainable marketing programs; and investing in the necessary program measurements, even if it comes at the expense of immediate gains. After all, “patience is bitter, but the fruit is sweet.”

Genia Chechersky is a Manager for emnos U.S. at the firm’s Chicago office, helping retail clients leverage their consumer behavior insights into actionable sales and revenue. Contact her at info@emnos.com.

Leave a comment

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>