As marketers we all want to deliver great customer experiences. Delight your customers with propositions they truly value and they will buy from you, ongoing. There’s no doubt this is a great strategy – for the long-haul. But what if this month’s sales are looking weak, the Sales Director needs more sales and the CFO needs to improve cash-flow and year-end EBITDA?
Sometimes we have to get hard-nosed, go short-haul and do some foot-in-the-door selling. In reality that normally means running campaigns that we know will generate 1% conversions – or 99% of prospects not convinced to buy. In reality that means going deeper into our scorecards than we would want to, knowing we will be contacting customers for whom the proposition probably isn’t right. In reality, we pinch our noses and ‘bomb the base’.
Balancing these two often competing goals – ‘right for the customer’ or ‘right for the CFO’, and doing this day-in, day-out, is todays modern marketing challenge and a critical part of today’s marketing skillset. And it can be done.
A while ago I tackled the same problem for a big mobile telco. They were implementing an inbound marketing system and needed to determine – in real-time, the right ‘Next Best Offers’ to present to each individual customer. Some of the offers were hard-nosed selling – recontracting, data add-ons, up-sell, cross-sell. These were predicted to have low conversion rates – but delivered real revenues. Other offers were softer – customer needs surveys, healthchecks, email address & data gathering. These would deliver higher conversions and – in the longer-term, more revenue through more loyal customers.The challenge was to balance and control short-term sales offer with longer term value. The answer lay in the theory of Expected Value:
Expected Value (EV) = Probability x Value
Using this approach an offer with a high conversion rate but low value (e.g. sign up for automated payments) could be compared to an offer with higher value but low conversion (e.g. cross-selling another product). Calculated in real-time, the outcomes could be ranked.
In addition, we came up with a method for modifying the outcomes to deliver against specific targets. If sales on a particular product were below target, we could upweight the priority rating of the offer.
This gave balance, plus control. And delivered commercial results, satifying the Sales Director, the CFO and the CMO – every modern marketers best outcome.
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