When Customer Relationship Means Growth – Growth Hackers
Customer (used to refer to a “user” throughout the post) Relationship is the core of marketing (however you define it). And I won’t be amiss if I said CRM is the core of building Customer Relationship. Some of you may say, what’s the difference. You are right, what’s the difference. But in reality, it is unfortunately dramatically different.For many, CRM is a capability, a channel, a technology/software or a thing while Customer Relationship is an outcome you have to work really hard for. You have to earn it. I recently shared my perspective on CRM as an underlying philosophy and mindset. Why there is no such thing as a CRM campaign and why CRM is NOT a technology or a channel.Brands need to work hard to build trust and be relevant at every single interaction and even harder in-between those interactions in anticipation and predicting what the user may need and expect. CRM is an always-on “user obsession” that challenges you as a brand to think about elevating the user experience for your most loyal user, not just the one at risk. It requires empathy and deep understanding of what inspires your user to come back and what disappointed some to churn and never come back. This mindset is channel agnostic. It is journey agnostic, what you do in the process to acquire a user is as relevant as what you do post acquisition. It needs technology, it itself is not technology.Source: Brian Balfour’s Blog on Never Ending PMFMost start-ups struggle to follow the blue trajectory ie stop the churn after a certain percentage and maintain a steady state of daily and monthly active users. That retention curve is a start-up dream. While the product plays the most critical role in driving retention, data-driven messaging that is relevant, timely and contextual builds the overall experience.Source: Business InsiderAcquiring is easy (relatively speaking), continuously engaging and then retaining is extremely difficult (again relatively speaking). CRM is retention, it is lifetime value management, it is a key indicator of product-market fit, it is an OUTCOME which is GROWTH.Brands that build this relationship that leads to trust and loyalty benefit from organic growth. This is when your loyal users bring more users through WOM or other product driven loops. Another sign of a healthy product-market fit.Of course easier said than done. There are many reasons why 90% of brands still struggle with user relationship, retention rates and repeat habits that drive breakthrough growth.At the core of these challenges it’s a mindset that limits CRM to a commodity:Sending promotional and/or triggered emails, direct mail or SMS to a group of consumers is CRM.“CRM campaigns” are separate and isolated from consumer marketing or advertising efforts.Having a database that stores consumer information is considered CRM.Buying/renting a marketing automation software is doing CRM.Sending emails or direct mails is CRM.It only begins when you become a user.Key Principles for Transforming CRM into GrowthUnderstand Your User — Holistic Segmentation Strategy that is ActionableThere are no short cuts here. We all think we understand our users, their needs, behavior and barriers. We really don’t. Simply because our understanding is isolated by channel, isolated by systems that are storing siloed pieces of user data.A holistic understanding and segmentation requires a holistic data set, that cuts across channels, systems, data sources (1st party, 2nd party, 3rd party), across qualitative and quantitative research. Remember that it is the same user, going through a unified journey to solve an emotional or functional need.Once you’ve established your segments and cohorts, slicing and dicing your user base based on demographic, habits, behavior etc etc; how much of that is actionable? Are your segments purely altitudinal or have you overlaid these segments on top of your 1st party data to know exactly who your existing user base is. If you don’t understand your existing user, you will not understand your future user.Define & Understand Movement of Users Across User StatesBrands often look at user base as active or inactive; daily active (DAU), weekly active (WAU), monthly active (MAU). Based on the nature of the platform, these can be lagging indicators. To drive stronger engagement, brands need to understand more micro user states that may take many behavioral, attitudinal variables into account.The user state definition can be static rules using these variables or an ML based algorithm; more importantly should be re-evaluated on a frequency that matches your ideal platform usage frequency (daily, weekly or monthly?).Source: inspiremartech.comThe triggered messaging (across whatever appropriate channel — push, in-app, email, social, DM) can happen within user states (relative engagement level/score deviates beyond an acceptable limit) or even more importantly as users move in-between states; a core user deviating to casual is a leading indicator of potential churn/lapsed state.A user state level messaging strategy is more scalable, dynamic and can alleviate the complexity of real time decision making within your messaging platform. The user states are evaluated within the data layer; de-coupling the messaging platform from actual decisions (a perpetual pain-point for high traffic and engaging platforms with multiple behavioral variables).CRM is Channel Agnostic but think User Protection & GovernanceCRM is not a channel and cannot/should not be organized, planned and executed like one. You need to meet and exceed expectations wherever your user may be; online or offline, across social, direct mail or email or on your platform. You need to leverage user data and insight from all channels and touch points; transform that data into information and insight. Then deliver the most immersive and relevant experience back through any and all of these channels.While you overcome that obstacle and become channel agnostic, you need to think “user protection” in parallel. Just because the user has opted-in across channels does not mean you bombard the user with messages. Implement user protection both within a channel (relatively easy since this is managed through a single platform and often one team) as well as across channels; often more difficult because the communication happens through multiple systems and often by more than one team. True user protection needs underlying processes across teams and an underlying system that connects “user response data” from different channels. It also requires data matching/mastering across known identities (email address, userIDs/GUIDs, cookie ID, device IDs, mailing address) to create a universal user profile with every single interaction mapped back to the user.User protection is balancing the frequency of user communication across channels, not just over communication but also under communication.Experimentation, Measurement and Optimization for Better Retention RatesThe cliché of “right message to the right user through the right channel at the right time” is still valid. But there is no simple way to execute it. The right message to the right user is only as good and as real as your next experiment. No amount of analysis, hypothesis and expertise can get it right the first time every time. What you do get right is the process of experimentation; test, test and then test again. Test different variations of the message to the same segment. Test the same message to different segments and see what works. Test different trigger points with specific channels and see what drives better engagement and response. For instance, certain channels may be more effective for re-activation while others like in-app messaging may drive better engagement and habit creation.Next Best Message with Machine LearningNothing can predict the future better than the past. You can take all past variables, permutations and combinations as inputs (what message worked with what type of user, through what channel at what time within what demographic) and use ML to determine what may be the most appropriate and best next message for an individual user. IBM Watson’s similarity analytics is a potential capability that takes past performance to automate subsequent communication.The Technology ImpedimentBelieve it or not, the underlying CRM technology especially for more triggered and automated messaging is still underwhelming at least for certain types of businesses. It has come a long way for more traditional eCommerce platforms; sending cart abandonment follow up communication, targeting and retargeting. It is still a challenge for more complex, more interactive and engaging mobile platforms with far more behavioral triggers. They have more complex (variety, volume) user level on and off-platform data. Most messaging platforms require this first party data to be loaded into the cloud which in itself could be a challenge. Lastly, the real time decision making using these behavioral attributes also becomes a bottleneck when the scale goes beyond a few hundred million users. This is when you have to choose between a build vs buy/rent vs hybrid approach.CRM connects to everything — Horizontal Organizational ModelYou cannot establish the CRM capability in a vertical silo, it needs to be a horizontal orchestration within your org model that touches and connects with everything a user does. More often a CRM team is responsible for email and DM communication. Instead, it should be a function that sits underneath every channel execution team; responsible for the overarching user experience and user protection.ClosingAdvancement in data, technology and media has put the user at the center of the ecosystem. It has given the user tremendous choice and control with high expectations. This leads to a whole new world of “Customer Relationship Management” as a fundamental strategy and objective, way beyond an individual tool or tactic as the acronym “CRM” may suggest at times. When done right, Customer Relationship is a growth outcome. There is no better growth lever than a user organically bringing more users into the system. For that to happen, brands need to earn and build Customer Relationship.Click here to view other posts from Mayur Gupta.
When Customer Relationship Means GrowthMarketing has evolved substantially, from the times of the “Mad Men” and witty creative ads and billboards, to driving user engagement and accelerating business growth. The vast amount of data at our fingertips and the evolution in technology has made marketing more targeted, relevant, measurable and more accountable. The change is fast and no longer an option.