I promised that I would suggest the short, but important, methodology that we use to provide intelligent customer interaction. So the first step, needless to say – and that’s why I primed you well for this – is having this comprehensive customer profile. It’s very important. As I talk with people, I say, if you have a bad customer profile, you are not having an intelligent customer interaction. It’s unlikely to happen.
A good customer profile that’s kept up-to-date, that’s relevant, that’s dynamic, that’s the type of profile you can now leverage with analytical tools to better understand what’s going on with the customer.
Now if I am not clear, by the way, the profile itself is fed by other systems. It could be financial system, shipping systems, customer service systems, or operational systems. So we have multiple feeds coming in to the profile. That’s why the profile is dynamic, and we can run our analytics off of it. The second step in intelligent customer interactions is what I like to call “self learning”.
And if you are not familiar with that concept, think Amazon.com. You buy your first book. And then somebody says, “people who bought this book also liked this other book.” And someone observes at Amazon, did you buy the second book? So did you come in for a one time gift, maybe, or is it really a topic of importance for you that you are going to buy others.
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Self-Learning Is Another Very Important Tool
So self-learning is another very important tool that will help drive intelligent customer transactions or interactions because we are know, we are learning what you like, and what you don’t like. You have to be a little careful here. But the bottom line is it’s an important way to understand what's important to you and that is self-learning. The third step is that two-way customer dialog, again, across relevant channels. And I am very keen on this that we think we know a lot about our customers, and many of us do. But the customer also has their opinion on us, and some times they will share with us, but they certainly share it with others. So our job is to troll the blogosphere and so forth and begin to capture that type of information.
If we have a profile that’s comprehensive in place, if we have got a self-learning capability in place and we are really beginning to have a two-way dialog across relevant channels with our customers, then we are ready for the remaining three steps. When you are best in class, then you begin to target your markets carefully based on a bunch of criteria that comes out of your analytical tool, and you begin to offer unique products and unique services to groups of people that have shown a proclivity to buy that type of product or service.
And what we have learned over the years is that it's not just the targeted campaigns, but it's targeted campaigns which are driven by event triggers. And you find event triggers are a way of enabling more relative offers to customers based on their segmented meaningful events. Think weddings. Think divorces. Think kid goes to school. Think new car. Think becoming 16 years old. These are types of events, rather than non-segmented mass campaigns which can cause customer contacts. I mean it’s impressive. Event-triggered marketing has seen five times the response rate of non-time based marketing campaigns. So that’s true. That kind of speaks for itself.
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Analytics Applied to Targeting Campaigns
We will pick up the targeting campaigns. We will hopefully trigger them by events that are happening within the transaction. Then we are ready once we review how the campaign did or did not go. We are getting now into a closed loop process obviously. So I know who bought when, and who didn’t. Now we apply our ongoing analytics, and there are some great tools that are being offered in the market. We think we have a great solution in that regard.
We are going to pick those analytical capabilities, in order to slice the data every possible way until we get some good intelligence. And that will then feed it into a better and more comprehensive profile that we can use to, again, run through the six steps.
I have two quick examples that I am going to finish up with. Let’s say you have a standard AAA membership, and you get three tows. On your third tow, you are going to be more than likely offered a plus membership, AAA+ membership. At this level many of the clubs will give you a fourth tow. And that costs you a few more bucks that more than covers the cost of the fourth tow. But it's just the way of intelligently knowing what has happened to you and then what you might need.
If you have two batteries that go dead, and you have two calls, and you have to jump start your battery, a friend with AAA will get some type of a call or an e-mail or some outbound capability that’s suggesting we can offer you a battery service because they sell batteries. It’s sold at a discount because you are a AAA member. Again, this is an example of an intelligent customer interaction.
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Cruise Company Analytics
If you have taken two or more cruises in the last three years with AAA, on a cruise ship, you are going to be getting information on only special cruise promotions that they feel are unique to the way you have shown you a proclivity for travel. Let’s say you happen to be traveling on Amtrak, and let’s just say because you are based in Washington, D.C. You are a regular traveler from D.C. to New York City on the train. It's just the easiest way to get between the two cities. And sometimes you will travel business class but not all the time.
They know an awful lot about you from their operational databases, my previous behavior, transactional behavior, and demographics. When they see you traveling to New York, for example, the next time they will offer you a 30% or some type of discount on the D.C. to New York train in a business class ticket. Or if they see you traveling on the weekend, they might offer you a “buy one get one free” so my wife and two kids can all go up to New York and enjoy that particular weekend.
So that’s certainly what I wanted to say this morning. I will just close up with just the question of so how do you know that intelligent customer interactions are actually working, and I have just a couple of thoughts. If you notice your lifetime value, if you notice your cross and up-sell is going up to that particular customer, you begin to ask a question is that because we have better intelligence about how to deal with that customer. When you see customers wallet share, the percentage of money they spend on you versus competition rise, we can ask this question how much of that can we attribute to intelligent customer interaction.
When you see the customer product index, or how many products you sell to a particular customer rise, it gives some indication that you are using your intelligence to help them buy more and feel comfortable with those products. Some people measure the KPI of average revenue per customer. Is that on the rise or decrease. Or look at the other metric, retention. Some customers put a lot of emphasis on loyalty as a good indicator for intelligent customer interactions working. Is that going up or down?