The need for improved customer engagement and relevant messaging has never been more evident. Customers are in control and they are frustrated by today’s mass marketing practices. And this is by no means a myth. In fact, studies have shown that 41 percent of consumers would terminate a brand relationship due to irrelevant marketing promotions, and another 22 percent say they would dump the brand altogether. To remedy to this problem, award-winning marketer and vice president, marketing, executive briefings and education at Ricoh (Booth 2600), Sandra Zoratti has developed Precision Marketing (PM), a six-step process to adopt, refine, and expand the use of data to drive better marketing results as measured by revenue, response and ROI.
In her recent book titled Precision Marketing: Maximizing Revenue Through Relevance, Zoratti breaks down the process and reinforces her strategy through real-world examples like the case of Fiat Group, the famous Italian automobile manufacturer.
The case of Fiat serves as great example of how a carefully-devised, data-driven strategy can dramatically improve customer retention rates – ultimately resulting in increased revenues and ROI for a company’s brand.
Knowing that from a cost-savings point of view it costs seven times more to acquire new customers that it does to retain existing ones, Fiat decided it was time they put together a cogent plan for improving their customer retention rate. Fiat was well aware that this would require significant planning but they understood the benefits of reworking their marketing strategy to ensure the needs of their existing customers were being adequately met.
The next phase in Fiat’s plan involved developing and executing a customer retention strategy that would guarantee success. The company began gathering customer data on existing and prospective customers as well as purchasing third-party data on car purchasing behavior such as information on how often people replace their vehicles. Using sophisticated software from SPSS, Fiat mined the data to predict customer responses to the brand, predict dealer actions, and boost online marketing activities.
As you can from example above, Fiat leveraged existing customer data to learn more about their customers, enabling them to personalize marketing messages, thus preventing customer defection. And as a result of the customer retention program, Fiat was able to improve their customer retention rate by over six percent! The net result: 54 percent of Fiat owners remain loyal to the brand and purchase a new Fiat when they replace their old vehicle.
The bottom line is that customers are voting with their dollars as well as with their attention. And as evidenced by the success of Fiat’s targeted messaging strategy, this method can improve the way you talk to your customers, which will benefit your brand and overall business in the long run.