You've invested millions in collecting customer data. Now how do you go about using it to grow revenue? One solution on the horizon is event-triggered marketing. This is an approach that focuses sales activities around critical buying events in the customer life cycle. See what Rick has to say about what could be a profit-growing strategy for you.
Management Considerations
Event-triggered marketing is a strategy that identifies and clusters patterns in the customer life cycle, automatically delivering product offerings at a moment in time when a customer is ready to make a purchase decision. Customer events are segmented by revenue clusters, product life-cycle clusters, and customer behavioral clusters. Revenue clusters generate sales from marketing triggered by customer grouped events. Product life-cycle clusters focus sales efforts on customers when they are most susceptible to purchase. Customer behavioral clusters focus marketing on the analysis of buying behavior.
Event-triggered marketing will be critical to realizing a return for the vast investments most organizations have made in customer relationship management (CRM) technology. Service, support (e-care), and fulfillment organizations will be critical to monitoring the customer life cycle. In addition, organizations must find ways to get analytical and operational CRM technology working as one. Analytical CRM (data mining and warehousing, marketing automation, and campaign analysis) is needed to identify critical events in the customer life cycle that trigger purchase decisions. Operational CRM technology (sales, marketing, and service automation) is necessary for creating a targeted vehicle to deliver resale, upsell, and cross-sell opportunities.
In the short term, revenue opportunities must be re-segmented to establish targeted marketing program priorities. Business leaders must then think differently about their customer and market segmentation in order to develop precision programs that translate into profit centers.
Over the long term, executives must codify event-based programs that deliver substantial results. Event-triggered marketing creates new exit barriers by eventually heightening customer expectations for personalized service and customer care. This approach can differentiate their offerings on the one hand, but create risks for those that do not codify programs and execute consistently on the other hand.
Event-triggered marketing will evolve slowly over the next four years as follows:
Scheduled events (1999-2000): Currently, most event triggers are focused on birthdays, anniversaries, births, and other “landmark” events in which product offerings can be clustered. Nielsen/NetRatings reports that on Mother’s Day, e-tailers sell significantly more gifts (203 percent) than sales relative to other days, for example. To date, IMT Strategies research indicates that 33 percent of businesses (B2B and B2C) report using triggered emails to some degree but less than 10 percent have seen profits. 1-800-FLOWERS.com is among the early innovators, allowing customers to choose from a number of personalized occasions to deliver timely emails reminding them of an upcoming gift-giving event. It has proven that email marketing triggered by self-appointed customer events is among the most effective marketing programs.
Causal events (2001-2002): As organizations assess and reassess initial efforts, the next progression is to trigger product offerings based on predefined customer activity paired with a predetermined, optimal response. They will better understand the “cause and effect” of events. For example, WebMD.com provides articles pertaining to health, nutrition, and wellness. In the course of a search on improving cardiovascular health and weight loss, the customer is presented with an offer to purchase gym-quality treadmills at discount prices.
Associational events (2003-2004): Associational events represent the highest level of event-triggered marketing. As associational triggers are introduced, they are most likely to come in the form of “product-centric” triggers, relying on three or more customer variables. Credit card companies have always scored customer behavior to approve and trigger credit service offerings. Credit card companies monitor events such as large paydowns, name changes, change of address, new zero balance, large transactions, and teaser date expirations to direct their targeted marketing campaigns. Multiple sequences of customer behavior can then be formulated to produce a suitable offer. For example, a name change combined with a change of address and a large transaction at a furniture retailer would signal the credit card company that there is a change in lifestyle. This might trigger an offer for investment counseling or homeowner’s insurance. Kraft’s Interactive Kitchen is already using associational triggers. Punching in a few ingredients in a “Make It Now” search engine provides the recipe and recommendations for Kraft brand ingredients. In addition, the eager cook can link to Amazon.com to buy kitchen tools and gadgets.
Event-triggered marketing provides a framework for four types of service offerings. Resale opportunities are automated to deliver a message that a product held in stock is in need of replenishment. Modified resale informs the customer that a product has been improved. Upsell strategies are triggered when a customer has purchased a product and receives an offer for a higher model of the same product line. Cross-sell situations provide complementary products to a purchase.
Bottom Line
An empirical market analysis is necessary to determine concentrations of event-driven revenues and other potential triggers that will provide solutions to customers’ unmet needs. By monitoring initial efforts, organizations can identify strengths to build upon and correct errors, balancing trigger frequencies to deliver products when it is most relevant to the customer.
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