Get. Keep. Grow.

Customer Relationships can be categorized into three uniques categories:

1. Getting customers – sometimes called demand creation, drives customers into your chosen sales channel.
2. Keeping customers – or retention, gives customers reasons to stick with the company and product.
3. Growing customers – involves selling them more of what they’ve brought as well as new and different products and encourages them to refer new customers.

These dimensions when put together are the outline each phase of marketing objectives. We previously discussed the marketing mix and how the Five Ps determine our marketing plan. We are now going to expand on the Five Ps by adding the three dimensions of customer development. Each dimension will require a unique message and marketing strategies to ensure customers are always being developed along the funnel noted below.

This part is the first section of the top diagram. The funnel section starting with awareness and ending with purchase.

As you move customers through the funnel, the number of potential customers declines as their interest grows, as they consider buying, and then as they make their actual purchase.

Getting customers, or demand creation, has four distinct stages in the physical channel: awareness, interest, consideration, and purchase.

• Awareness – lets potential customers know about your product or service and gets them thinking about your product.
• Interest – means the message is no longer being ignored even if the prospect isn’t ready to act. One more push could move this prospect to the next step.
• Consideration – if the message is powerful enough or contains a convincing offer that might lead to the thought, ” why don’t I” or ” what if I” consideration may take the form of a free trail where is offered.
• Purchase – clearly the desired result of “get” activities.While the description of customer relationship activates may seem simple at first, it’s actually the result of a complex interplay among customers, the sales channel, the value proposition and the budget for marketing activities. When you get it right, it all comes together in a repeatable, scaleable, profitable business model.

Example with JetBlue

Imagine you're JetBlue and you now have a new airline route going from LaGuardia in the United States in New York City down to Orlando, Florida and you really want to get people to know about this new airline route. You might run TV ads, you might run radio spots, newspapers, or your website, you might send out email and the first thing you're doing with this paid media is you're trying to get people aware that you even have a flight from New York to Orlando. This first step in a physical channel is generating awareness. People just need to know that this thing exists. The next thing that you might want is to know are they interested. Nowadays, even in physical channels, we could see--did anybody hit the JetBlue website and did they push the button on fares from Orlando and New York to Orlando, is there some interest or do they call your 1-800 number but really we're finally gets engaging in a physical channel. Is there people actually asking for the schedules and are hitting the "How much does it cost" page. In fact, what you really want to be tracking is--are people calling reservations or if this was a car dealership--are they showing up in the dealer, taking the car out for a test drive-- that's consideration. In the physical channel, it's really interesting to measure the differences between how many people did my ads or free media reached versus how many did I get in to my physical channel to actually consider the product. How many showed up in the store, how many showed up on my website, how many called the 800 number, and it's this space between actually doing and this is what makes it so hard in physical channels. It's all the effort on paid and earned media. You really don't know where those customers are until they're physically inside your channel considering the purchase, and then of course, when they say "I'll buy this fair" or "Book a seat."

It’s important to to think now about how the company will keep, or retain, customers it’s worked hard to get. It’s always cheaper so is a very important part of this relationship cycle. Generally, it costs 5 times less to retain a customer then to find a new one.

For this to work you must deliver on all your promises that got the customers to buy in the first place. Customers need to love the product and service, and every customer-facing aspect of the business model has to perform exceptionally, from customer service and support to complain-handling, delivery, billing, and more.

The company will need to make upgrades and changes to there product or service to always stay ahead of competition.

• Loyalty programs – how will you use these to retain customers… Points, rewards, discounts or multiple-year contracts.
• Customer check-in-calls – plan to call every customer or 1:3/1:5, once a month or every quarter simply to thank them for their business and see how they are getting on. Probe for feedback on the product, features and functions. Email is a commonly used tool for this however nothing beats a voice or personally touch like a phone call. (adding a human side to any part of business give you more credibility)Retention programs live or die by a close monitoring of customer behavior to learn who’s staying, who’s leaving and why.

Examples Airline

Airlines run something called the loyalty programs. They give you points, they give you rewards, etc. for staying with their airline.

Credit card companies love to keep you using their credit card because they want your business full-time, so they'll make up programs and things that make you think you are getting free stuff, points or airline miles.

Product Updates - Many paid apps are constantly updating and tweaking the product to keep customers by giving them a constantly improving product.

Most start-ups think only about the revenue they receive in their first sale to a customer, but smart companies think about the revenue they can get over the lifetime of the relationship they have with a customer. There is two parts to your grow stages, getting customers to buy more and also refer you to others.

• Cross sell – encourage buyers of a product to buy adjacent products.
• Up-selling – promote the purchase of “more” of higher-end products.
• Next sell – concentrate on the next order: can the company encourage a long-term contact, sell additional products and possibly become the customers primary seller. These basic customer growth strategies work in consumer goods as well as business-to-business.
• Unbundling – grow revenue. If a product is complex or multi-featured, split it into several products, each sold separately. This works well in many tech, software, and industrial product areas.

Examples

Honda attempts to up-sell their customers by displaying the Acura brand at Honda dealerships.

Amazon uses cross selling by saying, other people who bought this item also purchased...

Home Depot next sells orders with emails adding to your current project needs.

Additional Reading

• Startup Owner's Manual: How to "Get" Customers by Steve Blank and Bob Dorf

Vocabulary

• Cross-Sell
• Loyalty Programs
• Next Sell - concentrating on obtaining the next order.
• Unbundling
• Up-Sell

Student Activity

Identify how WCA interacts with customers along all three of the funnels. Provide 3 examples of how they make contact in each segment. If you cannot think of one, develop a new solution to the funnel.

1. Get Customers
2. Keep Customers
3. Grow Customers