Business practice | PPC91 May 2018
Michael Collins is Managing Consultant at Database Marketing Counsel providing database marketing and CRM consultancy. He turns his attention to the world of pest control to help us rethink how we collect and use our customer data.
The UK economy grew by 1.7% in 2017, a trend that economists are forecasting will continue. While this fuels improvement in consumer spending, corporate cutbacks from the previous recessionary climate have become ‘business as usual’ and present challenges to those working in the B2B sector including commercial pest management.
It is therefore essential for pest control companies to address their business imperatives like:
- Retaining customers
- Determining propositions to help withstand competition
- Strategies for recruiting new customers
- Establishing advocates.
- The solution lies in leveraging one of the most valuable of business assets: the database.
The database can be a powerful marketing tool for the pest control company that knows how to use it. Knowledge of your customers can drive a better understanding of their relationship with the you, leading to more relevant communications, better management of their engagement and increased loyalty.
Good data practices
Some pest management companies will have a system with all information in one place. But the more likely scenario is where some data is held in a central system while more is held in departmental spreadsheets. The object is to turn all that data into information and that information into knowledge or insight by bringing together everything you know or could know about customers. This could include prospects and leads, their activities, actions, purchases and behaviour. This is also an important consideration when planning for GDPR (the new data protection regulation).
There is no substitute for accurate, reliable data when aiming to understand a customer. It’s the quality that will determine how specific a view can be reached. Inaccurate data will skew results so data must be assessed before any analysis is applied. This way there is at least awareness of the inaccuracies to help in the interpretation of the outcome.
Putting your data to work
Analysis can reveal how long a customer stays loyal and what might be done to pre-empt their leaving to another pest control provider and identify the segments within the customer base, for one-to-one marketing.
While most people see the benefit of segmentation, the challenge is often defining the segments. You might segment consumers geographically or by demographics, and businesses by their premises type, industry sector, company size or turnover.
Equipped with that kind of data you can start revealing important measures. Begin by determining which of your services the customers encountered and how many have availed themselves of the various combinations on offer, so that you can repeat or cross-sell.
This is the concept that we recognise when buying consumer products online, often referred to as ‘the Amazon effect’. These are the helpful hints that tell us that people who bought the product being viewed have also bought another. It is known as ‘market basket analysis’ and is a totally valid model across any combination of goods or services.
The next most interesting insight is usually how good a customer they are. Building a simple score based on how recently they have interacted with you, how frequently they buy and how much they spend can become a robust measure of their loyalty and fluctuations in that score will reveal changes in behaviour that can either fuel reward or concern, but will alert action to be taken.
Gaining such insight into customers and other contacts will help a business understand which are the best, what opportunities exist, how to hold on to them and find more like them. This insight also provides the other side of the coin: who the worst are and what they are costing in lost opportunity so that they and others like them may be avoided in the future.
What is determined about current customers can also be applied to prospecting. By applying the profile knowledge to new enquirers and leads, you can be better prepared for what kind of customer a new prospect is likely to be and therefore drive a nurturing programme that is personalised to them.
Using data to manage relationships
Customer relationship management (CRM) itself is not software or technology. CRM is a strategy that has implications for, and which can benefit, all areas of the business. Any touchpoint with customers – not just marketing campaigns – can be better executed from the position of greater knowledge:
- The marketers can be ensuring the best spend of their budget and maximising opportunities
- The finance department can track where budget is being spent and where it is effective
- The senior management can have an overall view of how the company is being run.
While this sounds very laudable and makes for a worthy goal, many businesses run headlong into what they believe CRM to be without fully assessing the consequences or even truly understanding the approach and whether they are fully prepared for it.
Pest management companies need to understand how a customer wants the relationship to be managed – what channels of communication are preferred, what kind of proposition is welcomed. There is a balance point that must be identified and acted upon. There are those who, unless they receive every offer going, feel unloved; and at the other end of the spectrum there are those who want to be left to their own devices. Both could be equally loyal, and that loyalty will be undermined if one fails to understand how they want to be dealt with. It is also a requirement of GDPR compliance that these preferences be managed properly.
The solution is to build a framework that integrates commercial objectives with the skills of the staff, business and market intelligence, and the dialogue between you and your customer.
The starting point, however, is not the implementation of software. Many CRM projects have failed since they have focused on the technical aspects of the system instead of the data, commercial and cultural aspects. What is required is a properly constructed CRM strategy that is based on a solid, defined business requirement that has been bought into by all stakeholders.
Managing customer information in the ways discussed will provide a way to address business imperatives, making more convincing propositions and recognising opportunities and the best channels for communication. Pest companies will be better placed for testing initiatives and creating profiles to drive more profitable relationships.
10 points to be considered about customer relationship management
- Access a complete view of your customers, products and channels
- Understand the value of the data collected within your business – transactions, promotions, market research, website
- Define your business objectives and ensure you collect the data to support them
- Analyse the information to determine where to direct your marketing efforts
- Initiate campaigns that will yield new customers and retain existing ones
- Ensure propositions are relevant and timely – embrace the technology to help you
- Be aware of the actual cost of acquiring and servicing a ‘loyal’ customer
- Quantify the benefits and explore all opportunities for achieving returns from introducing CRM
- Develop a customer-centric culture in your business
- Use expert assistance
About the author
Michael Collins is Managing Consultant at Database Marketing Counsel, the specialist data strategy and CRM consultancy he founded in London in 1991. He is a Chartered Marketer and a Fellow of the Institute of Direct and Digital Marketing and has taught database marketing and CRM at several UK university business schools.
He has more than 30 years’ consultancy experience in helping sales and marketing management in organisations in the UK, Europe and North America achieve their business objectives in a smarter way, providing direction on customer insight and building customer relationships in most B2C and B2B sectors.
Michael Collins
Managing Consultant at Database Marketing Counsel
1 May 2018 | PPC91
Source: PPC91