Omnichannel Technology Strategies Deepen and Lengthen the Customer Lifecycle
Maintaining customers in today’s competitive environment requires an omnichannel approach.
Heavy equipment that lasts for years under brutal conditions. Customers don’t return for new purchases every week, but Caterpillar is finding ways to engage them regularly even when a new purchase isn’t on the line.
Using Internet of Things (IoT) technologies like WiFi-connected sensors, Caterpillar tracks how customers use their equipment, correlating it with service and replacement-interval data. The data is then analyzed for insights around optimal service schedules, and Caterpillar can package those insights into a subscription-based service to help customers maximize value and troubleshoot equipment anomalies.
For example, armed with this data, Caterpillar helped one of its marine clients determine the right hull cleaning interval for its tanker ships — a service Caterpillar does not provide. By determining the most economical interval, Caterpillar helped the company save millions annually. That kind of omnichannel activity breeds loyalty and retains customers for future purchases.
James Stascavage, intelligence technology manager at Caterpillar Marine, explains, “Often, when people analyze data, they look for the ‘grand slam’ — one thing that will save them tens or hundreds of thousands of dollars. In reality, small improvements add up to big dollar savings across many vessels.” The same concept holds true on terra firma.
Many companies look for the “big break” that will earn droves of customers. The reality is that customer loyalty comes by connecting with customers on multiple levels and, often, by providing value across the customer lifecycle, over the course of many months and years. Failure to build and maintain those relationships means losing customers — and modern customers don’t look back.
The impact of an omnichannel approach
When customers engage with a retailer across 10+ channels, 47 percent make a purchase from that retailer at least once weekly. Comparatively, only 21 percent of customers make a purchase once weekly when they engage through four channels. These statistics refer to retail, where purchases are often smaller and more frequent, but the principle holds true across industries.
The reality is that competition for customer attention continues to rise, and businesses must work to earn and maintain interest. More customer touchpoints mean more opportunities to develop stronger relationships. To engage effectively across multiple touchpoints, companies need to develop an omnichannel strategy — and they need to think through the entire customer lifecycle if they want that life cycle to extend beyond one sale.
Omnichannel marketing technologies
So let’s talk about what technologies a company needs to develop, deploy, maintain, and harness the power of their omnichannel strategy. The biggest challenge for marketers often isn’t the technology; rather, it’s how to knit those technologies together to create fluid experiences throughout customer lifecycles. So let’s discuss them through the lens of each stage of the customer journey: discovery, explore, decision, and retention.
The first stage of the journey involves meeting one another. At this stage, customers are anonymous. You have limited demographic or preference information, so your technology needs to capture that information. An analytics platform is critical here for spotting patterns and making connections, aggregating data from disparate visits and for feeding that information to other data management platform.
Starting with your high traffic pages, test your content, layout, and approach to tease out what works best using simple A/B testing techniques. By implementing just such a testing process, Adobe raised click-through rates by 75 percent. Lenovo boosted click-through rates by 495 percent simply by testing the ideal placement of its PC Finder tool.
Take advantage of this early stage to collect as much data as possible — behavioral, firmographic, demographic. Data is the foundation for future marketing efforts and omnichannel strategies — even if the information is temporarily attached to a cookie instead of a person. Data like geolocation and usage patterns can lead to connections crossing platforms and channels, as can links between channels — like a link from social sites to your website or vice versa. The connections link different aspects of a customer’s profile, building a more complete picture even before you have demographic or personally identifying information. Once the visitor self-identifies, all of this connected data can be linked to a known individual or account retroactively.
To keep the experience smooth and seamless across visits and channels, use a content management system that assembles all of your digital assets for all channels. This is the cornerstone for delivering personalized omnichannel customer experiences because it synchronizes and streamlines your customer relationship across touchpoints.
The second stage of the customer journey — explore — is the getting-to-know-you phase where you help customers understand your brand and what it offers while building a profile about the customer, enabling you to better personalize and meet their expectations. This stage is still handled largely by your data management platform and in connection with your content management system. The teams running the content management system should have robust analytics available, enabling them to match the right content to the right person and establish your brand as a trustworthy information source — no matter what device customers use to interact.
Companies with freemium business models and those that provide trial offerings have an advantage here because they have an opportunity to capture prospect information during registration that they can use to scale their customer base. This puts the product into customers’ hands at no or low cost to them while allowing businesses to capture crucial customer information, which can be supplemented with demographic information, preferences, and usage patterns. For other industries, free and trial offerings may not be an option, but retailers can extrapolate some of this information by comparing purchase information with return information. Customers approve of products they keep, and that information can be used to guide future recommendations for them and similar customers.
For example, by leveraging the data gained regarding purchases and, in turn, returns, brands can better understand what similar customers are more likely to return and so alter recommendations to avoid those products. This look-alike modeling can mean big customer-experience wins as brands optimize their offerings based on predicted potential and existing customers’ tastes and needs.
Via strategies such as look-alike modeling, during this stage information offers brands the ability to build robust customer profiles, complete with information critical for personalization. These profiles can then be shared across the marketing ecosystem such that messaging can be targeted and consistent across channels to both existing and prospective customers. In the case of trials, look-alike modeling also tells you who your most valuable prospects are. As a result, brands will shift media spend into social channels, where they can very accurately target prospective audiences in an environment where uptake of subscriptions offers is high.
The third stage, the decision, is the make-or-break point where the customer decides whether and where to purchase. At the decision point, the fluidity of your ecosystem is critical. You want customers to have an effortless purchase experience whether they’re online, on mobile, on the phone, or in a brick-and-mortar store, but more and more is happening on mobile. According to Criteo, mobile phones represented 46 percent of e-commerce traffic in Q2 2016 but accounted for just 27 percent of purchases. In many cases, mobile development focused on content delivery and left the checkout process behind.
For a successful omnichannel strategy, your channels need to work together at this critical point. When customers have problems with your mobile platform, reach out to offer a solution, deliver a personalized message, and provide a link inviting them back. Be sure to optimize your website for both desktop and mobile. Look for ways to streamline and improve the omnichannel journey.
Artificial intelligence (AI) and predictive analytics can help determine who is ready to purchase and the usage patterns that indicate conversion-readiness. Using these insights, you can reach out and give a nudge when customers hesitate at the purchase point. Amazon does this when it emails about the items left in shopping carts. Marriott does the same by sending an email to follow up after a customer researches a hotel without booking. Sometimes people change their minds, but often they just get distracted or want to think about it and then forget to purchase. A relevant prompt through another channel can get them back on track.
The final stage comes after the purchase decision and involves your efforts to keep the customer around for future purchases. The cost of acquiring new customers versus retaining existing ones varies by industry and a host of other factors, but most sources say that acquisition costs between 4 and 10 times more than retention. Research indicates that a mere 5 percent increase in retention can boost profit by 25 to 95 percent.
Traditionally, however, things seem to happen a little backwards when it comes to retention. In high tech, for instance, marketers put only 20 percent of their effort into retention with the other 80 percent focused on early stages of the customer journey. Don’t do that. When a customer purchases from you, that customer just voted for your company in the only way that matters — with his or her dollars.
For a moment, at least, that customer is a fan. Capitalize on that by sticking with the customer into the retention stage. Provide support, reach out and ask for reviews or offer additional content or upgrades. Most importantly, find ways to add value to the customer and relationship. Seize the chance to secure that customer for the long term. If the lead goes cold, you’ll have to start over when the customer is ready to purchase again.
A great new technology for this is the Internet of Things (IoT). Consider smart home technologies, which do everything from providing added home security and increasing energy efficiency to setting the temperature of a room to your personal liking. Connected devices are the ultimate enabler of personalization, allowing brands to provide better customer service that may endear them long term to the people who initially purchase their products.
For this purpose, IoT and AI work wonders together. The data from IoT fuels AI to make powerful recommendations — from maintenance or usage to data on how to update and improve durability, functionality, and utility.
Caterpillar couples the power of AI and IoT in hundreds of product sensors out in the field. The company collects data about when the clutch goes out or when it’s time to service the engine and AI analyzes the data. Then, the brand can say to its clients, “You have 100 of our trucks. We can give you data that will help you predict when they need to be serviced.” And the client says, “Yes, that sounds good.” So now Caterpillar has data coming from IoT that it sells as a prescription service. That’s a value add to a customer, and it’s a new stream of revenue to Caterpillar.
This is a different slant on IoT and AI-powered analytics than we commonly hear about, but it proves that new technologies are broadening our ability to make lives easier. By harnessing those technologies in an omnichannel strategy throughout the customer lifecycle, companies can make customer relationships ‘easier,’ and easier relationships are more likely to last.
The future of technology
For many companies, legacy systems don’t meet current technology needs. Thankfully, the new technologies that meet these needs are getting easier to use and more sophisticated. Data management platforms, analytics engines, and content management systems are increasingly intuitive and functional.
New technologies like AI and IoT are enabling new ways for brands to leverage existing technologies, converting usage into data and teasing out insights to identify and predict customer needs. Incorporating these technologies is no longer the hurdle it once was — but failure to make the change takes companies closer to obsolescence.
By embracing an omnichannel strategy that increases the consistency and relevancy of touchpoints across the customer lifecycle, companies build loyalty and earn repeat business. By keeping the customers you have, you avoid the cost of reacquisition. This translates to bottom-line improvements, and it comes by way of customer-experience improvements, a win for you and for your customers.
Invest in the right technologies and platforms to deliver fluid and relevant customer experiences across the customer lifecycle, no matter what device customers do or will use to engage.