Don’t forget about me

Editor's note: Terry Vavra and Douglas Pruden are partners at Customer Experience Partners.

One of the key tenets of strategic marketing is the understanding that organizations survive and stay profitable primarily by anticipating and adapting to change. (Alderson, 1957) Sometimes change can be as minor as a competitor’s aggressive actions. Other times change can manifest itself in far more dramatic scenarios. Marketing textbooks are full of descriptions of the failed destinies of organizations that didn’t anticipate or creatively respond to disruptive conditions – breakthrough technologies, geopolitical events or societal trends, to name just a few. 

This academic perspective of strategic marketing is particularly relevant given our current world situation. COVID-19 is cleaving its way through the national economies of the world. The resulting business landscape will be totally new territory. Consequences of the virus’s intrusion on the U.S.’s free enterprise economy will range from mandated but relatively easy modifications to office and factory staffing and to customer contact and delivery methods to effects that will challenge to the very existence of other categories. Arguably COVID-19’s broader impact will alter how commerce, in general, is conducted in the future. One component of the strategic marketer’s toolkit which will no doubt fall an early and substantial victim to the virus is establishing and maintaining relationships with customers – the essence of relationship marketing. Traditional relationship-building activities will either be curtailed by customers’ unwillingness to participate or by federal, state and municipal actions, enacted to help control the virus’s spread, that may restrict the activities.

Connecting on a personal level 

Relationship marketing relies on building and maintaining personal interactions with prized customers. It’s recognition of the importance of connecting on a personal level with one’s supporters, customers or constituency. Emphasizing the personal aspects of a business transaction strengthens the relationship with a vendor or supplier through “emotional glue.” But how can the business community maintain close ties while respecting interaction protocols suggested by our Centers for Disease Control?

Danny Wegman, CEO of Wegmans Markets, an Eastern U.S. regional supermarket chain of 101 stores, lamented the current situation his stores face: “A huge part of our business has been treating our customers really as guests and entertaining them. We can’t do that anymore. We lost our mojo. We have to replace it!” (Wall Street Journal, 2020)

The practice of effective marketing in the current day has only recently accepted the value of allocating effort not just to acquiring customers but also to maintaining current, valued customers (see sidebar). Now the pandemic threatens to derail or substantially alter this philosophy.

The tools of relationship marketing have been conceived to produce several emotional outcomes among customers, all with the intent of strengthening the customer’s affiliation with a brand, company or organization. These outcomes are:

• Recognition/reward – the feeling that a brand or company appreciates the customer’s business.
• Intimacy/trust – comfort in sharing personal information with a company and the trust that the company carefully guards what it has learned about the customer.
• Relevancy/value – understanding the value of a long-term relationship with a company by the timeliness and relevance of outreaches by the company.
• Sincerity/genuineness – although the relationship is business-driven, the customer should sense a genuine commitment from the company.
• Empathy – in a true relationship the participants understand a great deal about one another. The customer should feel the company is in tune with her/him.

The net-net of these end results is to create/strengthen a customer’s reliance on a supplier, thus increasing loyalty. They’re not something that advertising or verbal promises can accomplish; they only occur through real, experienced, genuine interactions over time.

Alter current activities

Considering the many restrictions instituted to control the pandemic, we think it is imperative to consider how COVID-19 will force marketers to alter many – if not most – of their current relationship-marketing activities. As Bain & Co. has observed, “This crisis may be transforming [industries] for good but it could also be a transformation for the good!” 

Creative, out-of-the-box thinking will be required to help us transform for the good. In this review we surely won’t succeed in identifying all the challenges. But perhaps this discussion will stimulate your thinking about how to maintain customer relationship-building activities in the future for your business and your category.

Customer bases. Without the retail channel providing pre-sale information and post-sale support, manufacturers and service providers will be forced to rely more on their own communications as an alternative. What they’ll need to do is up their game with smarter, more highly customized communications. This will require investing in the sophistication and learning abilities of their existing customer bases.

Some organizations are already touting the value of using AI to make databases more relevant and personal. And there are numerous software developers who’ve created rather large relationship marketing applications. We’re not fans of one-size-fits-all panaceas. We believe that many corporate IT staffs have the specialized knowledge about their corporation’s customers and products to allow them to fashion highly customized and productive database applications. Investing in the continuing evolution of their customer base capabilities will undoubtedly become a top priority for all businesses who wish to adapt their relationship marketing tactics to the new normal.

Sharing of personal data. Effective relationship programs are highly dependent on sophisticated, “learning” databases. To establish such databases, businesses need volunteered information from their customers and permission to collect information through observation; this requires customers’ unquestioning trust. It’s uncertain how the pandemic will impact customers’ willingness to confide in and share information with their marketers/vendors of choice. There are two possibilities. Perhaps, recognizing their greater dependence on what companies know about them – to serve them better – customers will be more forthcoming in providing their personal information. On the other hand, shelter-in-place and the isolation it has imposed may have made customers more distrustful of the environment and of authority and therefore less willing to share information. Only time will tell. In the meantime, any continuing dialogues that can be maintained may help to perpetuate the pre-pandemic level of trust.

The EU’s GDPR and California’s Consumer Privacy Act both attempt to place very real constraints on how information is collected from consumers, how it is used and the responsibilities of ownership of the information. While proper in their intent, these regulations will tend to increase the general overhead costs of creating and maintaining customer files.

Experiential marketing. An entire discipline has been formulated under the name of experiential marketing. Customer blueprinting or journey maps are some of the earliest tools offered by this perspective. By graphically (and verbally) enumerating the multitude of touchpoints a customer encounters in conducting business with an organization, these constructs direct and guide opportunities for improvement. We’ve argued for some time, that the contribution of the experience enhances a customer’s relationship with a supplier. Nowhere is this more true than in retailing, where the in-store experience makes brands “whole.” It allows customers to feel, to hold, to interact with products whose descriptions are readily available in online, television and print media.

As the pandemic hammers already-reeling brick-and-mortar retailing, online efforts will become much more favored and therefore important. And marketers will need to create new experiences to showcase their products and services. While augmented reality (offered by online sites) promises to simulate some of the ambiance of in-showroom shopping, it’s still not a satisfactory analog for the physical experience.

Customer reviews. With limited or altered opportunities to experience products in a retail setting, online customer reviews and social media posts will become an even more important influencer of customers’ purchase decisions. The increased importance of word of mouth signals the opportunity to leverage everyday advocates (those customers who are so satisfied and enthusiastic about one’s products/services that they readily speak to others about their satisfaction). These brand ambassadors can fill, to some extent, the role previously played by in-store retailing. This all suggests manufacturers will need to rethink how they monitor and respond to customer feedback. 

Customer dialoguing. Without their retailer networks to bear a substantial amount of problem resolution, manufacturers and service providers will need to improve their customer service channels. This will mean being more accessible to customers, devoting more staff to customer service efforts and becoming far more timely in responding to customers’ questions and problems. These needs require allocating a much higher priority to customer service, creating enhanced servicing processes, hiring more capable customer service reps and providing better training for service staffs. 

Customer events. State and federal enactments of shelter-in-place can’t help but have a profound long-term effect on customers’ lives and future behaviors. As a result, consumers will likely become somewhat crowd-averse. And authorities may continue to prohibit or discourage large-scale gatherings for some time to come. (There are some in the consumer population who have already rebelled against these restrictions; these individuals may be zealously supportive of a return to normal activities. However, their perspective is not supported throughout all segments of the population.)

The combined influence of government-imposed restrictions on congested gatherings and consumers’ acquired hesitancy to join large gatherings will severely challenge how we stage and execute customer-appreciation events. They suggest putting a hold on any event that encourages a large gathering of customers. Some such events can be reformulated as virtual events but this will call for lots of ingenuity and creativity. And virtual events lack the person-to-person interaction which for so long has been critical in establishing customer relationships. New and creative ways will need to be conceived of to make customers feel both special and recognized.

Affinity merchandise. We’ve long believed that merchandise with a company’s name emblazoned on it is a good way to forge the bond between a customer and company. When properly executed, this tactic can not only make the bond tangible but can also strengthen and further solidify it. The merchandise, in use, provides a signal that can ignite conversations about the sponsoring brand. There are two problems with the current execution of affinity merchandise. One, many such items are very personal, requiring close contact to be seen by others. And, two, currently so much affinity merchandise is sourced from other countries – possibly carrying a stigma. These concerns suggest corporate logoed merchandise will have to be rethought.

Corporate merchandise serves the unique role of showing friends and acquaintances of our customers that they affiliate with us. However, social distancing will mitigate the effectiveness of merchandise that’s so small or personal as to be hard to see when we keep a respectful distance between us. This means brand affinity items that can be recognized at a distance will likely become the new preferred choices for logoed merchandise. T-shirts or ball caps will be more acceptable, popular and more effective than desk calculators or lapel pins. As to the sourcing of merchandise, customers may be less welcoming of a calculator from another country with a company logo affixed to it. This suggests that sourcing of corporate-logoed merchandise will suddenly become important. Domestically produced items may be more welcomed than products from offshore.

Merchandise return policies. We’ve talked about good return policies being a critical part of the customer experience and in many cases being an opportunity for retailers to intensify customers’ loyalty. Even as the pandemic subsides, we can’t help but question if customers will be comfortable doing business with a retailer they know welcomes merchandise returns. Such policies would cause customers to fear receiving merchandise possibly contaminated by a previous customer who returned the item.

This likely concern suggests that astute manufacturers may have to offer a refurbishing/sanitation program for products that are returned to retailers. Such a service would allow retailers to turn in returned products for reconditioned/sanitized products that are shipped back to the retailer in new, factory-sealed boxes.

Seismic shift

Despite all the talk and all the writing about online sales, in most categories they are fast growing but still a small percentage of total sales. It’s hard to imagine anything other than the pandemic tipping the sca les even more. The result? A likely seismic shift of how all business will be conducted in the future. The pre-pandemic retail outlet as we knew it will likely cease to exist. Retail presence may be necessary only as a location from which to pick up and drop off merchandise.

Beyond these admittedly trivial concerns (in the face of a high death toll and previously unexperienced conflicts with our cavalier social behavior) this pandemic will leave deep scars behind. Personal interactions will probably be hit the hardest. But we can’t be certain of the impact. Will we become kinder to one another or, without as much personal interaction will we become even faster to insult and devalue one another? Ultimately, our development and practice of future relationship marketing tactics will be forever changed.

One constant, we believe, is that good and valued customers will continue to wish to be recognized. And, in this very unusual time, businesses that customers can trust will be even more valued. We look forward to how marketing ingenuity will confront these challenges and to the new model of business that will evolve from these trying times. 

Elements of relationship marketing

The opportunity for building customer relationships in the COVID-19 environment will vary from brand to brand depending upon the nature of the business, the tenure and strength of relationships and the frequency and type of interactions. There are no cookie-cutter answers. However, in our book, Aftermarketing, we proposed seven tactics which we believed to be the most important activities for building and maintaining customer relationships. We’ve updated the list and present the current elements here as a starting point for the planning of relationship building strategies and tactics in the new normal.

Employing the power of customer intelligence. Customer intelligence incorporates the entire act of creating, using and maintaining a customer database. Essential is the ability of the database to dynamically trace customers’ purchases (and non-purchase interactions as well) and integrate that information in a learning phase. A strong database would include basic demographics, psychographics and extensive purchase histories. The database is the foundation for customer-scoring. While always our concern, the new spate of customer privacy laws mandate that businesses acquire customers’ permission to collect information and establish ground rules for the use, maintenance and destruction of the information.

Mapping and understanding our customers’ journeys. This practice is a way of visualizing and quantifying the customer experience. It helps us to identify and rank all salient touchpoints customers encounter in transacting (or attempting to transact) with a business. Viewing the business as a customer experiences it enables management to better respond to customers’ needs and perceptions.

Analyzing and responding to customer-initiated feedback. This is the passive side of dialoguing with customers. (We consider it passive because the business has not initiated the dialogue.) This tactic includes analyzing and responding to customers’ outreach direct to the firm. In addition, it includes monitoring and analyzing customers’ voices as they reach out to the masses through personal interactions and through online social media. If properly executed, it will include both quantifying themes on an aggregate basis and listening to and solving problems on an individual-customer basis.

Monitoring CSAT. We think of this as the brand-initiated, active side of customer dialoguing. Because not all customers will report a problem, disappointment or a success, it is imperative to routinely reach out and sample a firm’s customer base to take a pulse check on customers. Once this conversation has been initiated by the company it is important to close the loop, getting back in touch with those with concerns or problems on a one-to-one basis, thanking those who respond and when possible reporting on findings and actions to be taken to all customers.

Maintain effective formal communication programs. Good communication programs, issued across different media platforms, serve as a company’s formal mode of communicating with its customers. Customers (who have permissioned contact) look forward to the communications and to being treated as insiders who know more about the company’s products and future products than the average consumer. Good communications programs can help develop super users, who can act as advocates and will likely place positive product reviews in the media. 

Hosting customer events. Invitations to special events (targeted to the most behaviorally loyal and the highest value current/highest potential customers) are a very demonstrable way to show customers appreciation for their business. Participation in these activities can enhance customers’ willingness to personally identify with a brand or company. Hosted events, like factory visits, introductions of new products, etc., feed the egos of customers, creating stronger bonds between them and the sponsoring company.

References

Alderson, Wroe (1957). Marketing Behavior and Executive Action – A Functionalist Approach to Marketing Theory. Homewood, Ill. Richard D. Irwin.

Vavra, Terry G. (1992, 1996). Aftermarketing: How to Keep Customers for Life Through Relationship Marketing. Chicago. Irwin Professional Publishing.

Wall Street Journal. May 30, 2020. “Wegmans pampered its shoppers. Now it has to protect them.”