Milan Schnorrer, 21.12.2016

Failure of quiet companies‬‬‬‬

Are you quiet, spamming or directly communicating with your customers?

Direct communication is the most effective marketing tool right after the "Word of Mouth". It can bring up to 10% of extra sales, however some companies either do not directly communicate with their customers at all or they consider direct communication as "appendix" of marketing and flood their customers with spam.

There are 4 types of companies. What is your approach to direct communication? Are you a quiet company and deliberately neglect it? Are you lost in this topic and have not begun to communicate at all? Do you send weekly newsletter and overload customers with spam or do you communicate emotionally, focus on the needs of your customers and adapting communication to different segments? ‬‬‬‬

 

The principle of "empty audience"‬‬‬‬

Imagine if you run a marathon and over the entire run including the finish line, there would not be a single spectator. The feeling from such a run would not be a good experience for you. If you would find yourself in a crisis and no one would encourage you, maybe you would not even finish the run.

In every sport, audience is a very strong factor in achieving the success and therefore it is a huge advantage if hockey or soccer team plays in front of domestic audience. In critical moments, they will support you.

Customers are like athletes. If you do not communicate with them and not applaud them, they will gradually stop buying or you will lose them completely. It is striking that there are so many companies that have created customer databases and loyalty programs and still do not communicate with their customers. I have seen these four types of companies:‬‬‬‬

 

1. QUIET COMPANIES

They deliberately run so-called "quiet" loyalty program.

This is the least logical approach. The company decides to build a loyalty program, makes significant effort to create customer database, invests large resources to reward customers and deliberately does not communicate with its database members. Why do the companies choose this aproach?

Top management often imagines direct communication as hardselling product newsletter or supermarket flyer in the mailbox. It is logical that the character of this kind of communication is not suited for their product, especially if they are selling premium products. They are surely realizing that their product is not sold this way. Unfortunately, they think that every newsletter has to look like supermarket flyer. This is not true - even the most prestigious art galleries try to communicate with their visitors directly and do it pleasantly. Direct communication can be very sensitive, premium and can be a great extension of the product itself.

Companies that have decided to be quiet, have abandoned the possibility to actively work on the relationship with their customers. Managers thus missed an opportunity to get 10% extra turnover and in addition made the company very vulnerable. Product age faster than relationships with customers. Products change, but the relationship lasts much longer. Being quiet and not communicating is not a strategy, it is a failure.‬‬‬

 

2.LOST

They do not know that they are not communicating with customers. It was not their priority until now.‬

These are mainly companies that have undergone a period of growth, built up its business network, learned to sell. At some point they find out that building new stores is not enough to sustain growth. They increasingly start to realize that they want to sell products to their customers in the long term, or more.

Those companies feel lost in the field of direct communication. They do not know that it can bring additional revenue and have no idea how or where to start. These companies should carry out so-called frequency segmentation first, divide customers according to their degree of loyalty and then launch a targeted communication. Great advantage of these companies is that they have immediate opportunity for positive change.‬‬‬‬

 

3.SPAMMERS

They realize that direct communication is necessary, but they run a system of sending disturbing weekly newsletter.

Positive of these companies is that they accept the need for direct communication, but its character can be mostly likened to spam. Once a week, e-commerce manager decides to send out product information to the whole database. During marketing meeting following scenario often develops: "We have to inform about this sale by following channels ... and let's throw it into newsletter. It cost nothing at all."

This approach is similarly negative as approach of quiet companies. Poor communication costs companies too much. It is the "opportunity cost" of sales and in the worst case - loss of customer. Reckless spamming of customers harms the relationship even more than no communication.‬‬‬

 

4.DIRECT CHAMPIONS

Direct communication is considered as a part of the customer experience and building a relationship is important to them.

We are talking roughly about 10% of companies which understand that the customer experience at high level cannot be built without direct communication. Customer experience became priority nowdays after a period of constructing simple loyalty programs and CRM systems. Good customer experience involves emotion, increases comfort and services and gives customers the feeling that they are receiving the best offer.

Really excellent customer exprience does not exist without carefully planned direct communication. If you are one of the companies that carry out direct communication sensitively, measure its financial results and use the communication service itself to improve the core, you are on the right way to build a long-term sustainable market position.‬‬‬‬

Active athletes know very well what a great boost can come from audience. Organizers of sport events know it as well and therefore they always try their best to ensure great audience response. It is very similar with customers. They require direct communication. Do not leave your customer without supporting audience. "Clap" to your customers in every proper situation and they will reward you for it!‬‬‬

Milan Schnorrer

Author is partner and founder of Pricewise

He specialises in direct marketing communication and customer data analysis. More information on the author

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