Topic: Customer Experience
Have you ever wondered why people adopt preference management? Who first had the idea that the customer might have good feedback? What made this trend of listening to customers grow to where it is today?
There are five distinct reasons that companies adopt preference management. These specific Key Performance Indicators are the ultimate driver for implementation, yes. But they also help justify continuing the system once you start. Most people agree that all five of these KPIs are important. Even so, one in particular is usually the deciding factor to start collecting customer preferences. That “most important” factor may change for each company. But since we consider them all to be important, we’ll discuss them in this five-part series.
These KPIs fall into one of five categories – this series of blogs will discuss them in more depth.
KPI #2 – Reducing costs
Now more than ever, marketers are required to maximize the money they are spending on their budget. The allocation of that marketing spend can be based on communication preferences. In fact, it can play a vital role in helping identify the best places to use your budget. Customer input helps marketers drop ineffective campaigns. Wouldn’t you love to know which of your marketing programs aren’t working at all? And identify any campaigns that need improvement? Your customers’ feedback can point you in the right direction. Sometimes it’s even the fastest and easiest way to evaluate a campaign. If a program isn’t working well or at all, you can save that money and put it towards processes that do. Your budget will love you!
Since so much marketing budget goes toward third parties, it’s important to understand current customer touch-points. How are your customers being reached? Who is contacting your customers on your behalf? Are you using an email service provider (ESP)? How about an outside call center? It’s important to determine the cost for sending communications across different channels.
One option to reduce costs is to incentivize your customers to use a less expensive communication method. For example, direct mail is more expensive than email. If you’re currently using direct mail, encourage and incentivize customers to switch. Banks and utilities use this practice all the time by offering paperless billing and statements.
You have to be careful about compliance, however. Stay on top of current compliance language to assure consent. This also helps keep the company free from potential litigation and government scrutiny. This is especially important as communications are switched to more governed modes. For example, texting customers and contacts on mobile devices is highly regulated. Be careful and make sure you’re compliant with regulations.
But good news! It’s easy to measure how much money you save with this method. You can justify the investment of your preference management by seeing how many customers moved to email over direct mail! For example, let’s say the average cost of a direct mail piece is $1.50. You have to account for supplies, design, production and postage. The average cost of sending the same communication via email is $.10, through your ESP. The savings add up very fast, especially for companies that send millions of communications.
To look at a different example: maybe you’re using an outside call center. This could be for new customer outreach, as a support call center, or something else. But collect some customer feedback and see if they’d rather be contacted over email, or maybe use a live chat option for support. The ability to reduce the costs of a call center also provides measurable budget savings.
It is also wise to use pilot programs for this KPI when measuring interest in one communication channel over another. We’ve spoken about this “phased approach” method before. Sometimes it’s easier to test a new communication method with one department before rolling it out to the whole company.
We know your company probably has several reasons for wanting a preference management process. No matter what your primary reason is, we know that sometimes different business units within a company consider a different reason to be the main reason. Not everyone agrees on one specific KPI as being the most important. In this blog series, we’ll continue discussing the other KPIs as important factors in the decision to install a preference management tool.
Don’t miss the first part in this series: