Many companies are realigning their marketing strategies to accommodate more sophisticated and discerning customer profiles. But as marketers use data mart technology to track and analyze detailed customer information, they are recognizing that they can use this information to guide more proactive communication with customers.

Recognizing that customers are a company's greatest asset, convergent marketing provides a methodology for businesses to integrate the customer into the overall fabric of the organization. By adding the convergent marketing methodology to its data mart technology, a company can realize the full potential not only of its database marketing programs but also of the company's overall strategic planning efforts.

A customer-centric approach to marketing starts with the technology and analytical capabilities of a data mart. Understanding the need to replace reactive marketing with proactive marketing strategies, marketers are using data marts to segment and profile their customers. They then constantly add information to those profiles, using the information to deliver value to customers in the most effective ways and at all levels within the company--product development, product management, operations, warehousing, service channels, marketing and, of course, sales.

Each of these functions within the company needs to deliver value to the customer and do so in a comprehensive and related effort. This coordinated effort is achieved through convergent marketing, enabling a company to recognize both the current and potential value of each customer, how best to allocate resources in order to increase customer value and how to retain valuable customers longer while managing attrition of non-profitable customers.

To make convergent marketing work, a company must understand and execute the six guiding principles:

  1. Understand who your customers are and what they value.
    Keeping customers loyal and profitable requires an understanding of what products and what levels of service are important from the customers' perspectives. This can only be accomplished through a two-way dialog and comprehensive contact management. You can perform detailed customer profiling based on demographics and behavior and then define unique customer groups through segmentation. This enables you to define the different ways your customers want to do business while comparing the profitability offered by each of these customer segments.
  2. Select customers carefully and increase their value.
    Customer acquisition in and of itself will not deliver value. Companies must learn which customers have the potential to be the most profitable and most loyal and then design their marketing strategies to acquire and keep only those earning high marks. Most profitable customers are those who respond to cross-sell and up-sell opportunities. The company may need to offer different products or services to the customers whose profiles are less profitable or sell to them through a different service channel. Ultimately, acquiring customers who cannot or will not deliver value for the organization is a "no win" proposition.
  3. Offer products and services that deliver the desired value.
    Organizations must offer products and services that deliver extraordinary value to the customers they wish to keep. By setting up a framework for Total Campaign Management, you can identify and establish processes and database structures to track and measure all promotional and campaign activity. Then, by analyzing long-term promotion and response trends, you can better identify the right level and frequency for each type of promotional offer.
  4. Design effective sales and service channels.
    Not all customers are created equal. In order to deliver effective value, an organization must have flexible and convenient sales and service channels that match their customers' needs. By analyzing the sales and service channels to which customers best respond, you can better match these channels to the various customer segments. Remember that the sales or service channel customers use as the first vehicle for contacting you is not necessarily the channel they prefer.
  5. Equip and train employees to deliver and increase customer value.
    All employees, especially front-line staff, must have both the training and the tools to deliver customer value. This means that systems must be in place to give employees two pieces of critical information: what each customer is worth, and what products and services will further increase customer value. For example, a company could offer its telemarketing staff more specialized and sophisticated scripts to facilitate up-selling and cross-selling opportunities based on the loyalty or profitability value assigned to the customer who has been targeted. More importantly, make sure that employees know how to foster and increase customer loyalty and what really constitutes value and reward" in the customers' eyes. By taking information to the point of contact to create value for your customer, you can truly market to one customer at a time.
  6. Refine and measure the value proposition to ensure customer loyalty and retention.
    If true value is delivered to carefully selected customers, they will be loyal. However, no organization can assume that what worked yesterday is still working today. Two-way dialog with customers, in conjunction with rigorous ongoing tracking and measurement of what is and is not working, is necessary to ensure continued success. Measuring your progress can include performance and trend reporting, customer retention and defection measuring, and marketing database auditing. Your success should also be measured according to customer satisfaction. (Even though you're retaining a customer, it doesn't necessarily mean they're totally satisfied.) To understand, you need to ask the right questions based on the customer segment, the value they deliver and their preferred service channel(s). By identifying customers' real value potential, you can move them up the value scale, and you can develop loyalty programs that offer a combination of reward and recognition based on each customer segment.

Executing convergent marketing is not an overnight process--it takes time. An organization must address structural, cultural and technological changes to realize the full promise of convergent marketing. Truly integrating convergent marketing into the fabric of your organization means coordinating all customer contact according to each of the defined customer types and values. By understanding your customers, you can develop a strategic plan according to the principles of convergent marketing and develop realistic and measurable goals.

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