Last month, I introduced the concept of contact optimization. This involves expanding marketing horizons beyond simply managing the mailbox to include communication strategies that optimize customer experience across all interaction points. Customer behavior and preference, combined with sophisticated predictive analytics, are used to drive all communication decisions, including what to talk about, when to initiate the conversation and where the communication happens. The goal of contact optimization is to pinpoint the most important message to talk to the customer about at a particular point in time, and to create an environment where customer communications move from nuisance to expected and the customers actually look forward to hearing from you.

In theory, optimizing customer communications sounds wonderful. Playing customer for a moment, I can certainly attest to the delight I would feel if my bank cut out the loosely targeted phone solicitations, stopped mailing the never used (and must be shredded) credit card cash advance checks, and confined their email and Internet banking alerts to real problems such as suspected fraud or double debit of a monthly bill pay. In this environment, I would welcome communications on topics in which I have expressed interest (e.g., retirement planning). I might actually read all the communications I receive rather than attempting to guess from the packaging which are worthwhile and which go straight into the circular file. Unfortunately, despite the significant benefits of contact optimization, only a handful of leading organizations are truly reaching for communication nirvana. I closed last month’s discussion with the thought that adoption rates are relatively low because the organizational and technical hurdles are fairly high. This month I’ll focus on resolving the organizational challenges.

Trading theory for reality highlights the organizational difficulty in contact optimization. Delivering only significant, timely and relevant communications also means eliminating those that do not make the cut. To meet the expectations listed above, my bank would have to prioritize contacts across functional areas. This means determining which communications are really necessary, identifying those that fall within my expressed interest areas and imposing the organizational discipline to eliminate or drastically reduce anything outside these boundaries. It also means opening the door for turf wars between marketers, branch personnel, product managers, etc. - all of whom have agendas that could be adversely impacted by the restrictions.

While this task is difficult, it is not impossible. Developing a communication matrix is a great first step. This matrix documents the organization’s communication priorities and provides a mechanism for enforcing them. To build the matrix, the range of possible communications is identified and segmented into categories. Common high-level categories include sales offers, service messages, complaint responses, regulatory notifications, retention actions and information request fulfillments. Note that complex contact optimization strategies may include many more granular subcategories as well. Next, the organization must decide how frequently it wants to allow a customer to receive each type of communication relative to all of the others. Allowable time between communications can and should vary based on the type of communication being considered. It may not be desirable to inundate a customer with a sales and service contact in the same week, or to send two sales contacts in a single month. However, a profitable customer that makes a significant withdrawal from savings and cancels multiple direct bill-pay agreements could require an immediate retention call, even if you just talked to the customer the day before. Information request fulfillments, regulatory notifications and complaint responses may receive top priority and may push out the length of time before the next nonessential communication is allowed to happen.

In many instances, the act of developing the matrix itself can help to foster the understanding, cooperation and buy-in necessary to alleviate turf wars. Gathering the right set of key stakeholders (anyone who communicates with the customers) and tallying the current contact levels can clearly highlight overcommunication problems. When you send more than 300 communications per year to your best customers, as one bank unwittingly did, the likelihood that any single message registers is small. Facilitating frank discussion on priorities, such as complaint response over sales offers, and determining time between communications is not always easy but can foster understanding and acceptance.

The matrix can also serve as the springboard for identifying and escalating very real issues. If marketing is measured on the number of customers it reaches out to per month and sales offers are restricted for most of the customer base in January due to the issuance of regulatory tax documents, there is a real conflict between the contact optimization strategy and the marketing performance objectives. Conflicts like these must be resolved in order to effectively implement optimization.

Implementing contact optimization can benefit both the customer and the organization. It can also have the unintended benefit of identifying organizational conflicts and providing a process for working to resolution. Next month, I will look at some of the technical challenges to implementing this strategy and highlight the capabilities that should be present in a robust contact optimization software application.

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