Managing the Customer Lifecycle

Customer Acquisition

Instructor: Dr. Hassan Younis

Customer-Supplier Relationships Management
LOGS323
Lecture 14
 Business to Consumer Prospecting
Sales Promotion

§ Sales promotion is any behavior-triggering temporary incentive aimed at

prospects, customers, channel partners or salespeople.
§ Sales promotion forms include the following examples:
§ Sampling: is the provision of a free sample of the product which can be
mailed or dropped door-to-door, bound or packed with a related item, or
delivered in response to a customer request. It can be costly as it may
require special packaging
§ Free trial. Some companies offer products to customers If they like the
product they keep it and pay. Auto dealers offer test drives to prospective
purchasers. Some bedding retailer offers beds on a free trial basis to
customers for one month
§ Discounts or money-off deals are temporary price reductions. This reduces
perceived risk and improves value for a first-time purchaser. Discounts can
be promoted on-pack, at point-of-sale or in the media.
 Sales Promotion
§ Coupons: These act like money. They are redeemable on purchase,
generally at the point- of-sale.
§ Bonus packs. A promotion in which the customer gets more
volume at an unchanged price. A customer might get 2.5 liters of
juice for the price of a 2-litre pack.
§ Banded packs: offers two, or rarely three, products banded
together at a bundled price. A customer might be offered a
banded pack of shaving gel and after-shave balm.
§ Free premiums. A gift to the customer. The gift may be offered at
the point-of-purchase, in packaging, or require the customer to
mail, email, text or phone in a request.
§ Cross-promotions. These occur when two or more non-
competing brands create a mutual promotion. Water and Coca
Cola
 Sales Promotion
§ Lotteries: A lottery is a game of chance, not involving skill.
Consumers are invited to purchase the product and be entered
into a draw for a prize.

§ Word-of-mouth is interpersonal communication about a product

or organization in which the receiver assumes the communicator
to be independent of commercial influence.

§ Brands such as Body Shop, Amazon.com,YouTube.com and Krispy

Kreme owe much of their success to WOM.
§ Marketers can promote WOM by identifying and sponsoring
opinion formers such as radio show hosts or bloggers
 Social media
§ Internet-based applications that allow the creation and
exchange of user-generated content.
§ There are a host of social media platforms aimed at
individual consumers – Facebook, Twitter, and YouTube
§ Companies can develop a page or create a channel that
prospective customers can visit.
§ Engaging, interactive content may motivate visitors to
spend time on the page, eventually leading to trial
purchase.
§ Companies can also use social media as an advertising
medium. Facebook ads, for example, can be targeted by
location, age, gender and interest
§ key influencers in social media can promote a brand
message into their social networks can be extremely
powerful
 Innocent drinks

o innocent drinks is a London-based fruit juice and smoothie brand.

o innocent decided not to be on every social media platform, but to select the right
platforms for its consumer demographic and then to build a strong interactive
community, which through likes and shares would spread word-of-mouth about the
brand, encouraging friends to try innocent.
o innocent’s social media platforms include Facebook, Twitter,YouTube, Flickr, Instagram
and Pinterest.
o The brand’s Facebook page
has over 400,000 likes.
Innocent gives 10 per cent of
its profits to charity, including
the innocent foundation that
supports sustainable
agriculture projects, and
emergency relief.
 Merchandising

§ Merchandising is any behavior-

triggering stimulus or pattern of
stimuli other than personal selling that
takes place at retail or other points-
of-sale.
The Toblerone cable car concept is designed to deliver an innovative piece
§ Merchandising is designed to influence of retail theatre to appeal to Asian travelers

behavior in store or at other points-

of-sale such as restaurants, banks or
gas stations.
§ Merchandisers have available a large
number of techniques.
§ These include retail floor plans, shelf-
space positioning, special displays,
window displays and point-of-sale
print.

GALERIES LAFAYETTE
 Merchandising

§ Some forms of merchandising are

particularly useful for generating new
customers, for example money-off signs, ‘as
used by’ and ‘as advertised’ signs
§ Related item displays place two or more
related items together, for example
toppings next to ice cream or dressings
next to salads.
§ Sales of one category assist sales of the
other.
§ Eye-level positions on shelves are
generally more productive than ‘reach’ or
‘stoop’ positions.
§ If merchandisers can position new
products in these preferred positions sales
will be positively influenced.
 Other tools for B2C customer acquisition
§ B2C companies can use referral schemes, promotions
such as consumer exhibitions, publicity, telemarketing
and email to generate new customers.
§ Some companies believe that delighted or even
completely satisfied customers will naturally speak
well of the company.
§ Some companies choose to develop a Customer
Referral Scheme (CRS). CRSs are also known as
Member- Get-Member (MGM) and Recommend-A-
Friend (RAF) schemes.
§ Some automobile manufacturers invite potential
buyers as well as their delighted customers to road
shows or to dinner-and-theatre shows or dinner-and-
concert performances.
§ During the event satisfied customers usually sit
among the prospects and talk to them about their
experience.
 Product placement and product integration

§ Product placement involves arranging for

products to be shown on display or in use
in TV, movies, videogames and web-cast
productions.
§ There is no explicit promotion of the
product. It is simply seen in the production.
§ Actors may use the product or it may be $45m for a Heineken shot
used as a background prop.
§ A particular form of placement is product
integration.
§ This occurs where a product is integral to
the storyline.
§ Companies can pay considerable sums for
their products to appear in movies
The Transporter (Jason Statham)
 KPIs of Customer Acquisition Programs
1. How many customers are acquired? Prospecting costs,
advertising costs,
2. What is the cost per acquired customer? commissions to
salespeople, collateral
3. What is the value of the acquired customer materials, sales
promotion costs, credit
over the longer term? referencing, supplying
tangibles and database
costs

Business Channel Cost (£)

MGM 22
Motoring Membership Organization TV 100
Door drops 70
RAF 52
Telecoms TV 100
Adv 200
 Making the right offer

§ Companies need to consider what offer they will make to the target

§ For example banks will often use relatively high interest rates on deposit
accounts or relatively low charges on credit cards to attract new customers

§ Supermarkets price high demand, frequently purchased items such as bread

as loss leaders in order to build store traffic
 Operational CRM tools team that help customer acquisition

§ The lead management tool which includes a number of sub-

processes, including lead generation, lead qualification, lead allocation,
lead nurturing and lead tracking.
§ Campaign management help design, execute and measure
marketing campaigns with the support of CRM technologies
§ The technology assists in selecting and grouping potential campaign
targets, communicating the offer, measuring campaign results.
§ Event-based marketing (EBM) provides companies with
opportunities to approach prospects at times that have a higher
probability of leading to a sale.
§ A call from a customer enquiring about rates of interest on a credit
card might trigger a call from a customer retention specialist
§ Clothing retailers target different offerings at customers as they age
 BONOBOS USES PREDICTIVE ANALYTICS TO OPTIMIZE CUSTOMER
ACQUISITION STRATEGY
• Bonobos is a US men’s apparel brand launched in 2007 which become the largest apparel brand ever built on the Web in
the USA.
• Bonobos is a data-driven, customer-focused retailer that has always recognized the importance of making business
decisions around customer lifetime value (CLV).
• Initially the marketing team had used Excel to compute CLV metrics but, as the company experienced rapid growth and its
customer base grew substantially, this became time-consuming and the analysis was not completed as frequently as the
team would have liked.
• Not having access to real-time CLV insights made it difficult for Bonobos to make agile decisions about customer
acquisition.
• Bonobos then began to use analytics to compute the lifetime value of customers acquired through every marketing channel.
• This allows Bonobos to understand which acquisition channels are bringing in the most valuable customers, and optimize
their acquisition strategy accordingly.
• Bonobos discovered that its Guideshops, service-oriented e-commerce stores that enable men to try on Bonobos clothing
in person before ordering online, were bringing in customers with the highest CLV across all of its marketing channels. This
insight encouraged Bonobos to expand its marketing efforts to support the Guideshops.
• Bonobos also uses predictive analytics to identify their highest CLV customers. Bonobos then uses this information to
ensure these highly valued customers get the attention they deserve.
• ‘Top customers’ receive additional services, such as handwritten thank-you notes from the Bonobos customer service
team. Bonobos measured the impact of these notes on incremental revenue and repeat purchase rate, and saw a positive
lift.
• Top customers also receive perks such as exclusive event invites and early access to new