VAULT CRM Model – A Conceptual Model for Customer

Relationship Management

Many models of Customer Relationship Management (CRM) for online products, sites or services are highly technical and often tied to
a specific software package or solution. Too often the fundamentals are overlooked, with a lack of understanding of the needs and
considerations of the end user. The VAULT Model provides a simple conceptual framework which enables the Marketer to align
strategies and tactics to groups of users as they progress through their product (read site or service) experience.
The model propounds five ‘stages’ in a users progression as they encounter and experience a product. These stages compartmentalize
the user so that specific actions can be applied to engage and motivate them towards long-term satisfaction and retention.
It is fundamental for the Marketer adopting a CRM programme to understand what the core objective of their product is. What’s the end
game? What’s the desired user transaction? Is it to purchase an item or items? Is it to view information or content? Is it to register for a
service? Once this has been determined, the five stages of the VAULT Model can be defined and applied:

ustomer retention starts before a user first actively experiences or engages with a product. Their future behavior and attitudes towards
the product are conditioned by their initial encounters with a brand through word-of-mouth or marketing. It is therefore imperative for the
Marketer to consider how their acquisition marketing leads into the initial product experience and consequently, how the user is first
‘welcomed’ to the product. For websites, this requires understanding where the ‘doors’ are into the site, i.e. key pages through which
new users first enter. How does the site messaging introduce and explain the product? How intuitive is the navigation to the next step in
the product adoption process? How do you reward repeat visits and behaviour? Get the welcome right and it makes keeping users
easier in the future.

A – Activated: “Users who have actively engaged with or adopted the product in a repeated fashion.”
The second stage in the VAULT Model is to define what constitutes ‘activation’ and to determine how to move a user from being a
‘Virgin’ into being ‘Activated’. These answers will vary depending on the product offering and user profile / lifecycle. An ‘Activated’ user
could be one that purchases a number of items (one or multiple?), or registers on the site to access additional content or benefits. It is
imperative that the definition of activation relates to the core objective of the product. Activation Rate, i.e. the number of new users
meeting the definition of activated, should be monitored on an ongoing basis as a Key Performance Indicator (KPI). As with Virgin
users, attention should be paid to not only how a user is ‘converted’ into becoming Activated, but also how they are ‘welcomed’ into this
new level of engagement. Site messaging should reassure the user that they’ve made the correct decision.
Activated users can be further analysed and understood based on their degree of activation. At a basic level, this can take the form of
‘Light’, ‘Medium’ or ‘Heavy’ users. These definitions should again be based on the core objective of the product and tracked as part of
the suite of KPIs. Accordingly, strategies and tactics using a mixture of messaging and offers can be applied to transition users between
these three strata to increase product usage. An alternative segmentation identifies ‘Occasional’, ‘Regular’, ‘Advocates’ and ‘Super
Fans’. These terms not only reflect the nature of the user, but also suggest how they evolve and can be used strategically to ‘up-sell’
and ‘cross-sell’ the product, ultimately leading to greater loyalty and product evangelism. These Activated segments are defined as
follows:
Occasional - “Users who have activated their product experience, yet are sporadic in their usage.”
Regular - “Users who demonstrate frequent and on-going product engagement and usage.”
Advocates – “Users who frequently use the product and who actively tell non-users about its benefits, so spreading word-of-mouth.”
Super Fans - “Users who proactively market the product in an organised fashion.”
Moving users along this continuum – Occasional > Regular > Advocates > Super Fans – is the key to driving repeat adoption, loyalty
and evangelism. How do you encourage this? Marketers can look to offer benefits to users who behave in a certain fashion, e.g. make
multiple purchases, return frequently, or pay a premium. These benefits can take the form of subscriptions, loyalty programmes or
access to exclusive ‘VIP’ areas or content. The Marketer should also consider how to make it easy for the user to evangelise about the
product to non-users through referral rewards / affiliate programmes, adding content dissemmination and bookmarking tools such as
Digg, Reddit, StumbleUpon, etc. or simply ‘Send To A Friend’ links.

U – Unstable: “Existing users who are becoming erratic in their behavior towards the product and / or disillusioned towards it.”
The central pillar of a CRM strategy is to identify ‘at risk’ users before they end their relationship with the product, and to put in place
tactics in order to persuade them from doing so. VAULT defines this group as ‘Unstable’. Per Activated users, the definition of an
Unstable user will vary depending on the nature of the product and it’s core objective. Generally, these definitions will relate to the
behaviour and / or attitudes of the user. Product satisfaction will invariably be a key component where if this drops below a certain
threshold, it is likely that the user will be lost. Using datamining and on-site research techniques, the Marketer can track a user’s
behaviour and attitudes to ascertain the point at which they become ‘Unstable’. For example, on-site research can track users’ declared
satisfaction and align dissatisfaction with specific user behaviour or profiles. These can then be targeted across the wider site audience
to trigger corrective measures in the form of messaging or promotional offers.
An extension or alternative metric to satisfaction is the concept of “net promoter scores”. This measures the difference between the
proportion of users who give a high response (9 or 10) to the question: “on a scale of 0 to 10, how likely is it that you would recommend
us to your friends or colleagues?”, termed “Promoters”, and those who give low ones (0 to 6), “Detractors”. Some companies have
found that net promoter coefficients correspond highly to customer loyalty and future behaviour and, as such, net detractors can help in
the opposite manner by identifying potential Unstable users. Both satisfaction and net promoter models have been questioned:
satisfaction in that it reflects only vague feelings rather than a telling action, and net promoters as the model is unbalanced given it’s
scoring system. Used in unison, satifaction and net promoters / detractors can guage the levels of and specifically identify Unstable
users; what’s important to the Marketer however, is to follow-up to understand what’s going wrong with their offering and how they can
correct this.
L – Latent: “Users who have not engaged with the product for a sustained period of time, yet who have not fully terminated their
relationship.”
‘Latent’ users are those who have dropped off in their activity with the product. This could be for a host of reasons: dissatisfaction, a
superior competitor offering, lack of further need for the product, etc. It is important for the Marketer to understand why this is the case
so that they can take the necessary measures to avoid this with future users. Again, the number of Latent users should be tracked
based on a time period of in-activity, the threshold set using datamining / research to understand the likelihood that they will return
within respective timeframes.
If the user has provided some form of contact details through a registration process, it may be possible to re-connect with them. This
action can take two forms: research to understand the reasons behind their lack of activity, or some form of promotion to entice them to
re-engage and switch back into the product. The optimum solution would be to use a combination of the two in order to encourage a
greater research response.
T – Terminated: “Previous users who have not engaged with the product for an elongated period and have thereby ended their
relationship with the product.”
The final outcome in the VAULT progression is full termination. This can be defined based on two possible scenarios: straight closure of
an account / request to un-register, or a lack of activity for a period of time at which it is accepted that they will not use the product
again. As with the previous stages, it is important to monitor the number and proportion of users terminating, otherwise defined as the
product’s ‘Churn Rate’ (for any given period of time, the number of participants who discontinue their use of a service divided by the
average number of total participants). A key objective of a CRM programme is to reduce and minimise both Latent and Terminated
users. Again, if the user has provided re-contact details, it may be possible to win them back with a reward offer or serve them with a
research questionnaire to ascertain their motivations for leaving.
Applying the Definitions
As highlighted, the above definitions will vary depending upon the nature of the product, user profile and lifecycle of adoption. The
VAULT model is intended to be built around a level of understanding and insight derived from a programme of datamining and research
which enables users to be identified, segmented and tracked such that specific actions can be applied in the form of: follow-up
research, site usability design changes, targeted messaging, or tailored promotions. It is this integration of data and activity built around
the five stages of adoption and termination which enables the Marketer to ‘manage’ users from product consideration, through
activation and ultimately to prevent potential deactivation, all of which leads to long-term user retention – in other words, VAULT is all
about locking them in.