Reducing lost customer value due to poor marketing
Your marketing is driving people away
Less permission means less commercial value
Think of all the prospects and customers who have given permission for targeting and contact – that is the marketable base. One of the central tasks of the Marketing Department’s is to maximise the acquisition and retention of all permissions which underpin marketing activity.
While Marketing is busy building out data driven and omnichannel capabilities, the success of that effort is directly capped by the size of the marketable base. Every loss or gain in permission impacts CLV and campaign ROI.
Using choice architectures, touchpoints, and triggers the privacy experience for permission is designed by the brand, but not with complete freedom. Permissions are bound by the GDPR (Consent, Legitimate Interest and Objection) and ePrivacy (Consent).
Here are two stark facts about the marketable base:
- It is rarely managed strategically – with little focus on the whole portfolio of permissions which contribute to customer value and enable omnichannel contact
- The root cause of permission loss is rarely called out – It is the Marketing Department. Irrelevant, over frequent and poorly timed campaigns are to blame.
Three problems and three solutions
One.
Managing the marketable base means having a clear view of its size, the permission holding of every customer and prospect and the contribution each permission makes to CLV. This means associating customers, permissions, permissions events, marketing events, customer service, revenue, stages in the privacy lifecycle and permission gain/loss by touchpoint together in one view. This allows permissions reporting to be put into place (we recommend IBRO), targets to be set, drivers of permission gain/loss to be established, permissions to be valued and permission propensities to be modelled.
Key Takeaways
- The marketable base is defined by the quantity of marketing permissions given by consumers (who are prospects and customers)
- Marketing permissions are the opt-in and opt-out decision’s consumers make about marketing contact, data processing for targeting, etc.
- The marketable base is rarely understood strategically in terms of permission – it is the core enable and value driver
- Poor marketing activity is the number one cause of lost permissions, so lost value
- Marketing must take responsibility for permission management. Fixing the problem is easier than it sounds. Marketing might cause the problem but it is also marketing that can fix it.
PEA understands that marketing and brand teams have a huge part to play in privacy being a value add to the business, not a detractor.
”All lost permissions need to be thought of as lost customer lifetime value (CLV). The number one cause of lost permission is poor marketing activity. Marketing activity, without an eye on the permissions prize can become a value destroyer. The leaky bucket is easily fixed by taking a strategic, tactical and operational evidence led approach to plug the holes.
Two.
Drill down into campaign level ROI through a permissions lens. Audit each campaign to capture a net return which measures headline ROI and adjusts it against the lost CLV from permission withdrawal. The audit should include uncovering the drivers of the disparity of permissions withdrawal by campaign and testing the permissions propensity model.
Three.
Turning insight into action. What are the immediate actions which can be executed at haste:
Stop campaigns types which generate permission withdrawal that create a net negative impact on CLV
Stop outbound contact levels which generate permissions withdrawal with a net negative impact on CLV
Stop inappropriately targeting customers with a high permissions withdrawal propensity score.
Start defining the permission lifecycle – thresholds, objective and targets. Remember the permissions lifecycle can start prior to first contact with a prospect.
Start defining the events, triggers and responses needed for proactive permission management – nurture, build, extend and defend permission.
Start Inflow, Base, Outflow and Retain (IBRO) reporting which links permission and prospect/customer movements. In non contractual businesses a permission can be the only formal marker of a relationship.
Start creating the value proposition which can communicate the benefits of marketing to the base
Fill the holes
A project should focus on removing the negative impact of marketing activity on the base. This is the ‘low hanging fruit’ and well within the power of the marketing department to control.
