Allison Hartsoe: 00:01 This is the Customer Equity Accelerator. If you are a marketing executive who wants to deliver bottom-line impact by identifying and connecting with revenue-generating customers, then this is the show for you. I'm your host, Allison Hartsoe, CEO of Ambition Data. Each week I bring you the leaders behind the customer-centric revolution who share their expert advice. Are you ready to accelerate? Then let's go! Welcome everyone. Today's show is about bonding among the CLV community. Now I was inspired by this topic because recently, a podcast fan caught up with me in San Francisco to talk about customer-centric ideas. Now I was beyond flattered, of course, but moreover. I just really enjoyed the conversation, and when I originally started the show two years ago, it's really been almost two years. I just wanted to highlight what I felt was a really interesting idea. The idea that we could use data to deeply understand our customers and then efficiently communicate with them and back and forth and back and forth until we broke down that impersonal corporate wall that personally bugs me so much.
Allison Hartsoe: 01:20 I am truly grateful to all those people who have reached out with their ideas and praise for the show. It really means a lot. Thank you. I'm also grateful to all my guests who have taken their time to share ideas with me in this public forum. I consciously pick a balance of men and women as well as perspectives even when I don't agree with them to allow the topic of customer centricity to come to life. Next week we are coming up on a very special 100th episode with one of my favorite guests, and I'm not going to tell you who it is, but it is a show that you should not miss. And finally, for each show, there is a wonderful team of people who helped me produce it. Several weeks ahead, I choose the guests that I want on the show, and not everyone makes it on this show, but once we've recorded, my team just swoops in and starts the real work. Nishchal removes all the ums and ahs to make our guests sound great.
Allison Hartsoe: 02:24 Hunt does the final check and adds the show bumpers. Lori and Willard produce and post the podcast social media and distribute the episodes to iTunes and Spotify and all the other locations that pick us up. Willard runs the speech to text translation. Lori builds the web-page and posts each episode with its transcripts, special notes, and links to the Ambition Data website, and eventually, we review the analytics, of course, so thank you to my team, who does all that work to make every episode exist. Now let's talk about the idea of bonding. If you are familiar with the consumer decision journey, then you'll know what I mean about bond. This idea came out maybe five-ish years ago, and it pushed marketers to think about consumer behavior as a loop, not a one-way funnel, which was the common terminology at the time and still is selectively of course.
Allison Hartsoe: 03:25 It outlined about six different stages of buying from consider and evaluate to buy experience, then advocate and bond. And the theory further advocated that when you provide a great post-purchase experience, then people have the opportunity to bond to your product or brand, and that repurchase cycle becomes much shorter after each purchase. And that's known as the loyalty loop. Now the key concept is that the power is in the back half of the loop. Now, David Edelman, who did this research at McKinsey, uh, he was at McKinsey at the time, I think he's over at Aetna now, but he mostly used social media information and a bit of firsthand customer research to create this model. But today we actually can back it up with math. And that is yes CLV math. When you take the CLV formula apart, you can see it is driven by purchase recency and frequency, but it projects forward in time according to a timeframe that you said in the formula.
Allison Hartsoe: 04:38 So people who come back and purchase again and again are often high-value customers. Those customers who are bonded customers who love you. And it's important not to berate these people with transactional marketing messages, but to raise them up a level to recognize and honor then in ways that some very good loyalty programs can do. One of them was an example from the coffee bean and tea leaf and how they brought their best customers into the headquarters and treated them like rock stars for a day — great example of emotional loyalty. So unless you're a bank or some similar type of company that can hold your customers hostage by making it so painful for them to leave, they just throw up their hands and say, I'm not gonna deal with this. I'm just going to stay.
Allison Hartsoe: 05:30 There is one bank I personally know and will not name that flashes high-value customer on the screen for customer service reps whenever a transaction occurs that results in a completely stale product pitch that has zero context of who you are and what you need. So basically, you come in high-value customer, uh, flashes on the screen, and they just start throwing products at you. Not good. That is what I mean by transactional marketing. Now holding customers hostage is a bonafide technique. It is not a nice one, but I haven't seen many bank failures in a while, but I can't say the same about retail failures. Ouch. I know that's painful, but that brings me back to bond. I think retail is better at keeping customers coming back because they have to be. Retails approach, though, is often mind-numbingly transacted 10% off, 50% off, sale, sale, sale, buy, buy, buy. Especially now when retails approach could be and should be an emotional bond. Now, if you want to hear professor Faders' discussion with me from this time last year about black Friday, it'll tell you a whole lot more about this topic.
Allison Hartsoe: 06:55 Just on the ambition data podcast page search, black Friday or Pete Fader, and you'll get to that episode. So when we make an emotional bond, we get behind a brand and logic steps aside. So, for example, I personally buy Bulletproof coffee and MCT oil on a regular basis. I love this stuff and I tell almost everybody I know about it and say how amazing it makes me feel. But this weekend, I happened to see MCT oil in Costco for sale and about maybe a third of the price I typically pay. Did I buy it? No, I did not. Why? Because I don't trust the new unknown brand. I have an emotional attachment to my brand and everything it stands for in neutropic nutrition. Did you see what I did there? I called it my brand as if I own the company. I do own a company but not that company, and that's how we feel when a bond is made.
Allison Hartsoe: 08:04 It's very Avatar, by the way when does that second movie coming out? But I digress. Well, there's another example of this that you might not know and it comes from eBay. You ain't realize on a similar use of auctions style bidding to invoke the ownership principle. It's the idea that once you've bid on an item, you've already pictured it in your home. Imagine the experience of using it, how happy it will make you, and on and on and you keep bidding sometimes beyond reason because you think you already own it. You're attached, it's yours. You're attached to the item. So when we think about bonding, let's realize that customers are different. No matter how many choices we dangle in front of them, no matter how many coupons or discounts, not all customers will develop an attachment to our brands. Not every person is interested. Not every person who's interested in customer-centricity will enjoy my podcasts.
Allison Hartsoe: 09:11 Some of them love us, some of them don't. Some are in the middle, but let's realize one thing that the days of read from the handbook, that's not our policy are over. You must know your customers. Corporations are transforming, and leaders are emerging, and they all have one thing in common. They know how to manage customers individually at scale, and that is ultimately what I want to bring to you. So thank you, my listeners, for being part of our bonded CLV community for sharing your theories and emerging ideas. We are indeed better together. As always, you're welcome to reach out to me at Allison@ambitiondata.com. I love to get your comments and suggestions, and links to everything we discuss are at ambitiondata.com/podcast. Remember, when you use your data effectively, you really can build customer equity. It's not magic. It's just a very specific journey that you can follow to get results.
Allison Hartsoe: 10:22 Thank you for joining today's show. This is your host Allison Hartsoe, and I have two gifts for you. First, I've written a guide for the Customer-Centric CMO, which contains some of the best ideas from this podcast, and you can receive it right now. Simply text, ambitiondata, one word, to three, one, nine, nine, six, (31996), and after you get that white paper, you'll have the option for the second gift, which is to receive the Signal once a month. I put together a list of three to five things I've seen that represent customer equity signal, not noise. And believe me, there's a lot of noise out there. Things I include could be smart tools. I've run across articles, I've shared cool statistics, or people and companies I think are making amazing progress as they build customer equity. I hope you enjoy the CMO guide and the Signal. See you next week on the Customer Equity Accelerator.
Key Concepts: Customer Lifetime Value, Marketing, Digital Data, Customer Centricity, Long-Term Customer Value, Marketing Leaders, Analytics, Creativity, Product Development, Audience Research
Who Should Listen: CAOs, CCOs, CSOs, CDOs, Digital Marketers, Business Analysts, C-suite professionals, Entrepreneurs, eCommerce, Data Scientists, Analysts, CMOs, Customer Insights Leaders, CX Analysts, Data Services Leaders, Data Insights Leaders, SVPs or VPs of Marketing or Digital Marketing, SVPs or VPs of Customer Success, Customer Advocates, Product Managers, Product Developers