Businesses have known for decades that it is more profitable to retain a customer than it is to attract a new one. Loyalty programs, “insider” sales and a more personal shopping experience are just some of the methods that have been used in the attempt to make lifetime customers. Organizations that are adept at creating lifetime customers average approximately 9.5 percent more in revenue YoY, while less mature organizations realize just 3.4 percent.
This is the “age of the customer.” First, customers are tech-savvy and expect the same from the businesses with which they interact. Mobile apps are no longer optional for successful companies, because customers demand cross-platform access. Nor are they willing to tolerate a traditional website that is slow to load or visually unattractive, so it has also become critical for businesses to make sure that their websites offer a good first impression.
Second, customers today have benefited from the flood of information that was made possible by the Internet, economical home computers and innovative companies, such as Amazon, eBay, Facebook and Google. Typical customers feel more empowered; they can conduct their own product research to determine a product’s suitability, go online to compare prices and read reviews written by others who have purchased the product. Once, customers relied on merchants to guide their choices — now they feel more than qualified to make their own decisions.
The Customer Experience Maturity Model created by Sitecore can help businesses determine in which stage their customers fall. The model recognizes the value of creating lifetime customers, but it also recognizes that customers are more mature in terms of shopping than they were in the past. The Customer Experience Maturity Model defines three levels of customer maturity — attract, convert and advocate — and seven strategic values — initiate, radiate, align, optimize, nurture, engage and lifetime customer — that span the cycle from new customer to lifetime customer.
During this initial phase, companies are just beginning to build a relationship with potential customers as well as new ones.
- Initiate: The typical approach is to combine a “brochure” website with email campaigns and web analytics.
- Radiate: The company begins to expand their online presence. Content is distributed on other channels, such as social networks, or through a mobile website.
- Align: Digital initiatives become more aligned with marketing and strategic objectives, and content becomes more focused on customer behavior and needs.
Now that the company has gained the customer’s attention during the “Attract” phase, it is time to convert that attention to a sale.
- Optimize: Various analytics offer actionable insights that guide the optimization of digital initiatives.
- Nurture: During this stage, the company strengthens the relationship by focusing on the customer. Trigger-based, automated dialogues occur, and the company conducts relevant discussion on the customers’ preferred channels.
During the final phase, the goal is to forge a lasting relationship with the customer, build customer loyalty and encourage return visits.
- Engage: By combining offline and online customer databases into a central repository, companies can offer one-on-one, relevant, real-time dialogue that is based on the customer’s profile.
- Lifetime Customer: The “Engage” aspect is continued and enhanced. Real-time data is used to enhance the cross-channel customer experience and to anticipate customers’ actions and needs.
The Current State of Maturity
Overall, the current level of maturity is rated at 85.4 percent, according to a 2013 assessment conducted by Sitecore. However, when the seven areas of maturity are evaluated, it is obvious that companies still have a long way to go.
- 67 percent are in the “Initiate” phase
- 18.4 percent are in the “Radiate” phase
- 3.2 percent have moved to “Align”
- 1.8 percent have reached “Optimize”
- 4.3 percent have achieved “Nurture”
- Significantly, only 0.9 percent have reached “Engage”
- 4.4 percent are in the “Lifetime Customers” category
To assess where you are in CEMM, visit this page on sitecore.
Although the Customer Experience Maturity Model provides a map to achieve long-term goals, companies can reach a variety of short-term goals as well. Today’s customers expect much more than their grandparents did, and they respond most favorably to companies that meet their expectations. To learn more about how to progress through the CEMM spectrum, please contact EX Squared . We have the experience to guide you through every step.
Image from sitecore.net