Experiential marketing can be defined as a marketing initiative that delivers consistent levels of brand information, comprehension and familiarity to consumers at each and every touch point. This ensures that there is no gap between the brand promise and the brand delivery. It offers an emotional connect between the brand and customers by providing truly “wow” experiences. Experiential marketing attempts to connect consumers with brands in personally relevant and memorable ways.
Further, experiential marketing gives customers an opportunity to engage and interact with brands, products, and services in sensory ways. Personal experiences help people connect with a brand and make intelligent and informed purchasing decisions. The term "Experiential Marketing" refers to actual customer experiences with the brand/product/service that drive sales and enhance brand image and awareness. It's the difference between telling people about features of a product or service and letting them experience the benefits for themselves. When done right, it's the most powerful tool to win brand loyalty.
A Smile, a smell, a touch, a taste, a thoughtful gesture, all add to the buying experience. Positive experiences need to become institutionalized within the system so that all touch points deliver the brand essence. In short, it is a tool that helps influence a buying decision.
Once the buying decision has been made and a customer has been acquired, a different process begins: relationship maintenance. Customer retention techniques can help ensure that the customer stays loyal to the brand and is not lured away by competitors. Modern companies realize that it's far more expensive to find new customers than keep existing ones, and therefore it has become absolutely mandatory to invest in existing customer relationships and ensure that they keep growing in a mutually-beneficial manner.
Customer retention involves the use of knowledge discovery methods in order to ensure actions that existing customers’ needs are met and they remain loyal to the brand.
Customer Retention is not Customer Satisfaction. Indicators of customer retention include customers' actions, repeat business, purchase of ancillary services, recommendations to others, willingness to pay premium price and frequency of purchase. These factors can be easily quantified and measured by the rupee value of each action. Customer retention strategy supports customer experience.
The customer retention rate refers to the number of customers lost over a period of time. It is normally calculated by the percentage of lost customers versus existing customers over a quarterly or annual period, without tallying new customer acquisitions.
Employee loyalty and engagement has a direct relationship to customer behaviour. Employees are capable of directly contributing to both customer disappointment and customer delight. It is essential that companies have a research and analysis method that links staff performance to customer behaviour, so that they can hire, train, recognize and reward employees for how their contribution towards customer value.
How to Build a Customer Retention strategy?
Customer loyalty is all about driving perceived value, whether that is rational (functional, quality, cost, etc.), emotional (trust, service, communication, information, brand equity, etc.) or a combination of these two dimensions. To build a strong Customer Retention strategy, it’s important to identify what leverages top-end customer commitment and advocacy behaviour, and then build customer experience around it. Unfortunately as of date both internationally and domestically there is no standard schedule that confirms the periodicity of the communication that improves and builds brand loyalty. It’s observed that customers reported an interest in receiving communication from brands as long as they could see personal value in each message.
When it comes to building a customer loyalty strategy, we recommend businesses to use these six questions as a guide:
- What are the expectations of our customers and what it will take to exceed them?
- What differentiates your brand in the eyes of our customers?
- To what extent can we grow the business with existing customers?
- How do interactions with customers affect their satisfaction and buying behaviour?
- Are there any customer segments that require different treatment?
- How loyal is the customer base and how can it be improved?
How to Implement Customer Retention program?
A road map for implementing a Customer Retention Program should include
- Appropriate research for identifying the benefits.
- Testing them for prospective customer interest and effectiveness.
- Following up with further research once implemented to make certain that the Customer Retention program is working.
Let’s examine a real life discussion between a Brand Manager, Marketing Director and Manager - After Sales Service.
Brand Manager – Am calling off the new Brand Experience initiative for our refrigerators range that we have rolled in 15 cities as of yesterday.
Marketing Director – It’s too early; the EM agency needs some more time to settle…give them another 3 to 4 days. Don’t be anxious.
Brand Manager – But Ravinder; it’s an investment down the drain. In fact the feed back from all the Area Sales Managers is that the Agency is doing an excellent job. In fact the team has thorough knowledge, is proactive and well disciplined.
Marketing Director – Then what’s the problem! Sit; let me get some coffee organized.
Brand Manager - Boss the customers are downright abusive; they are calling us a non-user friendly corporation with no business ethics.
Marketing Director – That’s a serious accusation. Is this the feedback you have from all the ASM’s? (Brand Manager nods his head in acceptance) That’s really shocking! Tell me more.
Brand Manager - Given the poor track record of our companies After Sales Service to current customers, both potential and current customers are not appreciating our Brand Experience efforts for the new range of refrigerators. Unfortunately we have just acquired them; but there is no investment in maintenance of existing customers.
Marketing Director – Let’s call in the Manager - After Sales Service over for this meeting.
Brand Manager – Sure; but Boss let’s stop the Customer Activation program for a month; make the necessary efforts to streamline After Sales Service.
Marketing Director – That’s a good idea. Please communicate to the Sales Director and all the ASMs regarding this decision.
Manager – After Sales Service joins the meeting.
Marketing Director – Hey Ram, our poor track record in attending to customers complaints has landed us in trouble. Our Customer Retention Program is today affecting our Customer Activation efforts for our new range of refrigerators that we have started yesterday across 15 cities.
Manager - After Sales Service - You're confusing Customer Retention and Customer Activation.
Marketing Director – I disagree, the two are connected. Past experience in terms of Customer Care is going to influence the brand decision. The customers are most reluctant to buy our range of refrigerators... However good your trial generation is, if the past experience is bad you'll never buy into that brand. To say that one doesn’t affect the other is myopic.
Brand Manager - In my opinion there is a need for greater connect between different functions of the Corporation, enabling enhancement of brand experience; ensuring better returns for the marketer.
Marketing Director – In the past the customer would just bad mouth about his experience with our brands to 10-20 friends. Now thanks to the internet anybody wanting to buy a product and doing internet research reads about the bad experience…..So how do you handle it... great Customer Activation is not going to go very far in countering this, if our Customer Service Department is not put in order.
Key Learning’s
- Brand that gives Customer Satisfaction through Customer Retention will benefit with positive Customer Activation; whereas the Brand that doesn’t deliver satisfaction leads to negative customer activation.
- The problem is in segregating these two aspects. From the consumers’ point of view there is an overlap... and it doesn’t matter how you define Customer Activation or Customer Retention. What matters is the overall experience that the brand gives to the customer? Is it positive, negative or neutral?
- Most marketers may not agree with the problem. In fact marketers are looking at the brand deliverance from their point of view... but to succeed in today's environment, and with today's customer you have to put yourself in the consumers’ shoes...
- Great Customer Activation but poor After Sales Service will result in negative word of mouth impacting the brand image. In short, there has to be a cohesive way of looking at brand experience holistically.
- Today marketers have all the data they need about the consumers; all it needs is combining those databases and using them to create more benefit for customers. This would enable experiential marketing that can truly live up to its name for not just new trials/consumers, but for all existing customers.
We need to work towards a principle of ‘Good to Great’.
Customers today is all about CARE, Retention and instant gratification, and there’s nothing like brand loyalty. “Every customer that walks in is an opportunity, and every customer that walks out without evaluating the offer, is an opportunity wasted”.
