August 31, 2011

Disconnect: Loyal Customers vs. Organic Percentage

Here's a big disconnect that keeps coming up in projects.
  1. The more loyal a customer becomes, the more we as marketers want to contact that customer.
  2. The more loyal a customer becomes, the more the customer is willing to shop without the need for advertising, reducing the need to continue to contact the customer.
In other words, customers frequently act in a manner that is opposite of how we, as marketers, want to treat them.  As a customer becomes more loyal, the organic percentage increases, meaning that the customer may need less advertising than at a disloyal stage.  At the same time, the marketer observes spending increases that filter into a CRM system, causing the customer to become saturated with additional advertising that is justified by matchback/attribution systems that incorrectly allocate demand against the advertising, causing even more advertising to flow to the customer.

Yes, this is a problem that you, too, face with your best customers.

Hint:  There is a TON of profit to be had figuring out this riddle.