November 30, 2011

Give Me A Practical Example

Ok, you want a practical example of a "Transformational" customer?

DirecTV has a "Refer a Friend" campaign ... you refer a friend to DirecTV, and everybody wins.

  • You earn $100 in credits.
  • Your friend earns $100 in credits.
  • DirectTV can anticipate about $2,000 in revenue in the next two years.
This is a "Transformational" customer ... the customer is doing the work for you.

Now, it's entirely possible that this customer has a standard definition receiver (non-DVR, non-HD), making this customer highly "Traditional" ... so you have to weight activities, and you have to predict which activity is more likely to happen in the future.  But it isn't rocket science, is it?

In the catalog world, how many customers are doing customer acquisition work for you?

This is the whole secret to some of that Social Commerce stuff, right?  Prospects can only join if an existing member invites the prospect to join.  Viral aspects are literally built right into the essence of "the brand" ... you see this all of the time in the gaming world.

"Traditionals" are bought ... you go to your co-op and you pay $0.06 each for the right to mail a very "Traditional" customer ... and then you're not surprised when you acquire a 61 year old rural shopper via the telephone channel.

"Transformationals" may be bought, but it's a very different "game" if you will.  A "Transformational" customer signs up, earns rewards, and willingly recruits customers.

And here's the problem, folks ... it is really hard to "mix and match".  You can't expect your marketing strategies to "go viral" when your customer base is loaded with "Traditionals".  And you can't expect a "Transformational" customer to embrace a catalog.  You have to seed your customer file with a ton of "Transitionals" to have a chance at making both old-school and modern marketing work, and that's tough sledding because "Transitionals" are moving ever so slowly toward "Transformational" status.

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