Piloting New Customer Engagement Plans

The Benefits of Piloting a New Customer Engagement Plan

The pressure to increase customer loyalty and revenue, while trying to justify an investment in more modern customer engagement technologies, techniques, and tools is a very real challenge for many marketers. Data extraction, internal resources, expertise, and lack of organizational agility can keep marketers from executing personalized customer engagement at scale. How fast we embrace these new technologies and marketing methods, and how much our company can afford to invest becomes the big question.

Reduce the Risk. Seize the Opportunity

Do we have to invest all at once? No. There is a way to balance the needs of the customer, our organizational capabilities, and financial commitment. By creating a pilot, we can employ a strategy that allows us to test a more modern customer engagement plan. This allows us to reduce the risk, while seizing the opportunity to increase customer loyalty and revenue, and provide executive management with a case study demonstrating the ROI of the investment.

5 Benefits of a Test and Learn Strategy

  1. Allows you to try various customer engagement strategies before you invest in technologies.
  2. If structured correctly, a test can deliver clear learnings.
  3. Gets your team acclimated to new methodologies.
  4. Allows you to leverage vendor partner expertise and technologies.
  5. Once you dissect results, you can capitalize on what works, and use learnings to provide management with case study for future investment.

A Case in Point – Costco Wholesale

Last week, I had the honor of speaking with Mark Dergarabedian, Director of Marketing for Costco, at the Customer Relationship Marketing Conference (CRMC), in Chicago.  There we spoke about Costco’s Test and Learn Strategies for defining new and different customer engagement tactics.  Costco is a massive company, with 89 million card-holders world-wide, and is the second largest retailer in the world. With so much success under their belts, change, at Costco, does not happen without some serious testing. VeraCentra has worked with Costco for several years, so we have a good understanding of their business model, data, and executional challenges.

Working with Costco marketing management, we isolated a specific segment of Costco membership where we could test new customer engagement strategies and simultaneously provide a positive financial impact on the business.

The main key objectives for the test:

  1. Try out new ideas and approaches to optimize learning.
  2. Keep it simple.
  3. Impact frequency and spend per visit enough to “fund” the test.
  4. Improve the membership renewal rate.
  5. Use results to form a case study for senior management demonstrating the ROI of more modern technologies and marketing methods.

While the test is still underway, we are taking snap shot views of the performance and we have learned quite a bit already!  There are clear components of the pilot program that are working very well, and plans are underway to leverage what we have learned.

There are also some surprises.  As with any test, not all our assumptions proved true. But then, that is why testing a customer engagement plan is an important and worthwhile step to take.

The Costco Case study was presented in full at last week’s CRMC Retail Conference by Connie Hill, President, VeraCentra and Mark Dergarabedian, Director of Marketing, Costco Wholesale. You can download a PDF of the full presentation: Reduce Risk and Seize Opportunity with a Customer Engagement Pilot, here.
