0 I Want My LTV Shirt!

I received my custom-printed “LTV RULES!” t-shirts yesterday. Naturally, you buy these over the Internet. The customer experience was painless at www.designashirt.com and I’d highly recommend them.

What’s interesting from a Client X Client point of view is that the company offered a $.50 discount on each shirt if you add their logo. Maybe I shouldn’t be too impressed at their cleverness in recognizing that the product represented an advertising opportunity, since many of their shirts are used as marketing promotions to begin with. Still, it’s a classic example of identifying a “slot” (space on a shirt you printed). converting it into a customer experience (if your logo were not on the shirt, no one would not know you produced it), and attaching a value to it (paying the buyer $.50 per shirt).

How did they come up with $.50? I don’t know and rather doubt it’s based on very precise analysis—after all, it’s tough to measure response to such a promotion. Could they sell the space to someone else, perhaps for more money? Quite likely: many marketers would welcome the opportunity to reach such highly targeted audiences, and many of the shirt buyers would gladly trade a price reduction for adding a logo or two. If the match were made correctly, there could be a mutual halo effect between the organization and the advertiser.

Anyway, I’m looking forward to enjoying my shirts, and will definitely send one to the colleague I mentioned yesterday who didn’t want to run his company by LTV.

0 BAI Banking Strategies Article Shows Importance of Managing Complexity

Last Thursday’s post on ad hoc analytical systems prompted an interesting set of comments about overcoming product-based organization at banks. As it happens, the BAI’s online Banking Strategies magazine published a related article last November, called Uncovering the Hidden Cost of Complexity.

The article starts by suggesting that customer focus causes the product proliferation that makes good customer experiences so difficult to create: “As banks became more customer-focused over the last decade, they expanded their product set rapidly.”

This is an intriguing thought although it seems like blaming the victim for the crime. But after describing the problems caused by complexity, the authors move in the opposite direction. “The implication is not that banks should limit the variety of options to their customers, but that they should do the following” to ensure complexity adds value:

- Understand what complexity is valued by customers
- Quantify the hidden costs
- Identify the drivers and impacts of complexity
- Design processes to handle variety
- Innovate around advantages

You can read the article for the details. I’m not sure whether complexity is a problem in its own right or just a symptom of other issues. But I do agree with the authors' fundamental point that systems and processes must be designed to deal with complexity effectively. And I definitely agree with the authors’ focus on the quality of customer experience as the primary goal of each business. Any approach that starts from that premise can only lead in a good direction.

0 Overcoming the Real Roadblock to Customer-Centric Management

A marketer who understands the need for customer-based management told me yesterday that the biggest obstacle to adoption is the intense product orientation of her business. That sounded familiar: I heard exactly the same thing last December at the National Center for Database Marketing in December (see my December 13 post).

Her comments were a useful dose of reality. It’s easy to forget that lack of customer-centric technology and skills are not the main obstacles to customer-based marketing. And, even though I can give you a detailed explanation of why product-centric structures are doomed to collapse, that doesn’t necessarily convince people to adopt a customer-centric approach as the alternative. So I do have to try harder to explain how companies will benefit from the transition.

One positive bit of news is that online marketing operations seem generally more open customer-centric than traditional channels. Maybe this is because the technology itself is so often based on customer profiles. Maybe it’s that initial online ventures often resided outside of the traditional product organization. Maybe it’s that the “free” nature of incremental online messages removes the cost constraints of other media, and thus exposes the need for someone to control the number of messages sent to customers. Whatever the reason, online marketers are more likely to function as gatekeepers of customer access. This puts them in a position to coordinate offers so they meet the needs of customers, not product managers. Maybe the resulting successes will lead other channels to adopt the same approach.