How to Lose Customers

in Five Easy Steps

What common practices are resulting in anemic customer profits?
How can the three I’s of marketing help to maximize customer value?

As most marketing executives already know, losing valuable customers is all too easy. After all, organizations engage
in a dizzying variety of customer interactions across a broad range of products and services. Combine that
complexity with product-centric organizational structures and measures, and you've got a recipe for unwittingly
engaging in practices that can drive away valuable customers.

But it doesn’t have to be that way! Take a stroll through this e-book to learn how smarter customer interactions and
more customer-centric measures can help you deepen and grow relationships with your most valuable customers.
 HOW TO LOSE CUSTOMERS IN FIVE EASY STEPS

The five steps to failure

» Here are five common practices that lead companies astray in the quest to maximize profitability.
Click on the links below to get the story behind each one.

Don’t collaborate. Let each group worry about its own customer interactions.

Don’t find out what customers value. Just squeeze more value out of them.
Why is it more
Don’t consider the customer experience. Just push price and product.
important than
ever to keep your
customers happy? Don’t measure anything. After all, marketing is more art than science.

Don’t worry about tomorrow. Just focus on making this period’s targets.

view video clip
(37 seconds)

Jeff Gilleland
Global Strategist, SAS

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Time for a new approach:

The three I’s of marketing

Since the beginning, most business models have been built around organizational structures, management
and incentive plans, financial systems and the four P’s of marketing: product, price, promotion and placement.

Many comapnies have professed to shifting their attitudes, claiming to be “customer-focused,” “customer-obsessed,”
“customer-driven” or whatever. But even to this day, the heart of most business models remains product-centric.
That means companies frequently fall into the Five Easy Steps, whether they realize it or not.
What does product-
centricity cause If you’d like to get back on track, replace the traditional focus on the four P’s. Instead, coalesce your energies around the
marketers to lose
three I’s: insight, interaction and improvement. Then exploit readily available technologies to excel in all three dimensions:
sight of?
Gain deeper insight – Understand and predict customer value at a holistic, enterprisewide level.
Choreograph better interactions – Engage customers in a way that enhances mutual value.
view video clip Gain continuous improvements – Measure and report KPIs that matter, optimize investment of sales and marketing
(1 minute 17 seconds)
resources, and continuously learn from every customer interaction.

Martha Rogers, Ph.D.

Founding Partner,
Peppers & Rogers Group

» Let’s break it down further. What does it actually take

in order to achieve these three objectives?

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Three I’s = One customer-centric,

closed-loop business model
In order to... You must be able to...

Deepen customer insight 1. Manage quality customer data.

2. Predict customer behavior.

3. Profile and segment customers.

Choreograph customer interactions 4. Manage and optimize segment strategies.

What exactly
are the three I’s 5. Engage high-potential customers.
of marketing?
Gain
continuous improvements 6. Measure and report results.
in marketing performance
7. Optimize marketing investment.


view video clip 8. Apply lessons learned.
(1 minute 20 seconds)

Jeff Gilleland
Global Strategist, SAS

» Let’s drill down into the opportunity, the challenges and the
key steps associated with each of the three I’s.

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How can analytics-
driven insights help
companies treat millions
of customers as
individuals?
view video clip
(1 minute 20 seconds)
Rich Martino
Sr. VP of Market Information and
Research, U.S. Bank
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HOW TO LOSE CUSTOMERS IN FIVE EASY STEPS
Insight Interaction Improvement
Insight
Deepen customer insight with superior data management and analytics.
The opportunity
Every interaction with a customer is a chance to get data that leads to deeper customer insight. Never before
could you get so much information about customers and markets, transfer that information into usable
knowledge, and guide the investment of resources with precision.
The challenges
Trouble is, data pours in from multiple channels, from incompatible computing platforms, in mismatched
data definitions and redundant customer entries. Transforming it all into a clean, analysis-ready format can
be a daunting challenge.
The key steps
Manage quality customer data. Establish a data management platform that integrates data from multiple
sources, then cleanses and prepares the data to create a comprehensive view of the customer.
Create customer insight. Most comapnies have simple analytics that tell you what was and what is, but few have
an accurate view of what will be, why and what to do about it. Exploit predictive analytics to truly understand
customers—not just past behaviors, but likely future preferences and purchase patterns. Then you can antici-
pate their needs, improve customer retention and find smart ways to cross-sell and up-sell.
Profile and segment customers. Develop effective customer profiles and segments based on customers’
historical behavior, profitability and future potential. Don’t just use segments to support product-push
campaigns, but to predict customer needs and respond accordingly.
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 HOW TO LOSE CUSTOMERS IN FIVE EASY STEPS

Insight Interaction Improvement

Interaction
Choreograph interactions to improve the customer experience at every touchpoint.

The opportunity
Customers expect to receive a consistent experience across every channel and the sense that the company knows
them, whether they’re interacting via direct mail, the Web, customer call center or in person at a branch office.

The challenges
With thousands of campaigns to manage, spanning hundreds of customer segments and dozens of media chan-
Why are “treatment
nels and markets, many institutions settle for scattershot marketing. When customer interaction data is scattered
tracks” an important
around in data silos, it can be difficult or impossible to get a complete view of activities across the spectrum. It’s
basis for customer
interaction strategies? even difficult to know when not to communicate—when to pull back to avoid potentially alienating the customer.

The key steps

view video clip
Develop and optimize segment strategies. What unique treatments should each customer receive? What’s the best
(31 seconds) bundling of price and promotion? What is the best strategy for up-selling, cross-selling and retention efforts?
Armed with richer customer insight and targeted customer segments, marketers are becoming more selective
Jeff Gilleland and scientific about where they invest resources—and, in some cases, which customers they will even accept.
Global Strategist, SAS
Engage effectively with customers. Naturally, marketing success stems from targeting the right customers
with the right offers at the right time—even in real time—while prudently avoiding spending on unprofitable
prospects. With deep customer insight, you can effectively manage the customer dialogue across multiple prod-
ucts and channels, balancing the realities of budgets, sales capacity and other constraints.

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Insight Interaction Improvement

Improvement
Don’t just defend marketing performance; actively and continuously improve it.

The opportunity
The results of every campaign can be captured to help refine customer segments and marketing activities the next time
around, for a continuous cycle of improvement. Furthermore, spend that shows proven results gets budgeted again, gets
applied wisely where it will deliver optimum returns, and then is more likely to be increased.

The challenges
How does the ability Measurement and accountability are hard sells in creative organizations. But the only way to be sure you’re on track
to measure, learn
is to prove it. Even when marketing appreciates the need for measurement, it isn’t easy. Marketers are often forced
and improve translate
into competitive to cobble together data from sales, marketing research, syndicated databases and other fragmented sources just to create
advantage? a composite view of what (you thought) was happening. And it is usually a rear-view effort to support the annual plan,
not a tool to guide real-time course improvements or to show credible ROI.

view video clip The key steps

(56 seconds)
Meaningful and ongoing improvement requires excellence on three fronts:
Measure and report on all aspects of the marketing organization to align activities to strategies and goals, and to
Jeff Gilleland
Global Strategist, SAS
improve performance and accountability.

Optimize investment across direct and indirect marketing. Analyze and optimize marketing mix elements, such as advertising,
promotion and pricing…media plans by medium and market…and customer segmentation and treatment strategies.

Continuously learn and improve through a closed-loop system—leading to a knowledge-based relationship with your
customers that will differentiate you from the rest.

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How did U.S. Bank
evolve from silos
of product-centricity
to enterprisewide
customer-centricity?
view video clip
(2 minutes 4 seconds)
Rich Martino
Sr. VP of Market Information and
Research, U.S. Bank
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HOW TO LOSE CUSTOMERS IN FIVE EASY STEPS
How do you get there?
Start small. Assemble an integrated technology platform.
Evolve in stages. You don’t have to do a flash cutover to a new business model. You can implement technologies
in low-risk stages. Each investment builds on the previous one. You can test pilot programs within a single depart-
ment or customer segment—and then roll them out more broadly as they prove their value.
Integrate technology into a whole. You’ve gathered by now that the Holy Grail of customer value depends on
big-picture perspective. If you want customers to place more faith (and dollars) in your company, you have to
understand and manage the total relationship—spanning contact channels, products, related entities and time.
So the last thing you want is niche software components that don’t play well with others.
With today’s technologies, function-specific components can be integrated into a single, synergistic system.
Information flow then transcends functional silos, organizational boundaries, computing platforms and specialized
tools. Decisions can be made rapidly with full knowledge of underlying context and hidden interdependencies.
» Let’s take a closer look at the integrated technologies
needed to realize the full potential of the three I’s.
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Why do recent
advances in
technology make
this an exciting time
to be a marketer?
view video clip
(2 minutes 43 seconds)
Jeff Gilleland
Global Strategist, SAS
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HOW TO LOSE CUSTOMERS IN FIVE EASY STEPS
Technologies that enable
a best-practice approach
» C lick on the text in blue to learn more about the specific technologies that support
the three interdependent parts of a customer intelligence marketing platform.
Customer insight is about deepening your understanding of individual customers and treating customers
as individuals. It requires technologies to integrate and analyze data across products and channels. To maximize
success, you need tight integration between your customer insight and customer interaction technologies.
Customer interaction is about managing customer dialogue. Interaction technologies include marketing mix
optimization, behavioral triggers, digital marketing and real-time decision making (to name a few). These
interaction technologies are only as good as the customer insight that fuels them—which leads us back to the
integration imperative.
Improving marketing performance is about measuring and reporting what matters. It’s about aligning
organizational activity around actions that create value with the customers that matter most. It’s about
integrating the learning that occurs with every customer interaction—which again leads us back to the
integration imperative.
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Summary:
Better approach... better outcomes
What to do: What you’ll gain:
Deepen customer insight. • A 360-degree view of customers spanning all contact channels, products
and services.
• A ccurate customer segments (the basis for “treatment tracks”) and fore-
knowledge of customer behaviors.
• A ccurate assessments (and scoring) of present and lifetime
customer value.

Choreograph better interactions. • Steadily improved returns from marketing campaigns with each iteration.
• Marketing programs synchronized across units, product lines and channels.
• Triggered in real time by various customer milestones or behaviors.
• Profitable interactions.

Measure to gain continuous improvements. • Campaign results automatically plowed back into ongoing improvements.
• Quantifiable proof of the results from marketing spend.
• O
 ptimized ROI, given available budget, channel capacities and other
constraints.

Integrate technologies and processes. • A cohesive, enterprisewide marketing platform that spans customer
groups, products and channels.
• A foundation for customer-centricity even in the most product-centric
organizations.

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Learn more!
Customer-centricity is a journey. The following white papers and Webcasts will give you ideas on how to get going,
how to avoid obstacles and how to keep detours to a minimum.

White papers:

Competing on Customer Intelligence

Building Competitive Advantage Based on the Three I’s of Marketing

integrating technology to achieve competitive advantage.

Customer Experience Maturity Monitor

The State of Customer Experience Capabilities and Competencies
This research report from SAS, Peppers & Rogers and Jubelirer Research provides insights into building authentic
and profitable long-term customer relationships.

The Total Economic Impact of SAS Marketing Automation

This study illustrates the financial impact of implementing SAS Marketing Automation in the credit/debit cards
business, in one European country, for a global retail and commercial bank.

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Learn more!
Webcasts

Tips from the Trade - How to Execute Campaigns That Deliver ROI
In this Webcast, we explore how successful companies are enhancing their approach to campaign management to
operate more effectively, including segmentation techniques, contact policy management, and using predictive
analytics to drive decision making.

Tips from the Trade – Competing on Web Analytics

This Webcast features a panel of thought leaders who will discuss best practices in online analytics.
It explores how a successful online analytics strategy is built upon specific key performance indicators,
integration of online and offline data and appropriate use of social networking sites.

Stop Guessing - Start Knowing: Strategies to Optimize Your Marketing Campaigns

Our expert guests will tell you how integrating customer value into your business model can improve both
short- and long-term profitability – and why customer value management is so critical to your organization’s
long-term success.

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About SAS

SAS is the leader in business analytics software and services, and the largest independent
Why partner
vendor in the business intelligence market. With innovative business applications supported by
with SAS?
an enterprise intelligence platform, SAS helps customers at 44,000 sites improve performance
and deliver value by making better decisions faster. Since 1976 SAS has been giving customers
around the world THE POWER TO KNOW ®. www.sas.com

view video clip
(2 minutes 43 seconds)

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and

Jim Goodnight
product names are trademarks of their respective companies. Copyright © 2008, SAS Institute Inc. All rights reserved. 493057.0808

CEO, SAS

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