Socializing Data to Increase Customer Lifetime Value

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Marketing
Marketing
Combining the power of Big Data with the value of social graphing, CRM professionals and marketers are realizing a boost in ROI and a way to nurture customers' lifetime value.

Everyone is talking about Big Data and social influence as the new Promised Land to improve customer relationships and drive immediate and future sales, but finding and proving the true value is a challenge.The missing link? Many companies are overlooking the power of real-world relationships and offline interactions.

Meaningful relationships with the power to turn prospects into customers, inactive customers into buyers, and active customers into influential profit drivers are rooted in offline word of mouth. Anyone can have 500+ Facebook friends these days and of course some people have the time to comment, like, repost, share, tweet, etc. every product they purchase or store they visit. That doesn't make them "influencers" as there is no proof anyone actually listens or is driven to act.

Keeping it Real

Real-life friends tend to involve more in-depth interactions, a heightened level of trust and intense similarities, be it current interests, hobbies, activities, salaries, education level, stage of life, etc. Combined, these factors make real-world relationships much more influential when it comes to people's buying decisions than online social circles.

However, "socializing" data is an entirely different ballgame. Combining Big Data techniques with factual evidence of purchase influence, socializing data empowers CRM professionals and marketers to map meaningful relationships between people in a database to influence purchase decisions and enhance brand loyalty.Better yet, they can prove it.

One thing's for sure: People buy what their friends buy. Creating a social graph that maps out powerful, real-word relationships based on concrete bonds (e.g., family, coworkers, college roommates, neighbors, teammates) can help tap existing prospect and customer data to drive more revenue, both in specific, timely marketing campaigns and overtime through strategic, long-term customer relationship initiatives.

Need an example? Uncovering that customer A is a friend of customer B and both of them are friends with prospect C helps better reach potential buyers who are much more likely to act because their friends have already done so.

Delivering on the promise

Industry innovators are already pinpointing and targeting "purchase influencers" thanks to advances in Big Data and social graphing. As usual the financial services industry is full of early adopters-a prime example being the credit card industry.

While credit card CRM and marketing teams have relied on traditional prospecting models and direct marketing-based acquisition for years, they've seen the same meager response rate across the board. No one credit card company could really claim to be breaking through the noise and achieving stellar conversion. However, by employing new influence analytics to those same campaigns, credit card companies are now able to triple the conversion rate by targeting purchase influencers and their real-world connections.

However, there's also a negative side of purchase influence that cannot be ignored as it can be more powerful than positive influence in some cases. Telecom and utilities are the prime example here. We've found a chain reaction in social graphs: If an influencer cancels a contract or switches providers, their social circle is five to six times more likely to do the same either immediately or at the end of their contract. The scary part is that without diving deeper into their existing databases and looking at if/how their prospects, customers, and former customers are connected, the companies may not even realize there is any concrete link as to why their profits took a nosedive. And we all know it is more expensive to bring in new customers than it is to keep your existing base.

Combining the power of Big Data with the value of the social graph, CRM professionals and marketers are realizing a two to five times boost in ROI and fully nurturing customers' lifetime value. It is the next logical step in an ongoing evolution, and it is already changing the game in acquisition, cross-sell, and retention across a variety of industries. Don't be left behind-or worse, in the dark.

EXPERT OPINION
EXPERT OPINION