Change is happening, faster than you think
Doing business in Vietnam, on any digital platform, is often a question of KPI. Generally, the focus is on the financial results businesses can get for a web or app project, the Return on Investment (ROI). And we all agree, every investment merits a return. Businesses want to optimize their digital marketing spending to guarantee maximum visibility and conversion. The digital arena, however, remains a service sector and the variation of great to mediocre service from agencies is high. How do you know as a company if you will get the best result, in other words, the highest possible return on investment? How do you win?
The good news is that the democracy of the internet is still young and it is never clear who the winners and losers will be from one year to the next. Everyone has a chance. Granted, the more money you can invest, the more opportunity you can obtain. But the fact is that you can be very successful with minimum investment.
As a digital strategy agency, we clearly must propose solutions that will participate in the financial health of our clients. But strong ROI is a result of multiple issues including pricing, distribution, employee skills, and ultimately customer satisfaction. ROI and customer satisfaction is not always a straight line. And often, it tends to reinforce long-term objectives. Businesses care about short-term returns as well. So what can we do?
Return On Objectives
Strengthening your online image is critical to improving customer satisfaction. What we can do is shift our focus to short-term objectives, what is commonly called ‘Return On Objectives’ or ROO. We want to apply ROO to generate customer satisfaction, which will give greater customer retention. And for years we have known that the cost of new business is substantially higher than the cost of retaining current customers. According to marketing statistics a new customer costs 5 times as much as retaining an existing customer.*
In other words, “According to the book Marketing Metrics, businesses have a 60 to 70% chance of selling to an existing customer while the probability of selling to a new prospect is only 5% to 20%.”**
Brand fidelity is constantly challenged. But what the numbers suggest is that while the cost of getting new customers is getting higher, the cost of retention is getting much more profitable.
But what if we questioned who exactly is a ‘customer’? Is it only those who pay? In other words, prospects that you convert? Or are they potential customers you convinced to come visit you (by whatever marketing channel you use).
When someone walks into a store, most shops treat them as a paying customer. There is (or should be) a smile and a helpful service attitude. The person may not yet be a customer, but since they are in the store, it is like they already are a customer. In a way they are. They are browsing your products and your prices, but also re-acting to any support that is offered. If it is difficult to find anything, or a representative treats them with disrespect, they go to the next place. Shops do what they can to attract you, keep you, and get you back inside. Ultimately, the customer will make a purchasing decision.
The web is very much like that, even in a B2B world. Many prospective customers come to your web site. They want to know if you have the right product or service for them.
Treat them, therefore, like customers from the beginning. Each person that lands on your digital platform, whether a website or an app, should be treated with the same respect you would give paying customers. That means guiding them along.
The problem today is that the demanding user experience issues on the web that customers expect become left aside because they do not easily correlate with ROI. This is where ROO can help.
Though some financial KPI are clearly useful for learning and improving our business, the Return On Objectives is much more appropriate and measurable when dealing with brand image, digital transformation, and customer satisfaction. Now that we can recognize our prospects as customers, some of these objectives can be:
- get more prospects onto the website (visibility and social)
- get more prospects to browse more products (e-commerce) or read more articles (B2B)
- get more prospects to contact your human salesforce (UX and influence)
- showcase more and achieve more sharing of content
These objectives can then be met through :
- The words we use
- The navigation (UX focus)
- Site Search performance
- Social media themes
- Blogging regularly
In other words, in a digital framework we can substantially lower our attention on how much money the customer spends and spend more time learning how much the relationship between the prospect and company is deepening. This is what brands must achieve today to secure their leadership position over the long-term. Further, good Return On Objective will influence positively on your short-term ROI.
In the end, you need both ROO and ROI. The point is to not forego user experience and content strategy because it is difficult to measure the return on these metrics. But if you do not consider these factors in your KPIs the risk is long-term loss of brand image and eventually being overtaken by the competition that puts the customer first. And when your customer wins, you win.
* Lee Resources : https://econsultancy.com/companies-more-focused-on-acquisition-than-retention-stats
** Forbes : https://www.forbes.com/sites/patrickhull/2013/12/06/tools-for-entrepreneurs-to-retain-clients