CLV for PR Agencies

It is pretty common in public relations agencies to see top brass taking time out to set up meetings with ‘important’ clients:

 

a.     Internally to check the ‘health’ of the account, and

b.    Externally to fortify relationship and may be raise the bar with some ‘strategic ideas.’

 

It is also very common to see absolutely no action against any of the points discussed in such meetings – both internally and externally. More importantly, some of the standard ‘strategic ideas,’ shared globally with similar clients get ridiculed at a local level with the servicing team bearing the brunt of the client’s attack. While most agencies cling on to ‘important clients,’ it is important for the team to understand that retaining the right client over time would have a positive impact on the profitability and hence the retention strategy to be adopted should be different. This implies an understanding of ‘Customer Lifetime Value (CLV).’  

 

The exercise including the visit of ‘top brass’ is usually undertaken in the name of CLV’ and often goes horribly wrong with the leaders’ tactical and disconnected approach. Instead of targeting such clients for meetings, can’t the top brass who understand each customers CLV assign a team to ensure consistency in delivery of value-added services? At a time when customers focus on the approach of the ‘servicing team’ in solving specific challenges (not the brand and its reputation), it is disheartening when the team (top brass) attempts to hard sell the brand and its methodologies. The differentiator would be in increasingly empowering the servicing team to make decisions that would raise the bar for excellence. Most agencies don’t understand CLV and be it a global account or a regional one that tries to squeeze the most out of the team, the servicing team is the same, attempting to deliver the same. The outcome is simple – dissatisfaction – for clients and the team who service them.

 

Sans any understanding of CLV, most of the agencies don’t even bother about the larger marketing objective but force fit communication strategies to address an individual’s (client) prerogative. The result is obviously short-term gains. A clear understanding of CLV would imply prioritising communication initiatives even if it means deviating from the allocated budget a wee bit.   

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Focus on the business and not the recession

While the erudite exchange views about the global economic scenario and its impact, there is no doubt that individuals will have to focus on what one could do better to establish oneself in this rapidly changing economy. Today’s economic vows flashed by the media remind me of an anecdote from Shiv Khera’s book – You can Win.

 

It is about a man who sold hot dogs by the roadside. He was illiterate, so he never read newspapers . He was hard of hearing, so he never listened to the radio. His eyes were weak, so he never watched television. But enthusiastically, he sold lots of hot dogs. His sales and profit went up. He ordered more meat and got himself a bigger and a better stove. As his business was growing, the son, who had recently graduated from college, joined his father. Then something strange happened. The son asked, "Dad, aren't you aware of the great recession that is coming our way?" The father replied, "No, but tell me about it." The son said, "The international situation is terrible. The domestic is even worse. We should be prepared for the coming bad time."

 

The man thought that since his son had been to college, read the papers, and listened to the radio, he ought to know and his advice should not be taken lightly. So the next day, the father cut down his order for the meat and buns, took down the sign and was no longer enthusiastic. Very soon, fewer and fewer people bothered to stop at his hot dog stand. And his sales started coming down rapidly. The father said to his son, "Son, you were right. We are in the middle of a recession. I am glad you warned me ahead of time."

 

At a time when companies are seeking to address (unique requirements of) maximum number of people while meeting the highest possible standards, so as to expand business and market share, individuals working in these companies should not be blinded by the opinions doing the rounds- instead focus on raising the bar for excellence.     

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Narrow the focus, better the outcome

In a world filled with options, it is difficult to choose. From buying a television to viewing channels, mobile phones to choosing the service provider, social networks and the integration platform – life isn’t easy. For marketers, it is even worse. Intense competition globally, economic downturn and the rising number of social networks are diluting brand positioning initiatives. Take the example of Yahoo, AOL or for that matter Dell. What do they stand for compared to ‘let’s google,’ about Google  and (away from the technology space) - the ‘ultimate driving machine,’ about BMW?  Nothing much except a blank expression on the respondent’s face. The diminishing brand equity could be attributed to the lack of focused and consistent brand communication initiatives from the part of these companies. In the name of visibility and positioning, it is common to see marketers going all out targeting free and available promotional channels, communicating the company’s products, services and the ensuing value proposition – resulting in unfavourable outcomes.

 

Having had the privilege to attend some high profile ‘messaging workshops,’ where in business leaders dragged themselves in only because of the presence of their bosses, it can be assumed that brand communication is still not a priority for many CXOs. A day or two of intellectual rumpus in a 5-star set up, dissection and analysis of the workshop over calls and mails followed by unending PPT mayhem – that is what happens to brand communication. The attempt -  to create an overarching message followed by sub-messages – remains in paper.  

With companies growing in size, the number of marketers also increase and the need to go-to-market to ‘accomplish’ something for their respective businesses. It is very common to hear marketers say, ‘Hey, let’s maximize the impact of this service. Let’s run a campaign in all the social networks.’ What if the social networks were to be paid for the campaign? Will the target/priority change? Unlike the traditional medium, social networks call for an engagement program and the preference to such an exercise differ depending on the target audience. In the absence of a robust social media strategy, that ensures an engagement program, companies could land into trouble as witnessed by consulting major McKinsey.  In India, global FMCG giant P&G avoided negative publicity when film personality Farah Khan tweeted about a shortage of Pampers diapers in Mumbai. Within 24 hours, P&G sent her a month's supply of Pampers Active Baby diapers. Kainaz Gazder, marketing director at P&G India, says the response to Khan's tweet is a "testament of how we are leveraging this medium to address the needs of our consumers.”

Now, how many B2B marketers can ensure a response like that?

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