THE FUTURE OF CUSTOMER RELATIONSHIPS -LIFETIME VALUE AS AN ASSET

CHRIS GREENWOOD SENIOR TOURISM INSIGHT MANAGER

WALLACE MONUMENT

POWER OF DATA, STIRLING – MAY 2019

LOYALTY IN A FICKLE WORLD

• Successful businesses are built on developing customer loyalty.

• Research demonstrates that customer retention has a lower outlay and higher value than customer acquisition.

• What is it worth to build customer loyalty over attracting new customers?

CUSTOMER RELATIONSHIPS AS AN ASSET

BEGINNING WITH SOME FACTS

60-70% – Probability of selling to an existing customer

5-20%– Probability of selling to a new prospect

10 times– How much more a loyal customer is worth compared

to their first purchase

25%-95%– Potential increased profits by raising retention rates

by 5%

6-7 times– How much more expensive to acquire a new

customer than keep an existing one

89%– Of companies see customer experience as a key

factor in driving loyalty and retention

CUSTOMER RELATIONSHIPS AS AN ASSET

COWANE'S HOSPITAL IN THE OLD TOWN, STIRLING

BEGINNING WITH SOME FACTS

29% – Volume of visitors who have holidayed in the

Stirling area before and wanted to return.

24%– Volume of visitors who have holidayed in

Scotland before and wanted to return.

64%– Of visitor survey respondents rated their overall

experience of Stirling 9 or 10 out of 10 (average score 8.8/10)

68%– Of visitor survey respondents are extremely

likely to recommend Stirling as a destination –based on a rating of 9 or 10 out of 10 (average score 9.1/10)

CUSTOMER RELATIONSHIPS AS AN ASSET

THE OLD TOWN JAIL

THE TYRANNY OF CHOICE

• Does greater choice encourage disloyalty?

• Research shows that there can be too much

choice.

• The evidence was in the Jam….!

• The idea of freedom of choice is appealing

but

• Consumers welcome direction of decision

making.

CUSTOMER RELATIONSHIPS AS AN ASSET

JAMS AND PRESERVES AT THE HOUSE OF BRUAR

MOST EFFECTIVE CHANNELS FOR ACQUISITION AND RETENTION

CUSTOMER RELATIONSHIPS AS AN ASSET

Channels used most for Acquisition

Channels used most for Retention

Websites 89% Email 56%

Email 81% Social Media 37%

Social Media 72% Content Marketing 32%

Direct Mail 66% Referral Marketing 26%

Search Engine Optimisation 65% Search Engine Optimisation 13%

Web Banners 60% Display Advertising 12%

Mobile Devices 34% Mobile Advertising 8%

JUDGING THE LIFETIME VALUE OF

CUSTOMERS

CUSTOMER RELATIONSHIPS AS AN ASSET

THE FALLS OF EDINAMPLE

RISE OF THE POST-DEMOGRAPHIC CONSUMER

The road to self-fulfilment

Destination is a backdrop to fulfilling our objectives

• Experiences over Possessions• Demand for Personalisation• Personal Fulfilment is increasingly a

driver for decision making: • Challenges• Wellness/Betterness/Mindfulness• Family & Friends• Peregrination

Icons by Adioma

CUSTOMER RELATIONSHIPS AS AN ASSET

ITS NOT JUST IN THE NUMBERS.• Focusing just on profitable customers may be

counter-productive.

• Measuring Social Impact and Social Influence is also important.

• On average 1 dissatisfied customer tells around 9-15 people.

• 13% of dissatisfied customer tell more than 20 people.

• And then there are online reviews…

CUSTOMER RELATIONSHIPS AS AN ASSET

THE THISTLES SHOPPING CENTRE IN STIRLING

EXAMINING CUSTOMER VALUE & LOYALTY

CUSTOMER RELATIONSHIPS AS AN ASSET

THEY’RE LOYAL TO THE BRAND

THEY PAY MORE

THEY BUY MORE STUFF

OUR VALUES & PERCEPTION OF LOYALTY

THEY RELIABLY COME BACK TO US

01

02

03

04

Our Customers

become much more

valuable when…?

EXAMINING CUSTOMER VALUE & LOYALTY

CUSTOMER RELATIONSHIPS AS AN ASSET

12

3

45

6

7

They share their data

They collaborate with us

They eulogise for us on social media

They provide referrals and recommendationsThey reduce our costs

They give us good ideas

They try new products

SHARED VALUES & PERCEPTION OF LOYALTY

QUESTIONS TO ASK YOURSELVES…

CUSTOMER RELATIONSHIPS AS AN ASSET

Think about the sentences –

“Our best customers become much more valuable when…”And

“Our typical customers become much more valuable when…”

IN CONCLUSION

“The best investment you can make in

measuring customer lifetime value is to make

sure you’re investing in your customers’ lifetime

value.”

Michael Schrage

MIT Sloan School’s Centre for Digital Business

CUSTOMER RELATIONSHIPS AS AN ASSET

COURTYARD AT STIRLING CASTLE

THANK YOU

QUESTIONS?

CUSTOMER RELATIONSHIPS AS AN ASSET

STIRLING BRIDGE