Everyone and everything seems to be vying for customers’ attention these days.
Attracting and keeping the interest of existing customers — let alone acquiring new ones — is tricky for most enterprises. Modern consumers have many choices in how they spend their time, attention, and money. This makes it particularly important for businesses to be constantly on the look out for new ways to engage and retain their customers.
One powerful way to aid enterprises in this search is cross-enterprise “customer sharing” via symbiotic digital partnerships. Enterprises have long tried to upsell and cross sell new products and services to existing customers. But they can now extend these tactics through digital partnerships with other enterprises. The key difference is that the cross selling and upselling happens in a meticulous, targeted manner to the partner’s customers, through the use of big data analysis and targeted and personalized advertising.
If approached correctly, such digital partnerships provide mutual, significant benefits for all parties: not only the digital partners, but the customers, too.
For an enterprise’s existing users, this kind of partnership offers enhanced products and services that lead to a richer, more engaged customer experience. This, in turn, leads to an increased likelihood of customer retention, as the customer receives targeted and relevant offers and doesn’t need to look outside the partnership for required products and services.
Here’s an example: Users who receive targeted offers to purchase better health insurance while claiming health care cost deductions on their tax return are more likely to return to their online tax filing software. They can also expect a better offer from the insurance company, because it has access to a richer profile of the user.
This partnership model offers a cost-effective way to grow an enterprise’s user base by acquiring new customers that have been pre-validated with fully defined user models and a history of high value and sustained transactions.
Cross-Product Preference Segmentation
Enterprises need to seek digital partners with similarly segmented customer bases, such that all users in a segment share preferences for the products of all the businesses in a digital partnership. This is where data analysis enters the picture.
Cross-product preference segments are identified by observing and segmenting users by products and services that are used in close proximity to each other, both spatially and temporally. To prepare for cross-product preference segmentation, enterprises need to:
- Collect product usage data about each customer, including demographic and interest-based attributes
- Standardize the format of product usage data; for example, user name, age, gender, interests, product used, and revenue generated
- Expose customer product usage to partners through a data API
- Anonymize personally identifiable information (PII) when needed
- Import product usage data from other partners and find intersections of product usage across different data sets
- Export “intersection outputs” to generate segments in which each user uses products from several enterprises
- Sort segments by average revenue generated per user
Caution: Don’t Upset Your Customers
Enterprises should enter digital partnerships to cross sell and upsell to each others’ customers, but this comes with a warning: they should be careful not to spam their most valuable and engaged users. To prevent this, enterprises should carefully segment their users by their stage in the customer lifecycle.
A company also needs to ensure that the sharing of users for up-sell and cross-sell opportunities is calibrated appropriately and leads to a partnership of equals. This also serves as a quality check on the process — enterprises need to ensure that they don’t create poor user experiences because of the actions of another enterprise in the digital partnership.
The goal is to enhance the experience of your most valuable users, not to diminish it.
A map of the customer lifecycle stages can be generated by first capturing all instances of user engagement with a product or service and then defining business rules that get applied by a big data processing engine.
The business rules define a set of activities and, more broadly, behaviors for every stage in the customer lifecycle such as new users, active users, engaged users, and abandoned users.
Complement Your Products
An enterprise needs to understand which products or services are complementary to its own. In other words, which products and services can enhance or even complete the experience of the user? This analysis is called the “product adjacency list,” and is defined for each user segment. This qualitative analysis returns useful information to inform potential partnership discussions.
Forge the Digital Partnership
The purpose of the digital partnership is to enable enterprises to share access to high-value, engaged users to solve their customer acquisition problem and offer such users highly targeted and enhanced products and services.
However, successful partnerships should follow several key guidelines:
- Equitable exchange of access – A partnership of equals mandates access to each other’s users, where the “shared” users are of equally high quality, type, value, and lifecycle stage.
- Stringent quality control – Access to a partner’s users needs to be tracked and verified to ensure there is no inappropriate usage
- Data APIs and governance – Access to usage data should be exposed as an API to ensure easy experimentation and adoption. Access to the user’s views of the partner’s offers should also be API accessible.
- Data-validated upsells and cross sells – Up-sells and cross-sells delivered to a partner’s customer base should be validated as being either on the user’s product adjacency list or in the supplementary or complementary product graph of the enterprise.
- User feedback loop – Users should easily be able to opt out, suspend, or provide feedback on the quality of the up-sells and cross sells to enable the partnership to improve and become increasingly beneficial for both parties.
Symbiotic digital partnerships that offer users better products, services, and complete experiences and don’t leave users feeling spammed or violated offer a sure path to success for both participants in a digital partnership.
When driven by APIs, partners can experiment and innovate; they can create mash-up products and services, exchange user data securely and easily, and benefit from deep analysis of user behavior. This enables these partner companies to delight their customers while making their products and services sticky and driving mutual business value.