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D. Murali

SURVIVAL is at stake, so the big businesses have embraced a new concept called `lifetime marketing.' Whose lifetime, you may ask? Of customers', naturally, because only then there'd be some life left in company financials. "Lifetime marketing (LM) is about treating customers as if each one of them is your most important customer, offering customers high value in products and services, and rewarding them for their business in order to earn a lifetime of their loyalty," defines Jeanette Maw McMurtry in Big Business Marketing for Small Business Budgets, from Tata McGraw-Hill (www.tatamcgrawhill.com) .

Forget about size, and rethink your marketing, because the rules have changed. Don't talk, therefore, about `general public,' `mass market,' or `single message or promotion for all.' What then? "There are only individuals who want options, service, value, rewards, and recognition." The challenge now for small businesses is "to offer the same level of customer management as large businesses." And, it's possible, assures McMurtry.

Where do you start? With a reverse telescope because you have to see your business "from the outside in" and find out "what influences your customers, what emotions drive their decisions and why they seek specific brands." Else, you'd be hit by the `eight primary reasons' that make marketing plans flounder. These are: egocentricity, overreaching, overbearing, nebulousness, ownership void, being out of site, budget mania, and immeasurability.

Is mass advertising irrelevant? No, it's useful for `brand maintenance' and achieving `mind share.' But `strategic value' is absent in mass ads, for they're seen more as `entertainment' and people soon forget the associated brand. Ineffectiveness is because companies let ad agencies take charge of marketing efforts, focus shifts "from sound business plans to personal agendas of achieving recognition for creative brilliance."

Beware the `award factor,' McMurtry cautions. Ad agencies that line their walls "with plaques and trophies" tend to forget clients' goals of "selling more products and building brand equity", and present "very clever, fresh advertising ideas" which, if you end up approving of in a moment of weakness, go on to win awards and just entertain.

Once you launch yourself onto LM, the author would guide you to calculate LTV or lifetime value. "For example, if the average net present value per customer transaction for your business is $20, and the average customer makes three purchases a year, you have a $60 annual value per customer. If a customer's purchase lifetime expectancy is 10 years, that customer represents a profit of $600 over his or her lifetime." Customers should perhaps think of computing lifetime cost!

It is fashionable to talk about demographics but you need to look beyond that, counsels the book. So, if your goal is lifetime value, "identify your most valuable customers" as Step 1. This is RFM analysis about customers who purchased most `recently', and most `frequently' and spent the most `money.' They're your "greatest revenue stream." Step 2 is to build customer profiles that include information on demographics, geo-demographics, consumer orientation, generational influences, category cycle and market adaptation cycle.

In a different chapter, the author identifies what's missing in the `Four Ps' - product, place, price and promotion. Add a C for `customer perspective' in each of the Ps, she advises. "This concept seems so obvious, yet it is amazing how often it is missed."

The book also has tips on applying lifetime marketing techniques to traditional communication vehicles. Thus, design your mass ad "as if it were being sent only to your most qualified prospects." And direct consumers to your Web site where you can tell them more and also collect `valuable customer data.'

A small book with big ideas.

BookMark@thehindu.co.in

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