The question of how best to contact high value customers, how often and when, is very important for customer relationship managers, particularly when it comes to the sale of loyalty-inducing schemes such as season tickets or membership schemes. Season tickets or annual memberships are an important source of revenue for many service-based organisations such as sports clubs or art venues because they not only translate into predictable revenue for the organisation, but they also lead to additional visits and the subsequent sale of ancillary products such as food and beverage, merchandise or parking.
So, it was with some interest that I came across research that Morris George and Kirk L. Wakefield conducted with the NHL, looking at the customer journey of season ticket holders. The findings from the research are reported in the paper entitled “Modeling the consumer journey for membership services”, published here (paid access, only).
Among the interesting findings reported in the paper, one that I found particular interesting was about the interplay between method, frequency and timing of contact with customers. Specifically, the authors found that, in isolation, neither face to face nor e-mail contact had a significant impact on convincing customers to buy season tickets. In fact, the impact of face to face contact on loyalty followed an inverted U-shaped curve. That is, initially, face to face contact had a positive but small impact on sales but, after a certain number of times, it had a negative and significant impact of sales of season tickets. Contact by e-mail alone had a small but negative effect on season ticket sales. However, when face to face contact by a salesperson was used in conjunction with e-mail contact, there was a positive and significant impact on sales of season tickets.
Even more interesting, in my view, was the effect of timing of contact on season ticket sales. Here, there were two effects to take into consideration. One is related to consumers, and it is the point at which the customer needs to make the decision. The other is related to the organisation, and, in this case, concerns service quality (in this case, the performance of the sports team).
In terms of the decision time, George and Wakefield found that contacts at the end of the season (i.e., closer to the decision time for renewal / purchase) significantly increased the likelihood of converting the customer to season ticket holder. Contacts at other times are likely to be seen as nuisance or to be ignored.
In terms of service quality, the paper reports that conversion was much more likely when the team was performing well. This may be because emotional involvement and satisfaction are likely to be high at those times.
In summary, CRM teams should focus their effort on those times when consumers are most likely to be weighing the decision to upgrade or to repeat their purchase, and when customers are most likely to be happy with the service obtained; and they are advised to use a mix of contact methods.
There are other organisations that benefit greatly from converting individual purchases to regular, committed ones. For instance, cleaning services would want to get customers to commit to a regular contract rather than individual bookings, while charities would want to turn one off donations into monthly contributions via direct debit. This paper’s findings mean that the cleaning service should suggest sign-up to the regular / package purchase after it finished cleaning the property. But what would be a moment of ‘satisfaction’ for a charity, especially those dealing with credence services such as vaccination or crime prevention programmes?
Ana Canhoto 