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By: Connie Hill, TFC President and CEO
Featured in: CEO Perspectives Magazine

At TFC, we believe exciting times are ahead for companies involved in multi-channel communication distribution. Clearly companies are faced with more challenges than ever. The marketplace is rapidly changing, brand loyalty is eroding, and marketers are required to justify dollars spent through ROI.

Creating profitable and sustainable growth requires a renewed but different high focus attention on the customer. Financial success awaits those companies willing to embrace this new marketplace dynamic with a focus on customer relationships to realize the total lifetime value of a customer. The way companies can achieve this lifetime value is through effective customer communications. What Is The New Marketplace Dynamic? We see an emerging and constant shift in the way consumers and businesses buy product and services. The buyer has more control over the advertising he or she wishes to view due to selection devices such as TIVO. In addition, retail stores and websites are flooded with product, creating too many choices for the consumer and fierce competition for shelf space for the marketer. With such abundance, the customer becomes overwhelmed with choice and information overload. The result is that brands become commodified due to minimal product variance.

How Will Companies Respond?

At TFC, we help clients understand the lifetime value of a customer. For example, an upscale car customer with a 20-year buy span (age 40 - 60) and a purchase frequency of every three years will purchase approximately 6 cars. Six cars at $45,000 per car plus maintenance of $1,000 per year for 20 years will generate $290,000 dollars in revenue. However, if this customer is satisfied with his or her experience with this car dealer, he or she will refer three more customers worth $870,000 creating a potential lifetime value of $1,160,000. Thus, smart companies will stop selling products and will start selling the customer an overall experience. The way these companies will build relationships that last a lifetime, yielding maximum revenue and profits, is by integrating effective and relevant communications through all distribution channels, including mail.

The Future Is Now!

Over the last several years, companies have put customer data accumulation systems in place to capture meaningful data on customer preferences and buying behaviors. True and deep understanding of the customers is the backbone of creating meaningful customer experience. Done right, clients can utilize mail to create relevant dialog that enhances the customer relationship and creates a true experience. In the travel industry, a personalized communication can be sent to an individual customer creating anticipation for a cruise the customer has booked. During the cruise, custom touches such as special meals or favorite activities are recommended by the cruise lines specific to each customer. Once the cruise is over, a special gift may be sent to renew the experience for the customer. Loyalty is created through relationship-building, made possible through data collection and executed as an individualized and customized communication. Thus a seven-day cruise becomes a 4-month experience.

Creating Communication Effectiveness

TFC is leader in helping clients understand the financial impact of customer loyalty and the use of relevant communication as a way to achieve it. The programs we deploy for our clients such as loyalty programs, direct response programs, continuity programs or fulfillment programs are all designed to enhance the customer experience. We recommend strategy, provide the execution and measure the results. In anticipation of this increasingly customized environment, TFC has created a unique methodology to assist clients in 1) understanding their customer 2) capturing relevant customer data 3) analysis of current communication programs and 4) implementing customized communication programs to maximize lifetime value. To support implementation of this methodology, TFC has successfully integrated analytic tools into communication programs which constantly refine client distributions to achieve greater relevancy, measured by ROI . In addition, investments have been made in automation to support 1 to 1 communications such as intelligent mail systems, digital print, and customized web tools. The goal is to create ongoing messaging that stimulates a dialog with customers to continue a relationship and achieve lifetime relationships.

Outlook 2006

This new environment provides incredible opportunity for those companies in communication distribution to help companies differentiate themselves through effective customer communication. To capitalize on this opportunity, a mind shift from selling product to selling customer experience is required. Our clients financially benefit by achieving this customer loyalty. The way to customer loyalty is through customer experience created by effective customer communication.