How Social CRM Can Help a Business in China Convert a Customer
The economy in China is full speed ahead. It’s the only major economy to have avoided a contraction during the Covid-19 pandemic. By 2028, China is expected to overtake the United States as the world’s largest economy. But as I argued in a recent blog post, businesses aren’t going to enjoy the fruits of this economic turnaround unless they master a fundamental challenge: understanding how to connect with the Chinese consumer. To do that, they need to harness the value of first-party customer data along the entire customer lifecycle. Let’s take a look at an example to illustrate the point.
The Customer Lifecycle
In my last blog post, I asserted that businesses need to understand their customers in context of their entire lifecycle instead of treating customer interactions out of context, and that’s especially true with the multi-channel consumer in China.
The customer lifecycle refers to the relationship between the customer and the brand, from birth and growth to death. Specific to different industries, there are different definitions, in the retail industry, can generally be divided into Anonymous Customer, Window Customer, First-Time Customer, Repeat Customer, Loyal Customer, Indecisive Customer and Lapsed Customer. This graphic illustrates the lifecycle:
A retailer or CPG brand needs to customize its complete customer experience – not just its messaging – based on whether a customer is forming a relationship with the brand, continuing to consume its products, or possibly leaving the relationship – a reality that businesses must plan for, not fear. The key is to develop a strategy ad personalize the experience and depending on where the customer is.
Example: Taste of Su
For today’s post, I am going to show you how a business might convert a “window customer” (as defined in the graphic above) to a first-time customer (also defined above) by nimbly managing first-party data. For the purposes of discussion, I’ve created a hypothetical example, Taste of Su.
Taste of Su is a fictitious clothing retailer in China that targets customers by offering tailored and elegant Qipao for working professionals. Taste of Su has user touchpoints on RED, WeChat, Tmall, JD, WeiBo and Brick-and-Mortar stores. In addition, Taste of Su’s fashion advisors in brick-and-mortar stores offer personalized services to customers. That’s because Qipao is a specific product at a higher cost and requires fashion advisors to influence customers.
But Taste of Su has faced some challenges in the past:
- Siloed Data and Lack of Customer Insights – Taste of Su has data from different touchpoints and spends a lot of budget to maintain the data. But the data doesn’t produce any actionable insights for the business.
- Inconsistent online and offline experiences– customers are not able to get a personalized fashion advisory online, and brick-and-mortar stores do not have enough customer traffic.
- High cost on ads and lack of self-owned data – Due to the garden wall from eComm platforms like Tmall and JD, Taste of Su doesn’t have the granular level of customer data and ads spent is high on these platforms. The Cost per acquisition is increases over years.
Taste of Su seeks to overcome those challenges with a robust marketing enablement program that includes:
- Building self-owned data - Repurposed WeChat OA and enabled Mini Programs with event tracking.
- Enabled Membership and loyalty programs.
- Enabled CDP (Customer Data Platform) by unifying Tmall, JD, WeChat, CRM, DW, and brick-and-mortar stores.
- Marketing Automation to enable the customer lifecycle management.
Once Taste of Su feels confident it has set itself up for success with marketing enablement, the company is ready to launch a new customer program. Its purpose is to acquire new customers from both online and offline, nurture the relationship from window customer to the next stage – that first-time purchase customer described above. Here’s a bit more context about Taste of Su’s aspirations:
Taste of Su’s ideal customer is affluent and eager to build her professional career. She is conscious of how style influences her professional image. She is a perfect match for Taste of Su. Let’s call her Nancy. Nancy lives on popular apps WeChat, Red, and Bilibili. She shops online and offline. It just so happens that Nancy is shopping with her friend Lizzy at a department store on a Saturday afternoon. She’s seeking to find the right outfit for an upcoming event. Here’s a little bit more context about her and her needs:
Now, she visits a Taste of Su store with her friend Lizzy. Here’s what happens next:
- Nancy becomes interested in a Qipao. A Taste of Su store advisor, hoping to lock in a first-time customer relationship, offers the new customer program benefits to both Nancy and Lizzy. Nancy could get 10% off when she signs up for membership to the Taste of Su customer loyalty program on WeChat. This offer appeals to the cost-conscious Nancy, and, of course, she’s already on WeChat.
- The store advisor plays another card based on Taste of Su’s referral program: if Nancy also invites Lizzy to the membership, both Nancy and Lizzy can get a 20 RMB voucher for the next purchase. Although Lizzy does not join the program, she follows Taste of Su on WeChat.
- Nancy places an order to get her 10% off. She receives a thank-you notification on WeChat. In addition, Taste of Su segments Lizzy in the “Hi-Po” young professional customer segment. Within 24 Hours, Taste of Su sent a personalized message to Lizzy via WeChat to welcome her to join the follower group. She also receives a recommended Qipao story as well as key scenarios when Qipao is making a difference.
This illustration gives you even more detail about the journey:
So, what has happened here? Two things:
- Nancy has progressed from a window customer to a first-time customer.
- Lizzy is now a window customer.
Wrapping It Up
Taste of Su leveraged Digital Marketing Technology to unify the different user touch points to create more actionable data - ideal customer persona, customer profile, customer journey and behavior.
The data are applied in personalized ads/store step to acquire the right customer more effective, the right promotions are defined to convert the customers from window customers to first time customers, Personalized and automated engagement to nurture the customer relationship in the first 72 hours to institute higher conversion rate.
It’s a starting journey only for Taste Of Su, they are planning to add WeChat Work to their digital ecosystem where their store advisors can provide more advisory and assistance to their online customers. Afterall, Qipao is a high-price, low-frequency product. Advisory plays an important role before and after the sale – e.g. the matching accessories, clean and maintenance. Eventually customer stickiness is the key to retain customers and drive more referral.
How Pactera EDGE Can Help
The first step to managing the customer lifecycle successfully is to get your first-party data right. Doing so means taking a sample of that data and understanding how it applies in context of the customer journey to make the data meaningful. With our test-and-learn culture, we start small and ideate in a way that mitigates both cost and risk.
We, at Pactera EDGE, are here to help you realize a quick win with your data by building your customer persona and applying data across the entire customer journey.
Our service offering encompasses:
- China Customer and Local Ecosystem Strategy.
- WeChat Platform Design, Development, and Optimization.
- Digital Platform Engineering.
- Social Commerce Strategy and Activation.
- Unified Customer Data and Marketing Automation.
- Advanced Analytics and Business Intelligence.
Contact us to learn more.
About the Author:
Zhenhua (Spring) Wu is an Associate VP with 17+ years of experience in Digital Enablement & Transformation, Marketing Technology, Cloud Technology, China Market and Program Management. He heads Pactera EDGE’s China Market Enablement practice and has helped many enterprise brands use technology to gain a better understanding of Chinese consumers.