info@safllc.com +1.203.255.0505

Improving Acquisition Success in Family Offices

by | Mar 15, 2023 | Customer experience, Marketing and strategy, Marketing research

In the acquisition process, revenue metrics are critical to assess business value. However, the need to assess customer health is often overlooked. In customer-facing businesses, this is especially dangerous.

Without a clear “line of sight” into customer satisfaction and retention, an acquiring company (e.g., family office, VC, or angel investor) may overlook evidence that indicates an acquisition may not result in incremental revenue or synergy with existing businesses.

For businesses that are sold using a revenue multiplier, a significant miscalculation can result in a lower exit price. Both family offices and business owners do not realize the hidden factors that can negatively impact a sale. As the deal size grows, those risks increase.

Conversely, hidden positive factors can surprise to the upside, and support a significantly better acquisition price or sales story. As part of an acquisition and revenue assessment, looking at the entirety of your customer or user base is essential to understand the real value of the business now and into the future.

Who benefits from a revenue and customer health assessment?

Investors and family offices of every size can benefit, but there are three distinct beneficiaries of a revenue optimization and customer health assessment when a business is bought or sold. They are:

  • The business owner who wants to maximize his or her exit value.
  • The potential buyer (family office, angel investor, or VC) who wants to minimize the price paid.
  • Another party who may be in dispute with the owner, and who wants to minimize the price that they pay (or conversely, maximize their ownership share of the business).

Conflicting interests can be addressed through a well-executed revenue and customer health assessment using research. The approach used by Surveys & Forecasts, LLC evaluates revenue potential and customer health in a systematic and independent manner:

  • We employ a variety of tools to estimate prospects for growth, forecast volume, share, and satisfaction.
  • We profile relevant products, brands, and services to assess your competitive position.
  • We combine findings to provide an unbiased estimate of revenue potential. We can combine this with financial professionals who have the tools to assess performance in the absolute and relative to a peer group.
  • We work with clients on a per project or ongoing retainer basis to provide guidance and market intelligence for the business.

Additional detailed information can be found here, To discuss whether a revenue optimization and customer health assessment is appropriate for an acquisition your office is considering, please get in touch at info@safllc.com or at +1.203.255.0505.

Customer Value vs. Valued

by | Sep 20, 2021 | Customer experience, Customer satisfaction, Marketing research, NPS, ROAS, ROI

Customer Valued?

In our age of automation and AI, marketers risk becoming detached from how their business practices, products, and services are perceived by their customers. Marketers have it all wrong by focusing solely on customer satisfaction or a willingness to recommend: these measures do not capture the customer’s relationship-based perspective. Customer satisfaction or willingness to recommend are thin, shallow, “last click” based, and largely transactionally-oriented.

The customer can be momentarily satisfied with their last transaction (product or service): it delivered a promised benefit. But that is, by definition a transactional experience, and often devoid of any emotional richness.

In working through these distinctions with our clients, the notion of customer value (or customer lifetime value, aka “CLV”) can be the polar opposite of whether the customer feels valued.

From a financial or marketing perspective, a company’s approach to customer value is formulaic: extract maximum value from the customer. The metrics take many forms: ROI, ROAS, narrowly targeting, and upselling to name a few. But this “share of requirements” approach (i.e., siphoning off more revenue from the same customer) is entirely transactionally driven. There is no “emotional stickiness” created with the customer from a single transaction, or even from multiple successful transactions.

From the customer’s perspective, feeling valued creates an emotional connection which is deeply internalized and an incredibly powerful sticky magnet for retention.

As a CMO, how would you answer this question from the customer: “Does this company appreciate my business?” If you don’t know, consider path-to-purchase or other in-depth insights work. Test new programs. Test reward structures. In what ways can your company demonstrate to the customer that their business matters – that they themselves are valued?

Even highly satisfied customers can be quickly dislodged by a competitor who can, for example:

  • Offer products at a lower price
  • Offer products with more features/benefits
  • Offer products that appeals to more users
  • Offer products that have more use cases
  • Deliver products in less time
  • Leverages variety-seeking behavior or changing tastes

In email automation and drip campaigns, we have learned that with more personalization comes better response – and a greater likelihood of consumers responding to offers. But everything now comes through as personalized (except for the occasional misfire, like “Dear {FirstName}”), which slowly erodes that competitive edge. But all of this plays in the transactional space, devoid of motivation or emotion.

In our client work on customer value, we have noticed that measures related to the customer’s perception of his/her worth to the company is a far better predictor of customer retention than “shallow” measures of satisfaction or willingness to recommend. One measure (NPS), in particular, is especially weak in this area. Correlations with purchasing are always the lowest. This really should come as no surprise, since it is a thin ‘report card’. Management teams gain some comfort by following the herd who also uses NPS, but it provides little actionable insight into the underlying value equation.

We urge CMO’s and marketing leaders to think about longer-term results and to focus on the customer’s perception of their relationship, rather than the transactional value extraction approach embraced by many marketing organizations today.

As Peter Drucker famously noted, the purpose of business is not to make a profit; it is to create a customer.

Relevance – The Missing Ingredient in Digital

by | Aug 17, 2021 | Communications, Customer experience, Strategic research

image young woman

A quick Google search of the words “relevance” and “marketing” turned up very few useful or informative hits. I found this surprising. Too much digital communication (email, banner ads, YouTube teasers, etc) fails to connect to the consumer in a meaningful, relevant way, which I classify as:

  • Emphasis on noise over meaningful communication (“spray and pray”)
  • Failure to truly understand the decision maker’s pain points
  • Absence of clear product differentiation in communication
  • No linkage between pain points and solutions offered by the marketer
  • Missing emotional connection with the decision maker

Relevance can be a squishy term because what may be relevant to the marketer is not necessarily relevant to the consumer. Too much digital content is devoid of the connection between the product (or service) and real customer needs. Advertising language is often lifted from the marketer’s vocabulary and not from the customer. That’s because no one has bothered to speak to the customer to hear what is relevant. The approach is “Here are the facts – the consumer will obviously get it!”

In digital, we hear about “performance marketing” and “brand marketing”, and these are certainly useful constructs in the business of optimizing digital spending, but more fundamentally we are missing major opportunities to demonstrate our role as “market makers” between customers and sellers. Marketers assume that all features or characteristics are relevant, when in reality too many are not.

Many advertisements on YouTube, for example, don’t connect because the narrator or situation fails to describe the product or link to an end-benefit (even after our attention exceeds the first 5-10 seconds). The same is true for linear or embedded ads on TV or radio. The branding is often held back until the very end. At that point, the advertising has either served to confuse the viewer or waste their time by failing to connect any relevant branding with the story that that was told in the previous 25 seconds. In many cases the storytelling or virtue signaling is more prominent than the brand itself. The consumer must process images, messages, and a story line into something personally relevant that then, in turn, must somehow be linked to a brand benefit. Automobiles, pharmaceuticals, and health care advertising frequently wander into these dead ends. This approach is a complete waste of ad dollars.

Conversely, some features are immediately relevant because they connect to obvious end-benefits. Amazon’s One-Click checkout feature or FreshDirect’s automatic re-ordering are great examples. They mimic the in-store checkout experience: I hand my credit card to the register clerk and don’t have to think again. Amazon and FreshDirect don’t have to talk about it: One-Click has multiple end-benefits: I don’t have to fumble for a credit card, enter a delivery address, and my window is already known. In short, I don’t have to think at all – and can get back to the more important work I was doing before I placed my order. Amazon and FreshDirect become directly relevant because they save me time – something of great value to us all.

Industry experts, the Advertising Research Foundation, and others all generally agree that content and creative account for as much as 70% of the impact of advertising. Too many of us are focused on the shiny object of ROI and targeting, when in reality what consumers want is something that is relevant and meaningful and that makes their lives better.

Don’t forget this fundamental tenant of advertising: do your research, uncover unmet needs, and make it relevant!

Simple Guidelines for Advertisers in the Age of Coronavirus

Simple Guidelines for Advertisers in the Age of Coronavirus

by | Mar 31, 2020 | Communications, Customer experience, Emotion

The stream of COVID-19 email communications continues to spill over the transom with messaging that is marginally helpful in many cases, and often unnecessarily complicated, confusing, and unhelpful.
 
Below are five simple areas to focus on in your messaging to consumers during this most difficult time of social distancing and self-isolation. Keep them in mind and test your communications and messaging against them. They will hold you in good stead with your end consumer, whether they are a business buyer, industrial buyer, or everyday consumer.
 
Do your best not to stray from these simple principles, and consumers will remember you for being thoughtful and direct with them during one of the most confusing times of their lives.
 
Brevity — be brief. In times of crisis, people seek clarity and precision in the messages they receive. Buyers are in a state of some fear, uncertainty, and anxiety. Fortunately, most people have kept their cool: we have not seen widespread panic. However, the stress level is only going to grow as we move through April-May 2020. What people need most is clear and relevant messaging from you. They have neither the time nor interest in reading voluminous messages from companies with whom they may only have a glancing relationship. If you are sharing information about your hours, accessibility, call centers, ordering information, shipping times, or things that may interrupt the consumer’s experience with your company, these are relevant. In all other cases, be pithy; a few key sentences will do.
 
Empathy — this period of quarantine and self-isolation is extraordinary. Most “non-essential” work has ceased. Convey genuine concern for your customers, because they are being held prisoners in their own homes. People are able to venture out for food and medicine, but they are not permitted to visit loved ones, attend events, or be present for life’s special moments. Fathers can’t be with their wives during childbirth; visiting elderly relatives in nursing homes is prohibited; scheduling or attending a funeral is restricted. Personally, a family member cannot be admitted to the nation’s leading cancer center because it is not is not accepting new patients. These are real life and death disruptions. Your product or service is simply not at the top of your consumer’s priority list.
 
Selflessness — set aside the need to make a sale. Sales will return (eventually) but right now your customer is in distress. Demonstrate compassion by extending your brand, product, or service in a way that puts the customer first. Sponsorships and branded efforts are fine, but don’t let them get in the way of the greater goal. Perhaps you won’t make a profit, or may even lose money. Think instead of the total cost vs. overall impact: it may not be measurable. If you have extended yourself selflessly to your customer, with no expectation of a reward, that still builds value. Ask yourself what is it that you are doing to help your fellow citizen. Are you part of the larger need to step outside of your business to help others in distress?
 
Consistency — Be consistent in the message you deliver in your communications to the customer across all assets (web site, email, addressable media, or broadcast). Do not vary the core elements of your messaging from day to day, and get it right the first time. Be on point with not only what you are saying, but also doing, as well as the tonality of your communications. For now, set aside brand, product, or performance messaging; this will eventually return. Traditional messaging is secondary to the more important aspect of shared sacrifice and being supportive of your consumer in a time of stress and uncertainty.
 
Reassurance — We look to government leaders for guidance and reassurance that things will get better, and that the shared sacrifice will be worth it. Consumers also need leadership from the companies that they do business with. This includes the brands they use and trust. A reassuring message from one brand may not (alone) be able to penetrate the swirl of confusing messages that consumers are receiving. However, brands collectively can break through and make the consuming public less anxious and agitated. We are, in every respect other than bullets, in a wartime footing against an invisible enemy. Stop thinking in the traditional way, and focus on the greater good, and on what matters to all citizens during a time of national (and global) crisis.

These five simple rules will hold you in good stead with your consumer. As David Ogilvy once quipped (and I take liberal license): the consumer is not an idiot — the consumer is your wife, husband, brother, sister, son, daughter, uncle, aunt, neighbor, and friend. Your job as a marketer is to use your vast skills and resources to make your end buyer understand that you are doing whatever you can to make their lives easier during this difficult time.

They won’t forget it.

Thoughtful Communication in a Time of Crisis

Thoughtful Communication in a Time of Crisis

by | Mar 18, 2020 | Communications, Customer experience, Emotion

Every day I receive a deluge of email from companies with whom I have a glancing relationship, yet seem compelled to assure me about their healthy operational status during our shared Coronavirus pandemic.

They breathlessly promote their products and services and go out of their way to reassure me that their services are available for purchase. Perhaps they are getting it all wrong: I’m not alone in this perception.

 
In the stampede to reassure me that their businesses remain uninterrupted, what are they really saying? They are telling me that they are mostly concerned about the impact on their business, and the disruption to their revenue and operations. Unintentionally, they have delivered a pandering, grasping, and self-serving message that conveys how little they care about the customers they serve.
 
On the one hand, it is understandable: Coronavirus has the world and virtually all marketplaces turned completely upside down. This massive disruption to our life and economic well-being is extremely upsetting. On the other, companies have an obligation to communicate to their customers in a way that focuses on them, and not on the operation of the company, its products, or its services. We assume that companies are already doing what they can to remain operational. We do not need to receive dozens upon dozens of emails to point out the obvious. What we do need from marketers and advertisers is a complete shift in strategy – from an “all about me focus” to a “fellow citizen focus”. What might this look like?
 
I listen to (and highly recommend) the Research Business Daily Report (RBDR) on the marketing research and analytics industry, and most recently listened to media researcher Bill Harvey about his ideas on thoughtful messaging adjustments during this worldwide pandemic. Bill founded Research Measurement Technologies (RMT), a pioneer in media measurement. He points out that advertisers need to pivot to quality of life advertising – and away from the advertising of features and benefits.
 
More than ever, advertising and messaging need to convey shared ideals and motivations. What are the areas of overlap between a brand and its customers? How can we as marketers build relationships with customers based on motivations that are positive and uplifting?
 
Over the years Harvey identified 15 motivational drivers, similar (in principle) to Abraham Maslow’s Hierarchy of Needs developed in the 1940s. These motivational drivers exist, more or less, in all of us. They are:
 
• Achievement
• Aspiration
• Belonging
• Competency
• Creativity
• Experience of life (including sex)
• Fitness
• Heroism & leadership
• Love
• Power
• Security
• Self-knowledge
• Self-transcendence (or altruism)
• Status
• Success
 
Advertisers would be well-advised to investigate how they can incorporate some of these fundamental human motivators in their messaging and advertising right now. If you are solely focused on features, benefits, usage situations, or problem-solution messaging, chances are that those messages will be ignored because your consumer is primarily focused on health, sustenance, shelter, and survival.
 
Are you simply marketing your product or service as usual? Are you using your messaging during this pandemic to pat yourself on the back, or check the box with IR or HR? Or are you really, really in the trenches with consumers, psychologically lifting them up, and making them feel like you care about how they are doing? Ask yourself: are you being genuine?
 
If your answer to the last question was no, then you need to rethink your entire communications strategy for the foreseeable future. In a world of pandemics and unpredictable externalities, no one cares if Product A removes stains better that Product B.
 
Consumers already assume that your product works. What they really care about is whether you believe what they believe.
 
So, what is it again that you believe?
Surveys & Forecasts, LLC