How big a problem are lapsed customers for most home retail brands? Well, analysis of transactional behaviour across 208 home shopping brands reveals that roughly 40% of the average retailer’s “lapsed” customers are still buying from its competitors. Add to that the fact that Frederick Reichheld, founder of Bain & Company’s loyalty business and author of seminal books The Loyalty Effect and Loyalty Rules, has found that it costs at least five times as much to acquire a new customer as it does to retain an existing one, and it becomes clear that this is indeed a significant isse for many home shopping brands.

So what should retailers be doing about it? That all depends on how far your company has got in establishing a programme and strategy for reactivating lapsed customers. For those organisations that find themselves, largely, starting from scratch in establishing a plan for identifying lapsed customers and reactivating them, we have Launching a Customer Reactivation Programme, which takes you through the fundamentals of implementing a win-back programme that works for your business. For those that have a basic programme in place but want to hone their reactivation activity and get even better results, we look at what they need to do in Ramping up your Customer Reactivation Strategy.

In these tough economic times, every business needs to  look at whether it is doing all it can to retain its existing customers and getting the most out of activities aimed at keeping all customers – especially the best customers – loyal to the brand.

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The report looks at the importance of using customer data responsibly and maintaining trust in order to retain customers and uphold profitability, and the findings make very interesting reading:

• 83% are likely to switch to a competitor if they feel a company is ignoring their personal details and just sending them blanket marketing messages
• 69% can recall an instance in the last 3 years where they have switched to a competitor because of the way their data was handled
• 76% are more likely to buy from a company than its competitors if it is using their data to personalise offers or service

Perhaps the most powerful finding is this: 95% say they are very likely to turn to a competitor if they feel a company is being irresponsible with their personal data. The results are clear for the second year running – mishandling data kills customer trust, and conversely the careful and intelligent use of customer data will engender confidence.

Download the full report below.

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In joining the fraud services team, Prince and Gunby will be tasked with supporting the continues development of fraud products and services, including our ClaimsID solution.  Gunby will be primarily focused on retail clients while Prince’s remit will also include insurance, as well as finding NCOA Alert prospects – those clients who can use Royal Mail’s National Change of Address data as part of their consumer ID screening process.

Prince comments: “I am pleased to be joining Transactis at such an exciting and pivotal time for the fraud services team. With the UK economy still experiencing losses in excess of £30 billion in public and private sector fraud each year, it is clear that existing solutions are some way off fully addressing the issue. In particular, fraudulent Goods Lost in Transit claims and the overall management of GLIT processes are a growing problem for many retailers, with more and more sales coming from ecommerce activity. False GLIT claims come with a number of hidden costs and should not be tolerated by any business.”

Click here to download the full press release.

More information coming soon!

]]> http://www.transactis.co.uk/blog/company-news/02-2012/patrice-bendon-joins-transactis/feed/ 0 http://www.transactis.co.uk/blog/company-news/02-2012/levers-for-growth-in-home-shopping-event/ http://www.transactis.co.uk/blog/company-news/02-2012/levers-for-growth-in-home-shopping-event/#comments Thu, 16 Feb 2012 15:31:44 +0000 Jen Allen http://www.transactis.co.uk/blog/?p=465 Levers For Growth in Home Shopping

8^th March, 2012, London

Innovative techniques and winning strategies to drive increased demand in 2012

Transactis have teamed up with four other leading marketing service organisations to create this seminar, focused solely on how retailers can use the latest insight techniques to increase their customer base and get the most from their campaign activity.

This unique event will provide 25 marketers from the home shopping sector with direct access to five leading analysts and practitioners, brought together to discuss where the opportunities for growth lie in 2012 for this fast-moving, dynamic sector. Transactis are delighted to be speaking alongside RedEye and TCP Marketing Solutions. Michael Green, our Insight Director, will cover topics such as:

 - Integrating market-wide data sources

 - Integrating multi-channel data sources

 - Using dynamic data to drive more profitable campaign activity

 - Case studies from leading home shopping brands

Chaired by David Reed, the UK’s leading journalist covering data and direct marketing, this event will provide the optimal mix of targeted learning, interactive discussion and networking for delegates. Places cost £200 (excluding VAT) and are strictly limited to 25, so secure your place today!

Click here to download the full agenda

When: 8th March 2012

Where: St Pancras Renaissance Hotel, Euston Road, London, NW1 2AR

How to book: Contact Julian Berry on 0208 288 8632 or email jberry@tcpmarketingsolutions.com

But it is a growing problem and firms have to find a way to deal with the issue. Sure the apocryphal GLIT tales doing the rounds are amusing and make point anecdotally that some consumers can be, well, tricky customers: the woman who answered her front door to the claims investigator wearing the ring she reported as ‘undelivered’, the man who invited the investigator into his living room where his ‘missing’ TV took pride of place, the merchant that opened a ‘returned’ flat screen TV only to find an old car door inside the box instead. But home shopping retailers can’t rely on such instances of happenstance to catch the professional fraudsters – not to mention the more amateur chancers – out there.

The worrying fact is that false GLIT claims remain a low priority for most home shopping merchants in the United Kingdom, despite online fraud in the UK being more than double that of the US and Canada, according to a new study by CyberSource, a Visa company. Moreover, the study suggests only 30% of online retailers in the UK see improving automated fraud detection as a key concern, compared to 53% of those from North America.

What is vital to filtering out GLIT fraud and ensuring that legitimate claims are dealt with as promptly and efficiently as possible, and needs to be seen as essential by more retailers, is having the necessary consumer data to hand to allow home shopping companies to take an informed and appropriate approach to each consumer on a case-by-case basis – that is, give frontline claims management staff information that enables them to identify which claims are potential cases of fraud and which are likely genuine instances of goods gone missing.

This approach is most effective if a retailer implements a system that enables it to screen claimants for potential risk and fraudulent activity at the first point of contact, where costs are still relatively low. This system would require that frontline claims management staff have access to full up-to-date information on the customer and the delivery destination.  Having a clear view of every customer’s transactional and fulfilment history – including that person’s record with other retailers if possible – and similar information tied to each delivery address would give company’s contact agents the tools to identify patterns of behaviour and previous problems that might indicate whether fraud appears to be a risk or whether a claim is likely to be legitimate.

Nonetheless, customers whose goods really have gone missing will already be in a state of annoyance and scrutinising them with invasive security measures risks not only irritating them further, but also driving them away. The screening system thus needs to alert staff as to how likely the call is to be true or false. One way in which this may be achieved is by using critical data to identify GLIT hotspots and suspicious customer profiles, ensuring additional, probing questions are targeted towards the most suspect claimants. Often, a little directed questioning can result in a fraudster dropping their claim without needing to progress to the stage where investigators are brought in to follow up in person.

When supported by robust data, a gently challenging style coupled with some conversation management can deter fraudsters without putting off genuine customers. In addition, once a comprehensive system is in place, it becomes possible to analyse trends which go beyond the risk address or fraudulent claimant, potentially allowing the management of GLIT fraud before it even happens – for instance, making a signature a requirement when an order is placed to a suspect address. The data might also show that certain products need extra attention at specific times – for instance, certain products might be targeted by false GLIT claimants on say the day and first month of the release of a hot computer game or DVD box set.

While most firms on their own don’t have the access and capability to tap the data they need for this type of screening system, Transactis does. Working with a third-party data insight and management expert such as Transactis can help retailers measure the costs they are sustaining through GLIT fraud and act to reduce those without disrupting operations. Better access to, pooling of, and understanding of available data is imperative if retailers are to tackle this type of fraud before it becomes uncontrollable.

Now, as we move more fully into the internet age with high-tech retail technology, a whole range of new scams are being dreamed up – and it’s not just the professional criminals who are taking advantage of the new state of play in the marketplace.
With high-speed internet access becoming omnipresent – and feeding phenomenal growth in home shopping – the way many brands interact with consumers is changing fundamentally. Online shopping has enabled the retail world to offer real-time remote browsing and buying without customers ever having to set foot in high street stores.

While ‘card not present’ fraud has made a lot of headlines in recent years, high street retailers have grown savvy and made huge inroads in blocking plastic scams in their online operations, but there is another large pocket of fraudulent activity still growing: false ‘Goods Lost in Transit’ (GLIT) claims have emerged as a major new threat for home retailers. False GLIT claims are a type of first party fraud – a situation in which a person misrepresents the facts of their own interaction with a business for financial gain. Indeed, this type of fraud has seen a staggering 250% increase since 2007, according to CIFAS, the UK’s fraud prevention service.

A GLIT claim can be considered a type of first party fraud when a customer falsely alleges a product they have ordered has not arrived – when, in fact, it has – in order to acquire a second high value product for free or to sell on for a profit. Similarly, customers may claim an item has been returned but not received by the retailer.  Requiring little in the way of technological sophistication, this new form of fraud has emerged as, in effect, the ‘new shoplifting’.

 Astonishingly, though most businesses would not tolerate unnecessary expenses, GLIT is perennially shrugged off by many retailers as simply a ‘cost of doing business’. Yet, the Interactive Media in Retail Group (IMRG) has conservatively estimated the cost of GLIT in the UK at £48.5 million each year without taking into account any of the associated costs of each claim, and early indications from new research being conducted by Transactis suggest that the figure could, in fact, be as much as five times that number. A US study carried out by LexisNexis Risk Solutions has determined that for every ‘unseen’ fraudulent transaction valued at $100, the actual cost is $230, a ‘fraud multiplier’ of 2.3. The home shopping sector thus needs to wake up to the damaging effects false claims are having on profits – not to mention reputation.

Problematically, however, retailers attempting to tackle fraud face the duel challenge of catching out fraudsters and blocking their transactions whilst avoiding the alienation of customers with legitimate GLIT claims. The last thing firms want to do in this competitive retail climate is alienate honest customers. Alarmingly, however, in taking this stance, retailers themselves may unwittingly compound the problem – particularly when they take an obvious no-questions-asked approach to most or even all GLIT claims. In some cases, mistaken but honestly intended GLIT claims processed with little or no investigation can alert ordinary customers with shaky ethics to the opportunity of getting away with false claims. So not only are home shopping retailers facing the difficult task of detecting hardened criminals, whose scams might be very complex, but they are also increasingly in the sights of amateur opportunists who will take advantage of a loophole when they find it.

 The growth of fraudulent GLIT claims threatens to become endemic if the problem is not taken seriously by retailers. It can thus no longer be left largely unchallenged by the industry. Improving the management of genuine claims, whilst cracking down on fraudulent ones, must become a priority for all home retail companies, especially as remote shopping becomes increasingly more established as a top channel choice for UK consumers.

We compiled complete online and mail order transactional data from our retail partners, not just representative figures for the five year survey, which found that the biggest growth in internet shopping over the five-year period covered by the index came from consumers aged 18 to 24. This group spent 1076% more online in 2010 than in 2006.
Michael Green, director of insight at Transactis, said: “The figures from the index seem to confirm that, in total, home shopping has been hit by the economic uncertainty of the last couple of years while also undergoing a fundamental transition. But to say there has basically been a linear shift from mail order to web shopping is too simplistic.

“What we have seen is massive growth in home shopping by younger consumers, as those under 45 have vastly boosted their home shopping spend over the last five years and adopted the internet as their primary purchasing point. Meanwhile, those aged 45 and over are spending less overall on home shopping – the total spending among the over 75s contracting by nearly a third over the five-year period – but spending more on the web.”

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Now in its 21st year, the ECMOD Direct Commerce Show serves the catalogue, home shopping and multi-channel retailing community togehter with B2B distributors and pur play online businesses. The event is also home to the CatEx DCA Village – where you will find the Transactis stand at space number 10.

The exhibition is free to attend and you can register here.

The multi-track conference part of ECMOD covers a vast range of topics that are all geared toward helping both B2C and B2B retailers and multi-channel merchants to optimise their business performance. We’re hosting two sessions this year:

Wednesday 30th November 16:30 – 17:30

Michael Green, our Director of Insight, presents Right Product, Right Channel, Right Time – in Simple Steps:

Integration of multi-channel data need not require wholesale systems development. In this session discover how to generate highly personalised campaigns and yield the increased conversion rates that have long been promised, but not often experienced.

Thursday 1st December 14:45 – 15:30

John Sharman, our Commercial Director of Fraud Services, presents Customers Behaving Badly:

Discover valuable insights about fraud from our market-wide benchmarking study which combined transactions, goods lost in transit claims and claims outcomes from a number of large multi-channel retailers. With clients experience and research findings to share, John will explain what is happening and what your business can do to protect itself from fraudsters.

Download the full conference programme here.

You can book your place by calling 01271 866112, emailing rhi@ecmod.com or by completing this conference booking form.