The SIM Framework

Disposal Cycle

This is the final, but often neglected Cycle, within the Strategic Interactive Marketing (SIM) Framework.

The stages in this cycle are:

Disposal Recognition
Information Search
Evaluation of Alternatives
Disposal and/or Renewal and/or Purchase
Post Disposal Evaluation

In many ways the Disposal Cycle is similar to the Service Cycle and Acquisition Cycle so only specific Disposal aspects will be discussed.

The most important issue is to see Disposal not as a non business event, solely the preserve of the customer, but as an opportunity.Whether by post, telephone, Internet or any of the other mediums, each disposal request is a customer contact and an opportunity to Appraise the Relationships and if appropriate to Market and Sell Replacement Products and Services.

An Opportunity to Appraise the Relationship

Whether it's business to business or business to consumer, both parties are seeking a win situation. Ideally we are looking for a win-win so that both parties continue the relationship. With Mass Marketing it's a bit like a lottery. Sometimes it's a win-lose, other times a loose-win and unfortunately even at times a loose-loose. Often these loses are due to a lack of communication before the sale is made with the result that either or both parties has a false expectation from the trading exchange.

If the Disposal Cycle is underpinned by deep relationship that has been developed over the use of the product or service, then both parties are in a good position to decide whether to continue the relationship. Reasons for not continuing the relationship are:

the supplier has changed market position
the supplier has changed product range
the supplier has changed its distribution
the customer's needs have changed
the customer makes insufficient purchases
the customer's life time potential is insufficient

Two key concepts of One-to-One Marketing is that companies should differentiate their customers rather than their products, and that they should differentiate their customers by reference to their life-time value. If your product or service is one that has a natural renewal (e.g. an annual motor policy renewal) or one where the customer has an expectation of another sales proposition (e.g. an endowment policy), then before the policy is due to be renewed or terminated, you should make an assessment as to whether to continue the relationship. See box for some examples.
Any termination on your part must be handled with tact and courtesy. Remember, customers needs and circumstances change, and also that the media can make great play with stories of apparent heavy handed tactics by large organisations.

Some Personal Experiences

The insurance company with an excellent track record for investment performance quite happily handed-over the proceeds of a 25 year endowment without inquiring about future needs.
The bank that received the above money, telephoned on the day of receipt and asked how they could help. This bank had never in 25 years telephoned to ask how they could help, yet the standing order for the above endowment had been paid by them for all those years!
The Lloyds underwriter who had to decline my car insurance business because I wanted to use my car for business use, immediately arranged for a broker to come back within the hour with some competitive quotes.

An Opportunity to Market Replacement Products or Services

There is obviously a need to communicate prior to the disposal date, but timing is of the essence. With some products like a maturing endowment, the customer may well be thinking up to a year before what to do with the proceeds. However, in the case of a low cost endowment, he or she may be worried that the proceeds will be insufficient. In both cases, early attention can help to enhance customer relationships and to plant ideas into the minds of the customer.

Again, information about needs, wants and desires, acquired during the life of the customer, can be used to target the most appropriate product. In fact, because the same needs, wants and desires have been fed into the Product/Services Development Cycle, then the products will be there, ready and waiting for the customer!

Further, if you have recently moved to Mass Personalisation or Mass Customisation, then there is a need and a reason to inform your customers about the new opportunities there now are for more explicitly meeting their requirements. Otherwise you may be overlooked because your customers still have historical perceptions about how generic and inflexible your products and services are. They certainly will have a clear idea about some of the new players.

An Opportunity to Sell Replacement Products or Services

Sometimes tangible products have a natural in-built opportunity to help the customer and acquire another sale. Disposal of an old refrigerator when buying a replacement, is an example that immediately comes to mind. Nether-the-less, intangible services can still provide opportunities. An endowment policy maturing a few years before retirement, can be used to buy an annuity, or nursing home insurance.

Strategic Interactive Marketing provides new opportunities in the way replacement products or services are marketed, designed, "sold", and serviced. If you have put in place the mechanisms to acquired sufficient knowledge about your customers and their changing life-styles and behaviour, then you will know which customers will appreciate the new interactive mediums and, just as importantly, why!