Slide 1The CRM Process includes the following stages: target, acquire, transact, service, retain, and grow.
Identifying Customers – Every piece of user information a firm receives goes into a database that helps firms identify the best (highest value, longest loyalty, highest frequency of purchase, etc) customers.
Differentiating Customers – Many firms differentiate customers by value, which is evident by the 80/20 principle (80% of a company’s business comes from 20% of their customers). Technology allows firms to identify high-value customers and respond with offers in real time over the Internet.
Customizing the Marketing Mix – Once the firm has identified and differentiated the customers, it can customize offerings to segments or individuals. Customization occurs when firms tailor their marketing mixes to meet the needs of small target segments using electronic marketing tools. Personalization involves ways that marketers individualize in an impersonal computer environment.
Interaction – Interaction with customers is what allows firms to collect the data necessary for identification and differentiation and to evaluate the resulting customization effectiveness on a continuous basis. The idea is that both the firm and the customer learn from each experience and interaction.
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TO YOU: Talking with not at customers and responding to their needs throughout your organization’s lifecycle with them:
Acquire & Retain
Understand & Differentiate
Develop & Customize
Interact & Deliver
TO YOUR CUSTOMERS: You know me no matter where or when I deal with you. You treat me better the more you know me, and give me personal, friendly service.
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Re-examine all of your customer management business processes.
Re-/define where CRM provides the greatest value to your “best” customers and your organization.
Don’t “repave the cow paths”
Incrementally implement CRM to improve top targeted processes.
Ex. Subscription Renewal processes
E-Surveying: Progressive Profiling Management
Viral Marketing: Tell-a-Friend Management
E-Commerce: Memberships, Event Registration Management
Affiliate Management: Sponsorship Management (Boston Symphony)
Reporting / Analysis: Profiles, Behaviors…
CRM Strategies
Customer Acquisition
Gain the greatest number of new “Best” customers as early in their “lifespan” as possible.
Customer Retention
Retain and expand your business and relationships with your customers through up-selling, cross-selling and servicing.
Customer Loyalty
Offer programs to ensure that your customers happily buy what you offer only from you.
Customer Evangelism
Cost Reduction
Reduce costs related to marketing, sales, customer service and support.
Improve Productivity
BRAND VS DIRECT RESPONSE:
“Seeing is believing.” vs. “Put your money where your mouth is.”
Measuring Clickthroughs undercounts branding success, yet overcount direct response. Know your goals.
Brand builders (Buy later): Buy Branding campaigns and measure CPMs only.
Direct marketers (Buy now!): use “Click to Buy” and measure conversion to sales.
Examples:
B-to-C: Direct response: online catalogs, banner ads or links with “Buy Now”. Branding: Sponsorships, articles, events, plain banners, all print or non-direct TV ads.
B-to-B: Direct response: Configurator tools, ordering Extranets. Branding: all print and non-direct TV, trade fairs.
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Differentiation, innovation and convenience
Increased bundling, reduction of costs, improved customer service
Retention: Keep your profitable customers for life.
Delivering not what the market demands but what your customers want and more.
Enabling total listening and multi-way conversations between companies (including formerly “isolated” internal employee experts), customers, and trading partners.
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Customer Acquisition and Viral Marketing
CUSTOMER ACQUISITION: “Don’t start choppin’ ‘til you’ve treed the bear.”
Create differentiated offerings, particularly in convenience, to attract new profitable customers that are similar to your current best customers.
VIRAL MARKETING: “To hear a secret is human, to air it is divine!”
Use the natural tendency to spread the word (gossip) to your advantage. Incent customers to bring in others through recognition and rewards.
Ex. iVillage “Send a Friend”, Kira Points upon registration, user is told to get friends to sign up in exchange for “Kira Points”.
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CUSTOMER RETENTION
RETENTION: “You don’t know the worth of water until the well runs dry.” and “Don’t muddy up the well that you get your water from.”
Spend generously to keep your best customers with superior service, rewards, and recognition. You can’t afford to lose your “great ones”.
RECOGNITION:”I’m so durned glad to be home, I’m glad I went.”
Use integrated systems to remember your customer from all touchpoints. (Not done at AAA)
Make them feel “at home” with your business. (Ex. Hotel profiles, Hertz Gold Clubs, Amazon.com personalized home page )
REWARDS: “You catch more flies with honey than with vinegar.”
Reward your best current customers differently than new ones.
Customers’ pet peeves include getting discounts for new subscriptions and none for loyal readers (Ex. Most print magazines give you discount when you sign up as new reader, then charge full price for renewal, penalizing loyal customers).
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IMPLEMENTATION
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STRENGTHS, INFRASTRUCTURE & FOCUS
BUILD OFF YOUR STRENGTHS: “Call a spade a spade and start diggin’.”
Perform an e-CRM SWOT Analysis to assess Strengths, Weaknesses, Opportunities and Threats across all core areas of your business. Know your core competencies and build off them. Eliminate or downplay weaknesses that leave you open to the competition.
Blueprint your e-CRM project. Follow 9-step methodology once to map current business, then review what other best practices companies are doing at each step, then repeat 9-step to map your ideal e-business.
INFRASTRUCTURE: “He doesn’t have enough studs for his dry wall.”
It takes time, money, people and integrated systems and processes to implement eCRM across the organization to create a Customer-Driven Enterprise (See chart). You can’t afford NOT to do it, but do budget for it.
PRIORITIZATION: Companies who lack focus are “like a hog on ice”.
Most companies fail at eCRM by doing it all at once. Use a phased approach (see chart) and set the dominos up in order, knocking them down one at a time.
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Repeat 3 times to map Current, Best, & then Ideal Practices
1
Customer
2
Strategy
What are the e-business policies and differentiating set of activities that your organization needs to deliver a unique mix of value to customers? What customer needs should/ not you meet?
drives
3
Process
business rules that is required to complete
the desired e-biz strategies and polices?
drives
4
individuals needed to support the business
processes effectively?
Include in-house and outsource jobs, with
e-biz/ marketing, content/ design & tech.
6
Intelligence
to analyze the results, predict the out-
come or decide a course of action?
who need
completed faster, better, or cheaper
by using computers or equipment?
supported by
other recorded information is needed to
provide intelligence to make decisions?
supported by
bute data & automate the processes?
supported by
Experiences
Attention
I am unwilling to waste attention. You must earn It.
Value
I expect to receive 2-3x value in return for investing my attention.
Desire For Knowledge and Individuality
I desire information that is valuable to me because it enables me to decide what to do, and how best to do it.
Decoded Complexity
I will turn to reliable sources of “evaluated” information and may find it convenient to complete my purchase at the same time, and at the same point.
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Not Deliberately Misled or Confused
Your uncoordinated marketing communications result in a lack of congruency or no “single version of the truth” to me.
Organizational Memory
I expect all employees that I interact with to “know” me.
Respects Privacy
My data is not shared with anyone and is only used to improve your value and service my needs.
Problems and Needs
I expect you to solve my current and future problems and needs quickly, professionally and efficiently.
Can Quickly Find Information Pertinent to Current Interests
Ideal: Let me define what information I am interested in, and “an agent” would go and find it for me, and report back later in a form, at a time, on a device, and over a medium appropriate to me.
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Increased Hard / Soft Results ($,%,#)
External: Customer Acquisition, Up-selling, Cross-selling, Personalization, Interaction, Feedback, Service, Satisfaction, Loyalty, Evangelism, Relationships, Value, Understanding…
Decreased Hard / Soft Results ($,%,#)
External: Customer Issues, Complaints, Attrition, Churn Dissatisfaction…
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Increased Sales
A well-used CRM system typically yields a direct sales revenue increase of 10%-20%.
Customer Retention
Improvement of Average Observed Customer benefit 10%-18% for Customers That Formally Measured.
ROI Justification
A 10% improvement in customer retention and increased revenues and a 14% increase in customer satisfaction, though small, can provide all the justification any company needs to implement a CRM system. (Aberdeen Group 2003)
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