CRM in Marketing

Customers

dont want to be treated equally. They want to be treated individually. Peppers & Rogers

Why CRM is a Customer and Competitive Necessity

It typically costs 5-10 times as much to acquire a new customer as it does to retain an existing one. Some companies can boost profits by almost 100% by retaining just 5% more of their customers. Harvard Business Review (Reicheld & Sasser) A recent McKinsey study showed that the average new customer spends $24.50 at a given web site in the first 3 months as a shopper. The average repeat customer spends $52.50 every 3 months. Most companies lose 50% of their customers in 5 years (Harvard University) On average only 15% of a sites customers consider themselves loyal to it. The loyalty rating among people who had experienced a problem was only 6%. Customers who had not experienced problems indicated a customer loyalty rating of 19%. The loyalty rating among customers who had experienced problems but were satisfied with the way they were handled: 21%. (Digital Idea) 70% of repeat purchases are made out of indifference to the seller, NOT loyalty. (eLoyalty) The web customer is only 1 click away from your competition.

What is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) is: the integration of sales, marketing, service and support strategy, process, people and technology to maximize customer acquisition, value, relationships, retention and loyalty.

A Redesigning of your Business from the Outside In. Customers, Data and Database at the Center of your Organization (Customer-centricity). A organization-wide single customer view. A Foundation for 1to1 Marketing: Treating Different Customers Differently (Single Ticket Buyer vs. Subscriber) A Means to Your Total Customer Development Ends.

Total Customer Development Hierarchy

Customer Actualization Management tm Customer Evangelism Management tm Customer Lifecycle Management Customer Experience Management Cause Marketing Management Customer Quality Management tm Customer Innovation Management tm Customer Relationship Management

Interactive Marketing Management

CRM Strategies
Customer Acquisition

Gain the greatest number of new Best customers as early in their lifespan as possible. Retain and expand your business and relationships with your customers through up-selling, cross-selling and servicing.

Customer Retention

Customer Loyalty

Offer programs to ensure that your customers happily buy what you offer only from you.
Enable loyal customers to become a volunteer sales force.

Customer Evangelism Cost Reduction

Reduce costs related to marketing, sales, customer service and support.

Improve Productivity Enhance your e-business strategies.

The Customer
Customer Segments

Suspects, Visitors, Prospects, Subscribers, Patrons, Members, Ticket Buyers, Users, Consumers, VIPs, Volunteers, Annual / Major Donors, Advisors, Advocates, Legislators, Strategic Partners, Sponsors
What data do really you have on your customers Problems, Pains, Fears, Needs, Wants, Likes, Goals, Influences, Relationships, Affiliations, Alliances, Experiences, Aspirations, Options, Expectations, Questions, Knowledge, Skills, Activities, Attention, Communications, Interactions, Emotions, Memories, Satisfaction, Perceptions, Beliefs, Admirations, Attitudes, Opinions, Values, Learning, Ideas, Motivations, Objections, Priorities, Choices, Behaviors, Personality, Self-Concepts, Trust, Loyalty, Attention, Recognition, Time, Energy, Risks, Investments, Rewards, ROI, Lifestyle, Lifecycle Stage, Social Class, Culture, Sub-culture, Age, Family, Education, Hobbies, Interests?

CRM People
Customers

Suspects, Visitors, Prospects, Subscribers, Patrons, Members, Ticket Buyers, Users, Consumers, VIPs, Volunteers, Annual / Major Donors, Advisors, Advocates, Legislators, Strategic Partners, Sponsors Management, Employees, Visitors Services - Consultants

Users

Suppliers

CRM / Customer Development Experts Software, Hardware, Connectivity

Products - Technology

Database Marketing vs. CRM

DBM is company-centric,: the whole purpose of targeting customer segments was to help the sell more stuff for less cost. CRM is customer-centric: still concerned with profit but achieves profit by concentrating on customer benefits and valuesstrengthening the relationship.

CRM Tasks:

1.

2.

3.

Identifying those customer values that are pertinent to a particular business. Understanding the relative importance of those values to each customer segment. Determining if delivery of those values will affect the bottom line positively.

CRM Tasks (cont.):

4.

5.

Communicating and delivering the appropriate values to each customer segment in ways the customer wants to receive the information. Measuring results and proving return on investment.

CRM Marketing Initiatives

Cross-Selling

Selling a product or service to a customer as a result of another purchase Selling the right product to the right customer

CRM Marketing Initiatives

Cross-Selling (continued)

Selling more products to a customer increases revenue from that customer and costs less than acquiring a new one
Not every customer is a good candidate It is critical to understand the ways by which customers evaluate how and whether to respond to promotions

CRM Marketing Initiatives

Up-Selling

Motivating customers to trade up to more profitable products

Customer Retention

Analyzing customer attrition

Understanding why customers have left Understanding who How do you keep them? Churn prediction

What is CHURN?

CRM Marketing Initiatives

Behavior Prediction

Using modeling and data mining techniques, including

Propensity to buy analysis

What product is a particular customer likely to buy next What product is a customer likely to buy next Which products will be purchased with other products Determining the optimal price for a given product

Next sequential purchase

Product affinity analysis

Price elasticity modeling and dynamic pricing

CRM Marketing Initiatives

Customer Profitability and Value Modeling

Can a customer be unprofitable but still considered valuable? Customer Lifetime Value (LTV)
Potential value Competitive value (wallet share)

CRM Marketing Initiatives

Customer value measurement is dataintensive

Value modeling is only as accurate as the customer data is rich

CRM Marketing Initiatives

Channel Optimization

Means optimizing a companys inbound channels with its outbound means of customer interaction Knowing how to choose the best approach for each
Understanding the channels through which specific customers prefer to interact with the company AND How best to communicate with your customers

CRM Marketing Initiatives

Personalization
Customizing customer communication based on knowledge preferences and behaviors at the time of interaction Online messages tailored to a particular customer or customer segment In the B2C model, personalizaiton is based on the analysis of a customers clickstreams

CRM Marketing Initiatives

Personalization

Clickstreams

A customers navigation path through a companys Web site A company can see not only what a customer purchased by how the customer reached the site in the first place How he traveled through the site after he got there How much time he spend on each page Which products might have stimulated purchases of other products

CRM Marketing Initiatives

What new tactics can analyzing clickstreams trigger?

Changes to Web images Custom promotions or discounts Customized Web pages according to the visitors use of the site

CRM Marketing Initiatives

Event-Based Marketing
Time-sensitive marketing or sales communication reacting to a customerspecific event. Also called event-driven marketing Can apply to a segment of customers or to individual customers This is what companies adopting CRM are striving for

CRM Marketing Initiatives

Event-based marketing
Combine personalization techniques with process design to ensure that the right action targets the right customer at the right time Ideal goal is to react to customers in near real-time