Tuesday, 27 October 2009

Charles I.. Father of Direct Mail

A likely story..but in fact the Royal Mail was made available to the public by Charles I in 1635 with postage being paid by the recipient. Of course the recipient doesn't normally pay the postage these days..well, not unless you are receiving a direct mail piece from Alfa Romeo. Can you believe that I actually trotted off to the Royal Mail Sorting Office to retrieve an item for which the postage had been overpaid and it turned out to be a direct mail piece trying to sell me an Alfa Romeo Brera. Now, I was less than pleased that I had made a trip just for this..but what made it worse was that I actually already own the said car !! So not only did someone get the postage wrong..they can't even seem to run a database properly!

I believe Charles ended up losing his head......

Saturday, 3 October 2009

600 Words (or so) on CRM

I’m often asked why Customer Relationship Marketing (CRM) is important, followed closely by what is it all about?

If we start with the premise that marketing messages of one sort or another are still used to convince customers to buy good and services, then we need to remember that today’s customer is constantly bombarded with messages. It is estimated that in 1985 consumers experienced 650 marketing messages per day, today it is closer to 3000. Combine this with the proliferation of entertainment / news / education sources and the various demands on our hard earned disposable income; then it is obvious that there is much more competition for customers share of wallet, time and attention resources.

As marketers we are faced with more fickle and demanding customers where even in today’s economic climate, choice is no longer a privilege of the wealthy.

In many fields today the only sustainable points of differentiation are corporate branding, customer-friendly business processes and the right level of intimacy in relationships

These 3 areas are important in their own right, but when combined actually define the experience that customers have with a brand. In reality, it is this experience that actually best reflects what CRM is all about. CRM has often been seen from the comms perspective…talking to the right customers at the right time with the right message.

But relationships are much more than that. The relationship we have in our daily lives are not just based on the other person says, but also how they say it, how their actions reflect their words and how we perceive them.

The relationship brands have with customers is an amalgamation of the brand, how it interacts with them at the point of sale / call centre / online shopping basket and what it says to them at various points in that relationship.

If we look at what the real benefits of CRM are, then an Aberdeen Group Report in 2006 highlights them:

Top performing companies using CRM and Precision Marketing Techniques:

> Are three times more likely to proactively prevent customer churn though precision marketing techniques
> Have been able to capitalize on and exploit ‘ intelligence’ gathered from multiple touch-points and interactions in order to influence purchasing decisions
> Have enhanced levels of customer satisfaction
> Enjoy a greater share of each customer’s wallet
> Are able to seller a wider portfolio of products to their customer base

These benefits are based on fundamental virtues of common sense ‘knowing your customer’ marketing

One thing for certain is that CRM is not just about implementing expensive software. It’s about Customer Strategy not IT Strategy.

It identifies all touch points between company and customer and then changes the company to ensure intelligent customer management that develops profitable relationships

There are perils in implementing CRM, and these have been summarized below from Avoid the Four Perils of CRM, Rigby, Reichheld & Schefter, HBR Feb 2002

The Perils are:

Ø Implementing CRM before Creating a Customer Strategy
Ø Rolling out CRM Before Changing the Organisation to Match
Ø Assuming that more CRM Technology is Better
Ø Stalking not Wooing Customers

Now I do seem to use the word ‘relationship’ an awful lot in this piece – about 8 times already. The use of that word would seem to imply a relationship that is of equal importance to both the brand and the customer. I would stick my neck out and suggest that in most cases the brands needs that relationship more than the customer does.
So perhaps we should look at Customer Interaction Management, or perhaps the much more friendly, Customer Experience Management as the real successor to CRM