Marketing has always been about relationships

by on August 30, 2011

This article appeared in CRM Magazine, August 2003, featuring Taurus and Taurus customers:

Marketers face increasing scrutiny, scepticism, and focus on the infamous acronym – ROI (Return on Investment). The industry now, more than ever, has to be accountable. So what are the implications on the practice of customer relationship management, or CRM? Customer relationship management has been the basic tenet underpinning successful marketing, long before smart IT heads hijacked the term to denote the software that helps facilitate the practise.

Customer contact is important

Business leaders agree that it is important to stay in touch with your customers. Sharon Williams, Managing Director of Taurus Marketing comments, “CRM drives your business and not to have an effective CRM programme is the kiss of certain death.”

Bjorn Engelhardt, Sales Director for KVS Australia comments, “Keeping contact with all stakeholders is part of the challenge we all face today. For an organisation like KVS who is selling a new solution, contact becomes even more critical as it also serves as an educational process through the customer or prospect.”

What is effective CRM?

1. Better relationships:

“People buy from people – it’s an old sales line but as true today as it ever was”, says Frank Woods of ATS Training Systems, “Most individuals buy for emotional reasons. No matter how good your product or service and how logically you present it, relationships are paramount.”

“The closer you build the relationship the more successful you will be,” adds Hugh Gyton of Leadership Management Australia. “This will ultimately lead to referrals from customers, which are the easiest win.”

Peter Bates, Business Development Manager, Mainpac Australia adds, “Business and life are built on relationships and when a customer recognises a genuine commitment, success is imminent.”

2. Customer focused:

While bottom line goals are important, it’s the customer who drives the business. Organisations that best manage the relationship with their customers will prosper and survive.

3. Individual attention:

Customers do not all fit in one group. We need to respect individuality. James Elkington, Managing Director, Esker Software Australia says, “Keeping in touch is very important, but only if it is tailored to the individual. Being able to provide customised information is the key.

“It is essential to effectively communicate to your customers and to retain information about them.
By doing so you can achieve a very simple outcome that is pivotal to success – treat every customer as an individual.”

4. Multi-tiered:

Woods explains, “In the ‘business to business’ arena, fundamental to success is contact at different levels. This means talking to the various tiers in an organisation – lower, middle and upper management – and establishing rapport with all stakeholders who will invariably talk to each other when it comes to making decisions.”

Contact – how often before it becomes overkill?

Williams concedes, “Gauge how often you contact your customers according to the industry you are in and your audience. The style and frequency of your communication depends on your market, your customers and what you are selling. Most people won’t object to frequency if they see value in the communication.”

“It is essential that you are adding value and the customer/prospect welcomes the contact,” says Gyton, “Without it you’re likely to cause friction to the relationship. Double handling or internal miscommunication can result in customer contention. Have a CRM approach that allows you to see all touch points coming from your team.”

“Multiple contact methods are valuable,” adds Woods. “This means managing and maintaining the relationship via a mix of telephone calls, face-to-face meetings, emails or newsletters. But ultimately, don’t waste their time.”

Examples of SMART CRM goals:

  • I will touch base with all my customers every 48 hours
  • I will make contact with XX customers per month/week
  • I aim to generate X sales this year/quarter
  • Every Friday between 3-5pm, I will research X prospects
  •  I will align my sales and marketing activity to what my data tells me about customer preferences and value

Can ROI be measured?

General consensus is that everything in a business can and should be measured. “ROI on the CRM effort is certainly measurable,” states Bates, “Apart from the obvious, such as increase in sales and customer retention rates, other business critical statistics can be collated. It is easy to gather data but the key is how to analyse it and use it to plan strategically.”

Are you SMART?

Measuring the CRM effort relies on setting measurable objectives. Set SMART goals – Specific, Measurable, Achievable, Relevant, Timely against which you can measure outcomes. If your goals are SMART your results will be too.

How do you measure?

  • Increase in business ($’s)
  • Increase in calls – track inbound calls
  • Happy customers – poll satisfaction levels
  • Less misunderstandings – log complaints
  • Sales as compared to previous year/quarter
  • Lost sales – track why
  • Up-sells from existing customers – get more closely in tune with customers your team will know optimum time to up sell
  • Referrals – from where and what result
  • Most profitable customers – segment customer base, analysing highest value and most profitable customers
  • Extension in customer lifecycle – and what you’ve gotten out of it
  • Identifiable trends – eg popular product mixes

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