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    Home > Articles > CRM - Customer Relationship Management

    CRM: Taking One-to-One Marketing to the Next Level (Part 1)

    Achieving the goal of generating profitable revenue has become increasingly difficult — challenging even the most seasoned marketing and sales executives.

    Unfortunately, there have been very few advances that improve the marketing and selling process until recently.

    The current economic situation makes it’s more critical than ever to improve the efficiency of a company’s marketing and sales operations.

    Fortunately, new methods and technologies are helping marketers and salespeople deliver marketing messages that focus on the needs of each potential customer, present a clear and consistent message on how a company’s products meet the prospects’ needs, and then help close orders.

    Improved precision in targeting marketing activities allows each message to deliver greater impact, which helps prospects quickly see why they should buy your product.

    The result is greater efficiency in attracting the right prospects, and reduced time and effort in closing sales.

    While the products you sell have specific features and functions, there can be many reasons why customers buy those products from you. Customers could consider straightforward technical requirements to more intangible attributes such as availability, reliability, dependability, and maintainability. In addition, the importance of competitive pricing can range in importance from low to very high.

    This means improving marketing and sales presents management with some very complex challenges:

    • Reaching the target market with messages that are more appropriate
    • Reducing the time and resources required to generate leads, qualify prospects, and close sales
    • Improving your marketing team’s understanding of information needs of each target market
    • Improving your sales team’s understanding each prospect’s individual needs and decision criteria

    In other words, it’s important to refine and manage each prospect’s entire information gathering, product evaluation, and purchase decision experience. Since this buying process frequently requires many interactions with multiple departments over a lengthy period of time, you have an opportunity to develop a relationship between you and your customer.

    This two-part article is designed to help you improve the process of managing customer relationships by integrating online marketing, offline marketing, and direct sales activities to form a unified, one-to-one approach to managing customer relationships.

    Marketing is about markets — communicating with, selling, and servicing them. One-to-one marketing is about individuals. Communicating with, selling, and servicing individuals by providing a unique and valuable personal experience. One-to-one marketing is a philosophy of understanding a customer’s needs through asking questions and really listening to the answers, as well as through observing their actions.

    We have moved from mass marketing to direct marketing, and now to one-to-one marketing. And, marketers are changing their practice of company-centric database marketing to customer-centric one-to-one marketing.

    With direct marketing, marketers target customers so they can communicate more at less cost. With a one-to-one strategy, marketers focus on what the customer wants to buy rather than what the company wants to sell. This meets the customer’s needs and helps the customer become comfortable doing business with you.

    There are many ways to apply the principles of one-to-one marketing to improve communications effectiveness. In our book on one-to-one marketing, One-to-One Web Marketing, 2nd edition (1998, John Wiley & Sons), we covered seven technologies used to implement a one-to-one strategy. These technologies include targeted advertising and promotions, Web and e-mail personalization, customer care, and other methods of interacting with — and learning about — prospects and customers.

    The need to improve the way companies manage customer relationships has led to the term customer relationship management (CRM).

    Today, the field of customer relationship management has encompassed those technologies to help marketing and sales executives manage the process of implementing a one-to-one marketing strategy.

    One of the first questions people ask about CRM is whether it is a process or a product. The answer is that CRM is both — just like other aspects of business.

    For example, is financial accounting a process or a product? The technique of accounting is definitely a well-defined process, and many companies use an accounting software product to make the process more efficient and ensure that the process is followed and results tracked and monitored.

    The same approach is needed for a company’s marketing and sales operations.

    It’s time to unify marketing and sales functions by using tools and techniques that brings marketing and sales together as a team while maximizing the performance of both groups.

    This approach to managing the customer relationship involves tracking the full range of interactions with prospects and customers:

    · Every marketing interaction

    · Every sales interaction

    · Every customer service and support interaction

    Only by tracking the interactions that lead to sales can the customer relationship be truly managed, maintained, and nurtured.

    So, how do these elements of an effective customer relationship fit into a definition of CRM? In other words, just what is CRM?

    CRM Concepts

    Customer relationship management is the technique of providing information to prospects and customers, and collecting information about prospects and customers, that allows us to help them evaluate and purchase products that deliver the best possible value to them.

    Or, as author/consultant Patricia Seybold has said, the purpose of applying techniques such as CRM, one-to-one marketing, and relationship marketing is to make it easier for the customer to do business with you.

    Marketing and sales people have many opportunities to influence customer purchase decisions. Until recently it was normal for these functions to be performed separately — by different departments within a company — without acting as a unified team.

    Customer relationship management has become a popular name for a variety of software tools and techniques aimed at attracting and retaining customers. In general, CRM uses a centralized database to bring marketing and sales activities together in a unified approach to serving customers.

    CRM vendors like to think of CRM as a category of products that can be compared and evaluated against each other. However, CRM shouldn’t be thought of as just a technology or product. Instead, marketers need to think of CRM as managing the company’s resources to create the best possible experience and value for customers — plus the software tools needed to implement that philosophy.

    While the name CRM is new, the idea has been around a long time.

    Salespeople responsible for selling big-ticket items have always managed customer relationships by monitoring their customers’ needs, product orders, shipments, and customer service requests. Many times they do this by making frantic telephone calls to headquarters demanding information that’s stored in stand-alone computer systems.

    By applying CRM principles, data that’s now stored throughout the company is brought together in a unified database. This approach also brings employees together as a team to better serve customers.

    CRM combines many of the traditional marketing techniques that have been used effectively by themselves, such as:

    • Direct marketing
    • Telemarketing
    • Web personalization
    • E-mail marketing
    • E-commerce
    • Sales force automation

    Some CRM software providers want to provide a complete, enterprise-wide real-time system that replaces many of the tools and processes that are already in place. Other vendors want to provide just a piece of the CRM puzzle in what they call a “best of breed” approach where multiple products work independently but can exchange data with each other.

    While it’s usually best to keep the number of technology vendors to a minimum, other factors may be more important when implementing CRM. It’s likely that a combination of technologies is needed in the beginning to keep the company functioning smoothly as it grows its CRM initiative for the future. For example, it may be best to start by using a sales force automation system that is part of an integrated marketing and sales system. Then, upgrade your Web site and e-mail marketing to use the CRM system’s personalization and other techniques to gather profile data for use in one-to-one marketing.

    A key to CRM success is understanding a company’s needs and requirements, not just for the present but the foreseeable future. This requires that a multi-departmental planning committee examine all customer interactions, sometimes called “touchpoints,” to fully understand how customers view the company. The analysis should cover how to track customer interactions from ad response through product delivery and follow-on service.

    Customer history information can then be used to map the process of how potential customers gather information about a product and make purchase decisions. In addition, this analysis should include learning what customers want in a purchase experience and in the value delivered after the sale.

    Understanding what customers want from your company — and how to provide it — is the foundation of the one-to-one marketing that is needed to implement a successful CRM system.

    CRM Functions

    CRM is typically composed of two functions:

    • Marketing automation — Raising awareness and generating leads with online and offline marketing
    • Sales automation — Responding to leads and communicating product features, benefits, and values, as
    • well as closing sales

    These functions are traditionally performed by separate departments working independently within a company. However, the application of one-to-one marketing and selling requires close cooperation and teamwork — and an effective CRM system can help achieve that goal.

    For years marketers relied on traditional mass marketing methods to spread a general message across a broad spectrum of potential prospects.

    Times have changed. The expression “business as usual” has become a phrase that practically no one uses any more. Today’s expressions are:

    • 360-degree view of the customer
    • One-to-one relationship marketing to understand the customer
    • 24/7 readiness to serve the customer

    In other words, we now live in a customer-driven, value-focused environment where marketers and salespeople work as an integrated team to understand each prospect and customer.

    Traditional Marketing

    For many years the process of business-to-business marketing has used several reliable, but expensive, techniques, such as:

    • Public Relations
    • Advertising
    • Direct Mail
    • Trade Shows

    These marketing activities are designed to generate responses from people who are interested in learning more about the company’s products. In other words, they are designed to generate leads. Lots of unqualified leads.

    Each of these marketing techniques performs well under the right circumstances, however there are problems with traditional b-to-b marketing:

    • It takes too much time for an inquiry to be processed.
    • It is too expensive to generate the inquiries.

    However, by combining a comprehensive database marketing system with the precision of Web and e-mail marketing, it’s now possible to integrate traditional marketing campaigns with online marketing to produce more leads that are more highly qualified.

    Traditional Selling

    Traditional business-to-business selling has been about as efficient as traditional B-to-B marketing.

    The marketing department has either provided inquiries, or leads are generated by the salesperson through various prospecting techniques.

    Salespeople then make telephone calls, leave voicemail messages, and send sales letters to these people trying to make contact.

    Once the salesperson does make contact, it takes several telephone calls or in-person visits for the contact to decide to make a purchase or, for larger purchases, include the seller on a short list to be evaluated.

    It’s a slow, laborious, time-consuming process. The limitations of traditional sales practices are:

    • Wasted time trying to contact people who have not indicated a sincere interest in evaluating the company’s products
    • Inefficient process to understand the prospect’s real needs and evaluation criteria

    The bottom line problem is that too little is known about leads that have indicated an interest. And, too much time is required to convey information in order to turn inquiries into prospects.

    The solution is to automate the process of providing the information needed by potential customers to make that initial decision to visit with a salesperson. That’s where integrating Internet-based marketing into traditional marketing and sales activities delivers significant value.

    In Part Two of CRM: Taking One-to-One Marketing to the Next Level we'll explore:

    • CRM-Based Marketing and Sales Process
      • Working as a Team
      • Tracking the Customer Life Cycle
      • Using Web Personalization to Tell the Right Story
      • Using Personalized E-Mail Marketing to Increase Frequency
      • Using Sales Automation to Close Profitable Sales
    • Getting Started
      • Selecting a CRM Solution
      • CRM Software vs. Hosted CRM Services
      • CRM Vendor Solution Matrix

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