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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?
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 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.
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 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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