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Chapter 2 CRM in Marketing Curtis Adams Jordan Burns Lindsey Birmingham Leah Barnhill Motivational Research 1960’s Practice Included everything from showing volunteers a series of advertising to admin.
CRM in Marketing Curtis Adams Jordan Burns Lindsey Birmingham Leah Barnhill Motivational Research -1960’s Practice -Included everything from showing volunteers a series of advertising to administering focus groups -Scope of these efforts remained unwavering in product focus -However with the customer acting as a component of the purchase cycle…BRAND WAS KING Product Marketing -Became a study within itself -Part research…Part guessing game…part leap of faith -Predictable -Product marketing campaigns were designed to reach as many as possible -Focused on all customers having the same needs and wants and the actual pitch of the product Target Marketing Customer data as important as the product data Sum of all the customers to a single individual Segmenting customers allowed room for specialized communication Segmenting customers based on preferences can reveal interesting facts about consumer behavior Relationship Marketing -Understanding their preferences…increasing the odds of retaining them -You are not trying to sell a single product to as many customers as possible -You are trying to sell a single customer as many products as possible -One to One means not only communicating with customers as individuals but also developing customer products and tailored messages based on customers unspoken needs -Relies heavily on customer’s experience of the company as it does on the specific message received Campaign Management -CRM is a necessity -Hard Labor in launching new marketing campaigns -Conceive, plan, define the target audience, determine channel of communication, launching the promotion -CRM products offering campaign management present savings of time, labor and cost and demonstrate quantitative ROI -Proactive campaign management is like a good wine…it gets better with age -Tracking campaign success results in higher response rates and greater ROI -Use of results of campaigns to refine future campaigns has been acknowledged as the best CRM practice CRM Marketing Initiatives •Cross-selling and Up-Selling •Customer Retention •Behavior Prediction •Customer Profitability and Value Modeling •Channel Optimization •Personalization •Event-Based Marketing Cross Selling and Up Selling Cross-selling- the act of selling a product or service to a customer as a result of another purchase Example- New mothers buy clothes for their babies and then themselves as well Up-selling- motivating current customers to trade up to more profitable products Example- McDonalds super size option Cross Selling and Up Selling Ctd These two forms of selling are an art and knowing which products will increase the customer’s buying is the key Here are some things to think about: Selling customers something they wouldn’t want or need could cause them to buy less Not every customer is a good candidate for these types of selling Understanding the ways how and whether the customer responds to promotions Customer Retention Understanding why customers leave for competitors is key to find ways to retain them in the future Churn- the customers leaving one business for its competitors When a customer leaves there is: Loss of revenue Loss of investment in acquiring them Customer PrivacyOne-to-One’s Saboteur? Why is customer privacy a concern? 11.1.Excessive amounts of available customer data- U.S citizens can be uniquely identified by their date of birth, gender, 5-digit zip code Personalization tools enable users to understand a consumer’s behavior history and share that info without consumer consent Identity theft Consumer harassment Opt In Policy- policy that requires companies to receive customer permission to solicit personal data -This policy will require many businesses to rethink they’re marketing strategies and will result in millions spent on process and technology changes In Order to obtain good CRM: Know which marketing message and channel to use Know customers preferred interaction level Individual customers have different wants and needs, in order to reach these customers different marketing channels and interaction levels will be needed Customer Privacy Preferences Keeping record of Customer Privacy Preferences will help establish and maintain good customer relationships Unspoken needs can be observed through past interactions Marketing Automation Checklist for Success Successful marketing is a result of: A sound marketing process Industry specific marketing practices Use of a variety of campaigns and analysis of the results Questions asked by companies focusing on CRM: 1. How we focus our marketing campaigns on customers with whom we’d like repeat business? 2. How we migrate customers to lower-cost channels? 3. How other organizations in the company see customers differently than we and how does that influence our campaign message? Questions asked by companies focusing on CRM: 4. How can we anticipate products and services customer might want? 5. What is the best means of communicating with customers on an ongoing basis? 6. What tactics we use to entice prospects to become customers? 7. How we tie what we’ve learned about customers to improving overall customer satisfaction? 8. What keeps our most loyal customers loyal? Make it Happen Customer Relationships are about more than just understanding behaviors They’re about making them happen Eddie Bauer- customer service has been a trademark since 1920 when the 1st store opened 500 stores and 49 states later Eddie Bauer still concentrates on providing customers with the merchandise they want in an optimal way Eddie Bauer Eddie Bauer’s channels: 1. Brick-and-mortar store 2. Catalog business 3. Internet site Each channel thrives alone but together they compliment each other Eddie Bauer Ctd Strategy implemented: Eddie Bauer struggled in the mid-90’s because the knowledge of its customers and its ability to respond to their requests were lacking To fix this, the company began developing new metrics for understanding customer behavior The new intelligence allowed the Eddie Bauer to examine customer behavior and predict future behaviors through its rapid modeling environment Eddie Bauer Results 1. They can keep track of customer spending and determine which customer’s use which channels and develop more personalized offers for its customers 2. Good communication with the customer requires the right channel at the right time Sending the most valuable customers a broader assortment of products pays off (Customer Retention) CRM Never Ends The never ending journey: (figure 2-9) CRM is a constant cycle to build customer value It is a learning relationship between the business and the customers Manager’s Bottom Line Before Implementing customer Segmentation and CRM, plans MUST BE in place, or… CRM can more harm than good CRM Benefits CRM provides insight in: Identifying high response campaigns Understanding characteristics of high-value and potentially high value customers, and catering to them Improves effectiveness of high-cost channels (faceto-face) Personalized Communications for specific customer segments Understanding of purchase patterns for future maximum buying potential GOAL of CRM To ensure your company is ALWAYS customer’s st choice This can be done by: Moving “C” customers to “B” customers, and to keep “A” customers at that level Marketing Process should be well defined…should act immediately Marketing Department should not exist in a vaccum…but should be linked to all other business functions ... -Included everything from showing volunteers a series of advertising to administering focus groups -Scope of these efforts remained unwavering in product focus -However with the customer acting... require many businesses to rethink they’re marketing strategies and will result in millions spent on process and technology changes In Order to obtain good CRM: Know which marketing message... -CRM is a necessity -Hard Labor in launching new marketing campaigns -Conceive, plan, define the target audience, determine channel of communication, launching the promotion -CRM products