Thursday, April 24, 2008

Grow Your Customer Relationships

You know you're getting old when news doesn't seem like news. You've heard it before. Same old story. Can you relate?

It's certainly how I felt reading this story from DM News: Study says CMOs are failing to use CRM well.
"Marketers worldwide are under-utilizing data and analyt­ics, particularly when it comes to customer retention, according to a recent study released by the Chief Marketing Officer Council.

Only half of marketers have a strategy in place for growing key account relationships, and 45% believe CRM systems are not effective enough. Further, only 15% of companies rated them­selves extremely good or effective at integrating disparate customer data sources, and 6% of marketers reported having “excellent knowl­edge” of customer data such as demographics, psychographics or transactional history."
The article goes on to talk about how so many companies continue to be focused on new customer acquisition and fall short in developing strategies designed to retain the customer.

In today's environment of short-term gratification (we must meet sales goals THIS MONTH; we have to report favorable earnings THIS QUARTER), I tend to understand why a long-term, customer-centric strategy might fall by the wayside. Couple the need for immediate results with an ever-shrinking marketing staff and budget, and I start to wonder how any company can think strategically and look at long-term benefits.

But, here's the kicker--this way of thinking with the customer in mind is a necessity. Customers today are aware of the data and technology that is available to corporations. They see it used to their advantage in their everyday dealings (the classic example is shopping with Amazon). They expect you to know all about them. They want you to anticipate their needs. They need you to serve them the right price plan or the right mix of products. If you won't do it, you're in danger of losing that customer.

It may be time to look at your customer touch-points and make sure that you're doing all you can to keep those customers happy.

Following is a short-list of ideas that might jump-start the evaluation process:
  • Have you empowered your call center or customer service folks to really assist customers calling in with issues? Are they able to make real fixes and solve problems?
  • Do you have a handle on your customer relationships? Have you done the analysis and database work to understand exactly what products and services each customer is buying from you (or has purchased in the past)?
  • Do you have a strategy in-place to make sure that you are maximizing the profit potential from each and every customer? Do you make the right up-sell and cross-sell offers, when the customer is most likely to be shopping?
  • Conversely, do you have a strategy in place to ensure that you are not over-serving your customer? For example, are they on a price plan that is too big for their needs, hence they're paying too much? Trust me, eventually, your customer will realize that they've been paying too much for your service, and they'll leave you. To retain this customer and maximize their lifetime value, perhaps you should be pro-active and "right-size" their plan, before they do...
Luckily, we direct marketers, with our background and experience in data mining and using analytics to understand--and predict--customer behavior, are well-positioned to make a positive impact on customer marketing. Nancy and I have re-focused our direct marketing consulting practice to be centered on analytics and data. It's that important, we believe.

Perhaps it's time to become the customer advocate within your organization!

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