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Systematic
Marketing

If your business involves communication with customers, a CRM system (or customer relationship management system) is bound to be vital in reaching your goals. With the ability to manage all communications and details related to both existing and potential customers, there are loads of reasons why a CRM system is important for your business.

Learn about your customers

A CRM system will enable you to learn all about your customers, which is invaluable when it comes to knowing how to communicate with them in the future. For example, the system will record each customer’s purchase history, so you can spot patterns in what they buy and how often they make a purchase. You can use this information to decide which promotions or new product details to send to them, as you’ll know exactly what they’re interested in and how best to win more business from them.

In addition to this, you’ll be able to use your CRM system to see when a customer has opened an email from your company, and if they have clicked on any links. This will also assist in informing you about which communications are of interest to them and will help you to target these efficiently in the future.

Keep detailed customer records

CRM systems have the functionality to store all details about a customer, including any communication that they have had with you. This can really help with customer service, as if someone calls and relays information or an issue to someone, and then calls again further down the line and speaks to a different employee, all of their details will be on hand so they won’t need to repeat themselves. This will prevent the customer from getting frustrated and will save time and money as the call will be shorter, freeing up time for the employee to move onto something else.

Streamline your business processes

Due to being able to organise customer details effectively, you’ll find that there are a number of processes that can be streamlined by your CRM system, saving valuable time and money. For example, many admin tasks can be automated so that no-one in your workforce has to spend time doing them, and this can work across a number of areas, including marketing, data, and analytics.

Perhaps one of the best processes to streamline is the sales process, as this is potentially what brings in the most money. A CRM system has the capability to organise customers by conversion probability, so that time isn’t wasted on unsuccessful calls, and priority can be given to those who are most likely to make a purchase. It can also send prompts to employees about when follow-up calls need to be made so that those all-important leads aren’t left to go cold, and different types of calls can be assigned to the most relevant member of your team too, making for a completely efficient process.

Create better in-house communication

Sometimes it can be that different departments within a business are a little bit disjointed, and communication may not flow as well as you’d like it to. This can result in incorrect information being passed on, or details being changed between teams, which could then lead to mistakes and issues that impact on customers and profitability. By using a CRM system, you can ensure that every member of your workforce has access to the same information at all times, so nothing will get lost during communications between each other. This means that different teams can access the details that are relevant to them and can use these to drive groups of customers towards sales and will have access to everything from emails and phone call notes to appointments added to calendars.

Improve data and reporting

Accurate data and reporting are key within a business, as these factors are what you can use to understand your customers and find out what will encourage them to make a purchase. As all details are saved within a CRM from across the company, the system can analyse all of your data as a whole and can create reports which are easy to digest and include the information that is important to you and the department that you work in.

Now that you know how important a CRM system is for your business, it’s time to start looking at how you can implement one into your own company and start getting excited about all of the benefits associated with this.

We all know the old adadge that selling to new customers costs a lot more than selling to existing ones, so perhaps we should just stop chasing new ones – in these austere times that might make sense.

However, as I’ve mentioned here before (Customer Acquisition vs Customer Retention), it does seem that going after these expensive new customers is much more attractive than some boring direct marketing to exisiting ones. However, this blog is not about urging you to spend more time on your existing customer marketing (I’ll leave that for another day – as Chad Bauman says, “Want to get into trouble? Concentrate on new audiences” – so we’ll come back to that), but about how you should approach your new customer acquisition.

Just marketing to exisiting customers is a non starter – old customers go away or die and if you didn’t replenish the existing customer pot, you will soon run out of people to sell to. Remember, your existing customers were new customers once.

Part of the problem is that we think of marketing as a cost, something we have to spend money on and as such something to cut when times get tough. Marketing, done properly, is an investment. You are using some of today’s money to generate an income stream in the future. And that is the key and like all investments it needs analysis and decisions.

It is not enough to compare the cost of a sale to an existing customer to one to a new one. On a campaign basis that is always going to lose. What we need to look at is the lifetime value of a customer and use that information to identify the best source of future exsiting customers.and what ongoing activity is going to maximise the return. So get out those spreadsheets and start looking at your best existing customers and where to get more like them.

Lifetime Value is the key to good new customer marketing.
… oh, so I was talking about marketing to existing customers after all

Segmentation is based on a principle: everyone is different; and a hope: but in certain aspects they are not that different – people can be grouped together based on some similarities and grouped in large enough bundles to make marketing cost effective. “Segmentation is a compromise between the homogenous mass and the single individual”1

Segmentation is at the heart of effective marketing. It is about understanding your customers. The goal has always been one-to-one marketing where each person is a segment and we talk to them as an individual. While technology has moved us in this direction, even printed material can now be customised based on the attributes of each recipient, it is still not cost effective to market on this basis wholesale and so breaking our audience down into manageable chunks makes sense.
Of course segmentation can be used in two ways: marketing more effectively to our existing customers and supporters – which involves profiling and analysing our existing customer database (“if you have one”, Katy Raines, p6 JAM issue 37 – if not contact me//shameless plug); or looking for new audiences – which really involves looking for a general profiling tool that can be used to identify those similar to existing audiences or represents the type of new audience you would like to attract.

The latest edition of JAM (Jan 2010) from the AMA looks at segmentation which was the subject of the very first JAM back in 2001. A long time between discussions and so a welcome addition to the JAM series. Interestingly we have contributions in both editions from Heather Maitland and Andrew McIntyre, so gives almost a history of the development in arts market segmentation over the last decade.
What is clearly illustrated is that although the marketing environment has changed dramatically, with the development of the Internet and computing power in particular, the concepts behind segmentation remain the same: as Maitland prefaced her original article “Marketing is a planned process that involves talking to the right people, about the right things, in the right way, and at the right time, to achieve your objectives”. Couldn’t have put it better myself.
1. Andrew McIntyre JAM March 2001

I had an interesting conversation over lunch yesterday. We were discussing why new customer initiatives seem to be much more attractive to marketeers than customer retention activities.

Even though all our marketing eduction, and experience, tell us that it is much cheaper to sell to existing customers and patrons yet it seems that more effort is put into customer acquisition. That is not to say that customer acquisition is not important – it is the only way to grow a business over time. But by ignoring or just paying lip service to existing customer retention and development it makes new customer marketing nowhere near as efficient as it should be. If you are not actively marketing to your existing customers then how do you know the most profitable sectors targets to pursue for new customers.

By actively market, I mean continually profile and develop strategies for specific customer groups. Perhaps that is the problem – perhaps we have too much data to even get our heads around. Ideally, we’d market to our customers on a one-to-one basis, although that is not always going to be economic. Also, once we start this sort of analysis the faithful standard socio-economic categories just don’t cut it – that makes new customer marketing much harder. And the problem with tight segmentation in new customer marketing is the worry that you may lose some potential customers not in those groups – challenging.

So why? You will have your on views but a couple of things we discussed were: customer retention programmes are not as glamorous – it is the acquisition which has the advert budget; and retention programmes take a lot of analysis, thought and rigorous testing and refinement – a lot of detail. Perhaps it’s just the math.

Given today’s market place, hanging onto your customers is going to be critical. As budgets get cut, will it be new customer recruitment or customer retention that will feel the pinch first?