 Tactical CRM
Tactical Customer
Relationship Management can
prove that sometimes less can be better!
A 9/20/02 PC Magazine article
entitled “Instead of CRM, Why Not Just Ask Them?” reported that
according to research firms such as Butler Group, Gartner, and Meta
Group, Customer Relationship Management (CRM) applications have failed
at a rate of 55 to 70 percent! The primary reason for their failure is
complexity. High-end CRM systems are so complex they are many times
implemented incorrectly or simply not used by personnel within the
companies that deploy them. "Complexity is the enemy of success," says
Bruce Kasanoff, a consultant and author of the customer relationship
newsletter Less.
As the title of the PC Magazine
article suggests, why not just ask your customers what they want? The
article points out that simply surveying your customer’s opinions and
desires is the best method for understanding how to get them to buy
more of your product. Even though small and medium sized companies
have the computing power to track everything their customers are doing
and when they are doing it, why should they do that? How does that
information help if companies are unable to sort through all of the
data even with sophisticated analytical applications?
Let’s consider Tactical CRM as
an alternate approach to meet your marketing needs. My definition of
Tactical CRM is that it is a simple combination of a marketing
database, email communications, surveys, incentives, and results
measurement. These tools can be used by marketing managers in small
and medium sized companies as well as by product managers in large
companies.
I subscribe to the long held
belief that 80% of sales come from 20% of customers in almost all
businesses. Simply using that metric as your tactical baseline will
provide the largest incremental gain over the best analytical
applications. If you can communicate better with the 20% of your
customers that are providing 80% of your business you can be highly
effective.
To communicate better, I
recommend a “marketing database” be built inside your organization.
Very often when I discuss this with my clients they mistakenly jump to
the conclusion that I mean their customer database when I am actually
referring to a more general marketing database. In addition to your
customers, the marketing database should include your prospects,
vendors, employees, public relations contacts and so on. Additionally,
the people in this database have to be allowed to freely opt-in and
opt-out. This ability to easily come and go will build your
credibility with them during these times of high volumes of spam.
Your marketing database should
include a small group of highly targeted prospective customers, which
has long been the desired goal of direct marketers. Hewlett Packard
reports that their best online customers are the ones that opt in at
their Web site. They measured their activity as compared to list
purchasing and other forms of direct marketing and found that opted in
customers buy more and buy more often.
Your success will be dependent
upon continuing to provide your opted-in subscribers with information
of value. Treat them well and they will remain opted into your
database. This approach directly contrasts the techniques used by
spammers that send high volumes of junk email to unqualified prospects
expecting a minuscule response rate. With targeted customers, you will
receive extremely high response rates if you provide well-structured
offers. Create your offers based upon responses you’ve received in
surveys presented to the people in your marketing database. Test the
responses and target the results.
Sweepstakes are extremely
valuable in growing your marketing database. A simple monthly
sweepstakes drawing for a T-shirt can provide enough motivation to get
people to sign up. Similar incentives can be structured to get
individuals to respond to survey questions in the form of sweepstakes
as well.
Measurement is the other key
ingredient in Tactical CRM. We must track the results of our programs
and analyze them to determine which approaches worked and which ones
were not effective. Tactical CRM is like all direct marketing -- it is
an ongoing process of testing and iterating. However, unlike complex
CRM systems, we only need to measure results in aggregate to be
effective. By identifying the offers that provide high response rates
and desirable results, we can effectively direct future marketing
activities.
With Tactical CRM, we can
transition our Web sites and eCommerce initiatives from being passive
activities to dynamic, focused marketing programs. We can regularly
communicate with the 20% of our best customers, survey their opinions,
offer them incentives to take action, and measure the results to
determine the next steps in our campaigns. Try it and watch your
business grow.
Using the tools and techniques
I’ve describe above can produce rich results at a very low cost. As we
all know, in today’s business climate, the objective is to be more
effective at a lower cost. With Tactical CRM, we can reduce
complexity. Less can definitely provide more!
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