Issued by: Global Vision


Why have CRM applications neglected the needs of marketing professionals and always focused primarily on sales automation?

CRM as a concept has always included marketing. You have Marketing Automation, Sales Force Automation and Help Desk or Support. And despite all three being key to CRM, CRM vendors have traditionally delivered light-weight functionality in their Marketing Automation set of features; limiting them primarily to just e-mail campaign management and lead tracking. That's it.

This is due to a couple of reasons. First of all, software is primarily developed and sold to streamline processes and thereby save time and ultimately, money. To sell software, you need to convince the market that you are going to help them save money, first and foremost, since at the end of the day expected ROI is what justifies spend. So, although CRM has always included marketing, from a software perspective, the easiest place to show ROI is in sales and support, since both of these departments are made up of dozens to hundreds and thousands of people. You make these large teams 5% more efficient, cut a couple of minutes off of the time it takes them to do something, then multiply that times 100 or 1000 and you start seeing big savings. Unfortunately, calculating ROI for marketing activities is more complicated and has therefore been more difficult for a CRM application to deliver tangible value to a marketing team.

So, has it been primarily because marketing ROI is difficult to measure?

I would say so, yes, it's been a lack of hard numbers. Historically, there have been more soft factors than hard factors in marketing than in sales and support. You can quantify the effectiveness in sales and support by looking at things such as sales figures and call duration. But it's always been out of the reach of technology to be able to measure the softer factors, such as brand affinity, brand awareness and the likelihood of repeat purchases.

Is this changing?

Fortunately it is, yes. New marketing channels such as the Web and mobile phone are giving marketers a new way of measuring response to a campaign. We see traditional media like TV and radio driving people to websites and getting people to send an SMS. This is making the effectiveness of traditional media easier to measure. So, on the one hand marketers are now being held more accountable for delivering solid results. But on the other hand, these solid results can now consist of more than just pure sales figures.

The other thing is that the Web and mobile channels are now creating an immediacy that didn't exist before, putting more demands on marketers. The time lines between campaign conceptualization and launch have been cut dramatically, and so have the time lines between campaign launch and response. As a result, marketers are now expected to run more campaigns, across multiple channels, in less time, and analyse much more data.

And these new marketing channels represent tremendous cost savings. The fact that you can now get a message out via SMS or e-mail at a much lower cost than via television or print has meant that the potential for huge cost savings and greater efficiency has increased.

So if you really think about it, it's the new marketing channels that have created the need for more marketing focused features, or Marketing Automation, in CRM applications, because of the resulting potential time and cost savings, the new demands on marketers, and the increase in data that marketers need to analyse. The market is beginning to demand it, to expect it, to pay for it.

So what functionality should marketers look for in a CRM application?

Beyond the traditional features such as list management and lead tracking, as a minimum, marketers should be looking for CRM applications that can help them implement and manage e-mail campaigns, SMS campaigns, and track responses. Beyond this, they should start looking for more advanced features that boost their relationship marketing capabilities to their base.

Ideally, they should be looking for an application that focuses on Marketing Automation that can easily plug-in to an existing CRM application, because it's going to be a while before CRM applications catch-up with Marketing Automation applications from companies that have been focusing on this for a while.

What do you mean by relationship marketing* capabilities?

Relationship marketing is simply the focus on customer retention and increasing the lifetime value of a customer. So instead of focusing on customer acquisition, relationship marketing focuses on the existing relationship you have with a customer and how to leverage this relationship to derive more value, or simply put, to get more sales out of the customer base. So, ideally, marketers should look for features in a CRM application or Marketing Automation application that has a strong focus on customer retention and relationship marketing.

* Note: Follow the link at the end of this interview for an online multimedia presentation covering the basics of Relationship Marketing and local success stories. (No registration is required for this free overview.)

Is customer retention not more a support role?

No not at all. Customer retention should be a focus of the entire organisation, since it's so much cheaper to sell to an existing customer than to acquire a new one. You keep your customers happy, and they will not only buy more from you, but it will cost you a lot less to sell and market to them, and they will even refer your business to their circle of influence.

So how does marketing play a role in this?

It's marketing's role to develop and implement customer retention programmes. This can be in the form of loyalty programmes or reward programmes, for example. It's also up to marketing to create a detailed profile of the customer base and identify loyal customers, customers who are likely to defect to another brand, customers who are unhappy, customers who are happy, and then develop a targeted campaign for each group to either reward them for their loyalty or convince them to stay with you and buy again. This is what relationship marketing is all about.

And going back to CRM, how does CRM play a role in this?

Relationship marketing starts once the customer is acquired, and this tends to be where a lot of CRM applications stop providing marketers with functionality. Once acquisition has happened, you need to be able to segment your customer base into different groups based on their loyalty to your brand, their affinity to your brand. We have a 4 level scale starting off with “available” and ending up in the ideal of “adorer”. This is based on RFM value, or the Recency, Frequency and Monetary value of their purchases. Aside from pure sales as an indicator, you also need to be able to track the number of interactions your customers have with your brand, either via your call centre, a survey, a competition, or activities on the website. A marketer wanting to effectively run a relationship marketing programme needs to find a CRM solution that gives him this information. They need to look for a CRM application that helps take a consumer through the brand journey and tracks it. In other words taking a customer from “available” to “adorer” and being able to identify what stage they are in along the journey. This is core to relationship marketing.

And how is Web 2.0, the new Web technologies and ways of people using the Web changing CRM requirements for marketers?

The latest Web technologies are just increasing the possibilities for a consumer to experience a brand, engage directly with a company, and for companies to engage directly with the consumer. Web 2.0 applications such as online communities and social networking sites like Facebook, wiki's and blogs are putting the power into the consumers' hands and giving them the ability to either embrace or reject a brand and let the whole world know it. It's creating opportunities for companies to create more “touch points” to interact with the consumer and get them to experience the brand and become more intimate with the brand. The brand journey is essentially becoming more elaborate now. And with all of these new developments, all of these new “touch points” being created by both companies and customers, CRM applications need to manage multi-channel campaigns and be able to capture and track the interactions with consumers across these multiple channels.


Multimedia Overview of Relationship Marketing
To get an overview of Relationship Marketing and how local companies such as Archer's Aqua and Levi Strauss & Co have successfully implemented relationship marketing campaigns, please follow the link below to view a multimedia presentation (no registration required).

http://presentation.eureka.gloviz.co.za

Visit our PRESS OFFICE: Global Vision is a leading software development partner specialising in the fields of 1-to-1 marketing and eRecruitment amongst others. We have developed applications which help our clients get the most from their marketing and recruitment investments.- more....

[10 Apr 2008 10:22]

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