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CRM: Creating Relationships on the Fly

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Posted August 3, 2001 By Staff     Feedback

Those who make the best use of their customer data NOW will be the standouts of the future. Don't let a weak CRM strategy leave you behind.

by Kim MacPherson

In an ideal world, effective customer relationship management (CRM) would be based largely on your ability to enhance your customer communications to the point where any and all dialogues are seamlessly integrated with your database's historical and transactional information. Where "one size fits all" would not only NOT be an option, but a severe detriment to your company's growth and future.

In other words, it would be about "dynamic personalization," wherein an email message's core personalized components (such as customers' clothing sizes, their ZIP codes, and how much they've spent in the last year) would be created on the fly as the message was being built.

But CRM would also be about managing the profitability of your customer base, including planning your internal email campaigns around rules such as the "80/20" one, where 20 percent of your customers represent 80 percent of your profits. It also, of course, would encompass service issues as well as customer inquiries, feedback, and suggestions.

All in a completely streamlined and detailed environment.

Again, all of the above represent components of an ideal world, not necessarily a real one. And, of course, there's much more to it. Intuitively, we all know what's necessary to build those "ideal" relationships with our customers. We know that consistent, valuable, and personalized communications will play an integral part in our success in this regard.

Some of you already have this down pat... or, at the very least, you're well on your way to making this ideal real. However, some of you, I daresay, are still struggling with this very large, very vital component to running your online business, so I thought it might be a good idea to run through some of the logistics of establishing an effective CRM strategy.

To bring it all into focus, let me start by stating what's probably quite obvious:

  • Those who make the best use of their customer data NOW will be the standouts of the future.

Therefore, what follows is an overview of one of the most important components of a successful CRM strategy: the data play.

Essentially, the more info you have on your customers, the more effectively you can both communicate with and serve them (and the more loyal they will be).

The most successful companies will have systems in place that allow them to combine various types of data -- that is, data from Web logs, campaign and third-party information, and brick-and-mortar info (if applicable), in addition to information on customer preferences, demographic information, and transactional histories. Progressive companies carry and use the type of data shown in the following hypothetical (and, yes, "ideal world") scenario:

  1. Customer Bob Smith lives in Omaha and has made not one, but three, purchases at your online men's clothing store in the last six months.

  2. He's also purchased seven times at your retail outlet located a half mile from where he lives.

  3. He prefers button-down shirts, khakis, and argyle socks.

  4. He has a waist size of 38 and a shoe size of 11.

  5. He uses his Visa card each time he shops. (And the complete number and expiration date are, of course, on the database.)

  6. He's single and owns a condo.

You can see the quality of communication that can take place using this type of information. Obviously, email is becoming much more sophisticated in this capacity. Imagine Customer Bob's reaction when he receives an emailed half-price coupon that's both personalized and thanks him for being such a frequent and loyal customer. The coupon can be used to buy any of his favorite items (assuming he's completely opted in to receive such offers, of course) and is valid both on- and offline.

But the dialogue doesn't stop there. Say Customer Bob takes advantage of this coupon offer and makes his purchase online. A few days later, he decides he wants to add a matching tie but needs help with the selection process.

He sends customer service an email and receives an instantaneous autoresponded reply that is both relevant and personalized. Based on the email address from which his inquiry originated, this reply confirms the details of his order, his shipping date, and tells him that a representative will get back to him shortly. A short time later, he receives a reply from a living, breathing customer service rep, with suggestions on matching ties to best complement his soon-to-be-delivered new outfit.

Any additional follow-up emailed questions or orders that Bob may submit are configured with these prior transactions and inquiries.

Ultimately successful CRM boils down to this: the data play. So the mandate for this part of the equation is to figure out which cells of information are most important to your unique business and which will drive your communications to the point where you can maintain your customers' loyalty and keep them buying.

Though customer service and marketing may be two different departments offline, that's not necessarily the case online, where there seems to be a symbiotic relationship between the two. So consider how you can integrate your customer service procedures into the mix.

Reprinted from ClickZ

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