Making Play for CRM Clients

Christopher Saunders

Updated · Aug 17, 2001

E-mail marketer is aiming to beef up its capabilities in CRM, as the customer acquisitions space sees continued weakness.

The Chicago-based company, which is majority owned by Internet holding company CMGI, has spent most of its life positioning itself as a player in the list management, list renting and prospecting fields. But now, executives say the firm is aiming to use its e-mail delivery technology into a way for marketers to target their own customers.

“Oftentimes, we integrate acquisition campaigns with so-called retention campaigns — when clients come to us and want to use our lists, but say ‘by the way, we've got a house file we'd like to integrate,'” said yesmail chief executive Dave Menzell.

As a result of the change, the company has established a 25-person unit that strictly handles CRM work for clients. The group, which is comprised of employees pulled from elsewhere in the firm, will have the benefit of selling yesmail's delivery and database management ASP technology, with which it's already made something of a name for itself.

“We've always been known as a leader in the e-mail marketing side, but mostly the acquisition side,” Menzell said. “It's principally our prospecting database that we sell access to. Now, we're leveraging our experience in the space, and our technology, to aggressively go after that pure retention play.”

Accordingly, Menzell said the company is approaching existing clients with the new proposition, and going to prospective marketers with the mantra of being an all-in-one shop.

“We're trying to leverage the fact that we've got a big acquisition database and technology that provides a lot of value to users and we can work with the client in a continuous cycle,” Menzell said. “We're offering our clients a more robust solution — not only can we help them to acquire new customers, we can help them throughout the customer lifecycle.”

But the changes don't mean that yesmail is giving up on its roots in customer acquisition. The firm will still continue to sell access to its database, which contains about 25 million e-mail addresses, while expanding to increase its efforts to woo more B2B marketers.

As a result, the company will compete even more fully established players in the space, like Naviant and Digital Impact, both of which focus on CRM but also offer customer acquisition services.

Fortunately, Menzell said he sees a large, and growing, market for services such as these.

“With the economy the way it is, I think companies all around are looking for how to maximize the customers they have,” he said. “The old adage that it costs more to acquire new customers rather than retain existing ones is … proving to be the case.”

Menzell isn't the only one thinking that retention, in these times, could be more lucrative than acquisition.

Agencies, for instance, are looking to increase their focus in the area, with interactive shop iXL (now merging with Scient), (NASDAQ:SCNT) and MRM Partners — a division of ad agency holding company Interpublic Group (NYSE:IPG) — both taking recent steps to beef up their CRM practices.

At the same time, several industry-watchers like the Aberdeen Group have said they expect CRM revenues to skyrocket during the next five years, as companies realize the value — and low costs — associated with marketing to their own customers.

“It's a real bright spot in the economy … and a big market opportunity,” Menzell said. “We're seeing more and more Fortune 500 companies adopting e-mail as a mainstream communication tool for their customers. Five, six months ago, they were asking, ‘Should I use e-mail?' Now, today, the question is “I want to use it — how?'”

Reprinted from Internet Advertising Report.

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