Without a dialog two-way communication with customers, we cannot really have a relationship. Yet, for many organizations, CRM seems to focus primarily on marketing and sales. In other words, it involves one-way communication focused almost entirely on getting the customer to buy more.
Similarly, CRM initiatives emphasize the development and implementation of campaign management and sales automation software solutions. When the service component is considered, the focus is usually on setting up systems and business processes to react to customer-initiated contacts. The integration of CRM software solutions is often not slated until well into the third or fourth phase of the implementation. Meanwhile, what the customer continues to see and hear from companies are just more efficient sales and marketing messages.
What's missing in CRM for most companies is the dialog with customers. Only when we create and maintain a dialog with customers, can we effectively drive customer value, loyalty and satisfaction. In order to have an intelligent or meaningful dialog with customers, they have to want to participate. How do you ensure that customers will want to have an ongoing dialog with you? It requires that you commit to demonstrating your understanding of the customer.
Demonstrating Your Understanding
Customers believe that you ought to understand them very well. After all, don't you have all kinds of information about them? You know what they bought, when they bought it and where, don't you even if they spread the purchases around between your retail, catalog and online channels? You know what they look like because you asked them for all kinds of strange information when they filled out that warranty or product registration card last year. Then there was that online survey they filled out last month. The list goes on. You've captured a lot of information.
However, most customers don't believe that companies really do anything with the information they collect and they are often right. Very few companies use the information they collect to conduct a more meaningful dialog with their customers. With the exception of a few online companies, it's very rare for a business to utilize the information they've captured to enhance the communication with customers.
Demonstrating that you understand customers requires that you customize your communications with them not just online, but through every point of contact. Here are some guidelines for doing that most efficiently and effectively.
Develop a solid understanding of the customer experience cycle (see our June 2000 column). You can more easily demonstrate your understanding of the customer if you know what drives the customer experience at each stage of the purchase cycle and the opportunities you have at each stage to proactively make the experience better.
Decide where to invest in customizing communications based on the potential long-term value of customers. Not every customer will be worth the investment. This will require that you engage in a logical series of analyses and research that will turn all that customer data into customer intelligence. That series should include:
- Customer profiling and segmentation;
- Customer valuation including profitability, lifetime value and share of wallet;
- Life cycle analysis to identify purchase patterns, including likely product affinities as well as sequencing and timing of each subsequent purchase;
- Retention or attrition modeling; and
- Primary research to discover more about customer needs, attitudes and preferences.
Ask best customers when (how often and what time of month or year) and how (e-mail, direct mail, newsletter, phone call) they want to hear from you. This goes beyond a simple opt-in to the specific details of how you can best customize contacts to ensure an effective dialog and covers all types of communications:
- Special privileges or information about exclusive access for best customers.
- Product or service benefits.
- New product launches.
- Information or content specific to their interests.
- Loyalty program updates.
- Promotional offers.
Create a customer contact plan that ensures that communications are driving customer value, loyalty and satisfaction. The goal of the customer contact plan is to optimize frequency and timing of contacts and to utilize the right mix of channels and media. Most importantly, the contact plan specifies a combination of contacts that are not focused entirely on promotion and sales. The goal is to provide relevant and useful information to customers when it is needed most.
Ensure that point-of-contact staff have access to and know how to use up-to-date information about customer profile, purchase and contact information to tailor their conversations with customers.
Don't abuse the trust. Avoid spamming customers and communicating about offers that are not relevant or that are outside the guidelines they've given you. This usually requires organizational changes that give a customer development manager control over all the communications that are sent to customers in their portfolio. Further, this manager is charged with the responsibility of ensuring that contact staff are trained about how to use customer data and their understanding of the customer experience cycle to customize every conversation with best customers. This dialog with customers should impact:
- Web site personalization.
- Point-of-sale treatment (online and offline).
- Targeting, personalization, offer and creative for direct mail and e-mail marketing.
- Customer service treatment (online and offline).
- Level and type of recognition and reward.
- Product development and customization.
If you demonstrate your understanding of customer needs and preferences by providing an optimal mix of communications, balancing recognition and relevant content with sales and promotional offers, customers will ask for more. They will be willing to reveal more and more about themselves, which means you can further tailor your communications. Ultimately, your customers will be initiating and carrying the dialog helping you develop their long-term loyalty and profitability.
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