This month's column was contributed by Donna Arnold-Ialongo, senior consultant.

Much of the CRM emphasis has been on technical solutions that promise "true customer intimacy." These solutions, broadly defined, range from installing software and hardware designed to enhance customers' call center experiences to managing customer interactions to using a marketing database, campaign management or sales force automation system. If they haven't already done so, corporations are busy building enterprise-wide data warehouses – populated, they hope, with the data that holds the key to increasing customer profitability.

There's nothing intrinsically wrong with using information gathered during your customers' normal interactions with you. To the contrary, this data can be incredibly powerful. However, problems arise when companies place their faith in technical solutions alone and neglect the "C" in CRM. The good news is that the synergy of traditional database marketing and customer research results in more profitable customer relationships than any purely technical solution can provide.

Here are some ideas for putting the "C" in CRM:

Meet Your Customers Face-to-Mirror. There's no substitute for listening to your customers, prospective customers and lost customers talk about your company, products or service. This is basic. Do traditional focus groups. Stand behind that mirror and listen to what they like, what they don't like and what they'd like to say to you. You'll probably have a million questions, but just focus on the big picture first (e.g., what satisfies and dissatisfies them or how they view you and your competition). You'll learn plenty.

Validate Your Findings. Focus groups are invaluable, but the results cannot be generalized to all of your customers. The groups you commissioned will have given you direction on what questions you should be asking in a quantitative, projectable survey. However, before you field an online, mail or telephone study, make sure you use your database information to enhance your research. The synergy of the two will provide a deeper understanding of the relationships your customers would like to have with you – and whether these relationships are really in sync with what you want from your customers and with your profit objectives.

Use Your Database to Select the Customers You Will Interview. This may seem like an obvious use for a database, but many marketing managers find themselves reading reports on surveys and asking questions such as, "I understand what all our customers think about our product changes, but what specifically do our best customers (or new customers, or attriting customers) think?" Avoid that kind of question by carefully planning your survey samples so that you will get answers to your specific business questions.

Understand Your Customers' Life Cycles. Using your database, you may have identified each stage of your customers' interactions with you; but do you know what products, offers, messages and creative treatments motivate them to purchase at each of these stages? Do you understand their needs, attitudes and preferences as they move through their life cycles? Asking customers for this information can produce invaluable, actionable insights for developing targeted communications and creative approaches.

Get more information on your database segmentation. You may have segmented your database, and you may be happy with that segmentation. You now understand the past behavior of your customers, but what about their future needs and expectations – and how do they feel about your ability to meet those expectations? Ask them. You'll get important insights that allow you to create products and services that really serve the needs of those segments. In addition, the meaningful findings from the research can be reverse-appended or "sprayed" on all the members of a segment and used to build more robust predictive models.

Append Database Information to All Research. If you've segmented your database, make sure you know in which segment each respondent belongs. In any case, append important behavioral information (recency, frequency, monetary value) that can bring additional insights to survey responses. You'll be able to identify the actual behavior, for example, of those who say they are highly satisfied with your product.

Append the Lifetime Value (LTV) of Each Customer. If you've calculated lifetime value for each of the customers on your database, make sure you append that information to the responses of each customer surveyed. It is incredibly helpful in analyzing survey results to understand the revenue your customers will deliver over time relative to what it costs to acquire, maintain and service them. You may find out, for example, that those who are most excited about your loyalty program have the lowest lifetime value of all your customers.

There are many opportunities to apply this type of research:

  • Comparing prospective customers to existing customers to understand similarities and differences.
  • Understanding where your product or service sits on a competitive "map."
  • Identifying what really drives customer loyalty and creates a differential for your company.
  • Developing new products or services: understanding the price/demand curve and which features/benefits are truly meaningful to your customers.
  • Designing more effective communications: identifying "red flags" and "hot buttons."
  • Developing a contact strategy that delivers your communications through the channels and media your customers want when they want them.
  • Understanding your customers' privacy concerns: what bothers them and what doesn't.
  • Talking with lost and inactive customers and using that learning in predictive attrition modeling to develop intervention strategies.

If you haven't already begun to do so, start exploring the synergy of your database and customer research. Put the "C" into CRM.

Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access