It doesn’t matter how big or small your organisation or to what extent you input and then use customer data the premise is always the same: To implement a process to improve customer communication to achieve your desired objective.
Customer data is the heart of all CRM activity. Data about known behaviours is captured and manipulated to provide insight of the best prospects and customers to receive a particular communications – i.e. higher value customers are identified and treated with an optimised communications treatment. The aim is to gain insight to offer services/products, in which they are known to have an interest and the focus of the communication generally moves from “interruption” to “invitation”, as communications are targeted only those that are likely to receive them positively.
CRM is also known by a focus on retention. CRM focus is about “closing” communication gap; building a “dialogue” with customers and using data to refine the nature of the marketing offer to keep customers loyal. The more loyal customers are, the less likely they are to churn. So, CRM is an approach that treat customers as individuals and defines them, not only by their individual characteristics, but also by how they have interacted in the past. The key is to identify nuggets of insight that could improve on-going communications. In short, data about historical interactions is integrated into the decision making process and used to ensure all customers receive a marketing mix tailored to their own requirements.
The 4 Pillars of CRM
- Continuity of communications – series of on-going communications that are connected. Emphasis lies in making a profit (tangible: sale or intangible: insight) on each interaction.
- Focus: Generate life-time value.
- Improve Interaction – develop creative communications that generate positive customer engagement. Emphasis lies in making sure the customer have access to a vast number of touch-points that are connected, recognise historical interactions and deliver relevant and timely messages.
- Focus: Identify the right channels to engage with customer.
- Target customers with relevant communications – use historical data to inform future communications. Emphasis lie in targeting profitable customers and avoid recruiting poor customers.
- Focus: Past-behaviour data is crucial to inform customer acquisition strategy.
- Control to inform best marketing activity – pre-test every dimension of a CRM activity. Emphasis lies in identifying the best audience, creative, copy or headline to increase CRM efforts to achieve business objectives.
- Focus: Optimise and select the most effective communication for the selected target audience.
In practise what does this mean? It means understanding your customer and ensuring that everyone in your organisation is capable of communicating quickly and effectively with them using the right tools, techniques and message.