Magazine article Marketing

An Holistic Approach to Keeping Clients

Magazine article Marketing

An Holistic Approach to Keeping Clients

Article excerpt

CRM is transforming the way companies retain and attract customers, writes Rachel Miller

Everyone, it seems, is talking about customer relationship management (CRM). IT companies are peddling CRM technology, consultants are offering planning and implementation services and some organisations have already invested millions. And the sector is set to continue developing at a dramatic pace.

The CRM market is expected to grow from its current $1.2bn ([pounds]200m) to $11.5bn ([pounds]7.3bn) by 2002. Research by technology specialists AnswerSets found that 95 % of sales and marketing professionals consider CRM technology to be necessary to support existing customer databases and sources. The argument is that this isn't just about technology: it's about a new approach to marketing. Clearly, CRM is going to make some companies very rich. But will it be CRM suppliers, their customers or both?

The arguments for CRM are extremely persuasive. The technology can integrate all your customer data into one system and allows the organisation to become totally customer-focused. Every part of a company knows all about every customer, with the integration embracing new channels such as the internet.

So, if the customer has recently called customer services to complain, the sales department know not to bother them with a sales call. But if a customer has bought a certain product, the marketing department can dispatch relevant mailings to them.

"Everyone is singing from the same hymn sheet," says Lucy Jacobs, UK marketing manager at Siebel, the largest CRM supplier. The result is that existing customers remain loyal and new customers are attracted by the high-quality service.

Philip Blackwell, director of CRM and e-commerce at IT consultancy CAP Gemini, adds: "In the past, the departments of a business have been set up separately. Being customer-focused means breaking down all these barriers. You have to find every point at which the customer touches the organisation."

Advantages aside, the threat of fierce competition is also prompting companies to take CRM extremely seriously. "Many markets, such as telecoms, are experiencing increased competitiveness. Companies can easily target other people's customers," explains Blackwell, who claims even major organisations in comfortable markets can lose large chunks of business if they are not on the ball.

According to Andy Bailey, director of product services and alliances marketing at Oracle, companies "either become more customer-intimate or they go out of business".

Bailey says that businesses have three main concerns today: keeping the customers they've got, increasing their customer base, and doing things more efficiently. "Being customer-focused goes a long way to addressing all three," he says. "By offering a better service, customers stay, new markets open up via new channels, and then building increased knowledge allows businesses to realise who their most profitable customers are and so reduce costs."

Robert Scott Moncrieff, senior vice-president of marketing at consultant Sitel Corporation, agrees. "In saturated markets, customer service is becoming the key differentiator, and one-to-one marketing is now cost-effective. The rewards of CRM are that you can identify customers that are worth keeping. If a customer stays loyal to one car manufacturer, for example, they are worth [pounds]200,000 in a lifetime. And yet just one bad service could jeopardise that."

The value of customer loyalty has long been understood by the retail sector and the supermarket chains in particular. Loyalty schemes have generated incredible levels of customer data, and that information is now being used to offer customers targeted marketing messages.

Safeway has a ten-million strong database thanks to its ABC card, which features an incredible 12 billion rows of data. "We could give you a list of all the shoppers with two children that live in a shire county that bought a tin of tomatoes on a Tuesday when it was raining," says Safeway's business solutions manager, Jeremy Wyman. …

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