Archive for July, 2011
For about 15 years it has been hoped CRM that would support better one to one marketing, segmentation, targeting, customer analysis, busines decision management and let alone more effective and efficient customer service.
“Unfortunately, the reality did not meet the promise. According to a MIT Sloan School study, 55% to 75% of firms fail to meet the expected return on their CRM investments. Furthermore, research from marketing consultancy, CSO Insights, indicated that less than 40% of companies had end-user CRM adoption rates above 90% of full capabilities. Simply put, CRM has yet to deliver the goods.“
The MIT Sloan School Study makes some very salient observations:
“Most senior management teams have an unbalanced approach to managing marketing investments, and this is particularly evident in the case of CRM. They focus on the key resources in which they invest capital, such as technology, location and advertising, but ignore the commensurate investment of time, energy and talent to develop the capabilities required to leverage those investments.“
Despite the challenges the case for CRM is still compelling and we have learnt much to improve integration and implementation. Some best practices are detailed in the article:
- Align CRM to your Business Strategy
- Start small but don’t under-invest
- Ensure marketing is up to the task
- Don’t neglect the human dimension
Read more online in Strategy: How to fix Customer Relationship Management by Mitchell Osak.
““less data is more.” How can your firm start a data diet?”
1. “Keep only the data that is needed for forecasting and execution”
2. “Collect only what is strategic to your business”
3. “Adopt a cross-organizational approach to data collection and management”
“How much information you collect will depend on the organization but the decision inevitably will boil down to the value and usability of the data versus the cost and risk of keeping it.”
The article Relationship Marketing: Old wine in a new bottle? presents a very good discussion that starts with “Why is marketing not working?” and the need for organisations to allign themselves to ensure a customer focus in a changing environment and consumers.
It describes the evolutions from transaction to relationship marketing and from reactive to proactive and even collaborative marketing.
The increasing importance of CRM is put in context:
- “When you lose a customer, you lose his lifetime value.
- A 5% increase in customer loyalty will result in profit increase of more than 25%.
- In nearly every industry, 20% of customers account for 80% of the profit.
- Seven out of ten customers switch to competition due to poor services.
- It takes up to twelve good experiences to overcome one bad experience of a customer.“
“These made marketers realise the advantages of CRM – increased loyalty of consumers, decreased transaction cost, delivery of consistent, high quality customer experience, more repeat business, improved cost management and increase in profit.“
The essential organisational change management required is put in context, as is the role of technology and the fact that CRM is not panacea for ailments.
“CRM as an integrated business strategy that places customer at the centre of a business’s consciousness. The organisation should align all channels and business processes against target customers based on their value to the business and establish an enterprise-wide means for capturing, analysing and shaping customer behaviour. The business objective of CRM should be clearly understood and a consumer-centric culture should be fostered across the organisation. It should be understood that fundamental changes in the way customers are treated cannot happen by some reworking of the sales and marketing departments. The whole company- the way it’s organised and managed, the training imparted to the employees, evaluation and reward schemes for the employees – must be reworked.“
The conclusion summarises well:
“Relationship marketing has evolved from the age-old paradigm practised by the corner shops. The changing consumer behaviour made it imperative that the companies align their processes and practices with the consumer at the centre and not their products. CRM is thus a process to build profitable relationship with customers, thereby fostering repeat business. For successful implementation of CRM, the whole organisation culture – the way people think and behave – needs to be made consumer friendly. Any marketing paradigm, be it relationship or collaboration based, can prove effective only if marketing is seen as a philosophy cutting across the organisation and not as a functional silo performed by marketing department.“
He shares his perspective as a producer to a variety of marketing issues such as subscriptions, memberships, pricing and discounting. The programming focus makes for interesting (if not colourful) reading:
“… fuck subscribers. I’m so tired of subscribers. They drive me nuts; they’re strangling me; I hate them. I don’t care how good they are; I don’t care how much money they bring in. Fuck subscribers! And someone there at the table said well if we’re going to fuck them we should tell them we love them first, and we should figure out a way that we can fuck them but they stay anyway. How could we have it all?“
Intrinsic Impact has been launched by WolfBrown as a free resource for arts managers, board members, students and others who work in the cultural sector. The site aims to change the conversation about the benefits of arts participation, disseminate up-to-date information on emerging practices in impact assessment, and encourage cultural organizations to embrace impact assessment as standard operating practice.
“How are people transformed by arts and cultural experiences? This question cuts to the core of both policy and practice in the cultural sector. Yet, aside from talking to audience members at intermission or watching visitors as they move through an exhibition at a museum, the sector lacks an established means of assessing non-financial outcomes.“
“While much has been written about the economic, social and other instrumental benefits of arts programs (i.e., the arts as an instrument of achieving some other end), the intrinsic benefits of cultural programmes have not been investigated with much regularity. One might argue, however, that without intrinsic impact, other benefits cannot occur. In other words, if the experience itself is unremarkable and does not create meaning, it is quickly forgotten and little benefit accrues.“
“We assume that audiences and visitors are different, somehow, after an arts program than they were when they first walked in the door. But, how are they different? Is it possible to measure what happens to people in their seats in a theatre or concert hall, or as they stroll through a museum or gallery? Do different kinds of cultural experiences create different impacts?“
“The answers to these questions could shed new light on how arts and cultural organizations create public value, and could profoundly influence both policy and practice.“