Customer Relationship Marketing – 5 Guide Posts

Customer Relationship Marketing is hard. It’s confusing.

“They didn’t teach me any of this in B’school.”

Let me help. I’ve done it before. Many times actually.

When you develop a Customer Relationship Marketing (CRM) strategy there are five guide posts to keep in mind. Each is a subject in its own right so this will present them at a higher level. We will explore each in detail in this blog, or there are many blogs and books on the subject.

Relationship Marketing Principles

Here are five Customer Relationship Marketing Principles to consider as you craft your relationship marketing strategy. They are based on practical experience developing relationship marketing strategies for companies in Europe and the US:

1. Attract the right customers for the right reasons
2. The most crucial time is the beginning
3. In established relationships continually reinforce the decision to buy
4. Good customers expect to be rewarded
5. The second most crucial time is when the relationship is at risk

Customer Marketing Insight

The customer’s point of view isn’t the same as yours. I’m sure you read this and think, “Now there’s a blinding flash of the obvious.” Well, it may be, but the evidence suggests marketers don’t understand the consumer’s view. Customers view brands and marketing communication efforts from the perspective of their interests and needs, not the marketer’s. Mostly, they don’t pay any attention at all. Sorry, but it’s true.  Unless they have entered the purchase funnel all your expensive advertising is at best nothing more than an annoyance.

What does this mean to your relationship marketing strategy?

If your advertising is being seen at all, it is more likely being seen by your customers, than by your prospects. They’ve already made a commitment to your brand.  It may only be a shallow commitment but it’s more than the prospect have made so they will pay attention. Reinforce the purchase decision. Talk about things your customers, especially heavy users, value. Don’t insult your customers in your advertising.

When your customers have engaged in the purchase funnel give them the information they need in the medium they prefer.

Don’t talk to customers as if you had never met. It sends all the wrong messages when the sales guy in the plaid jacket shows up at a long-term customer’s door step.

Target Audience

“It’s the heavy user stupid.”

The investment in relationship marketing will return many times over when it is directed at heavy users, the 20% of customers who generate 80% of your revenue. They will value the effort. The rest, not so much. So don’t waste your money and their time trying to convince them that they should buy more juice when they don’t have children.

Customer Relationship Marketing Strategy

It’s a strategy not a tactic. And a Customer Relationship Marketing Strategy, like any relationship, takes time to develop and pay off.  Give it time to mature and evolve to suite your business and your customers. Be sure you have buy in at the highest level.  You will need the CEO or CMO to keep the CFO at arms length while you refine the strategy. The results will come.

Second, don’t expect to build a relationship with all your customers. It’s not going to happen. And it doesn’t need to happen. If you can achieve a connection with your best customers, an emotional connection that goes beyond the functional benefits of your product, then the Customer Relationship Marketing Strategy is working.

Implementation

The primary goal of relationship marketing is … creating a relationship. You smile, but pay attention, it means something to the implementation of your strategy. There will be a stream of communication going to your best customers that doesn’t sell anything. Can you feel the tremors from the CFO’s office?

“Oh my God, Marketing has gone crazy, again.”

Don’t lose focus. The relationship is worth something to the organization. In fact it’s worth a great deal. In this age of commodity products the emotional connection you build between your brand and heavy users may be the only competitive insulation you have.

Attrition is that sucking sound you can hear but can’t see.

Business building is a key part of a good relationship marketing strategy, if it’s not executed in isolation. Use your connection with the core of your heavy users to inform what you say and you say it in the communication stream. Understand what your customers are interested in/need by tracking their behavior and interaction with the relationship marketing communication stream. Use this knowledge to limit sales efforts to customers who will have the greatest interest in what you are offering. The result will be lower execution cost and higher conversion. Can you feel the CFO relaxing?

Obviously this is a big subject. Books have been written about it. So take these guide posts and use them to inform your thinking and research as you develop your own Customer Relationship Marketing strategy.

Tagged as: Best Customers, CRM, Customers, Heavy Users, Marketing Strategy, Relationship Marketing, Relationship Marketing Principles