Effective customer relationship marketing is an efficient way to drive volume and growth. Easy to say, and easy to agree with, but how can you craft a customer relationship marketing program that works for your business? You start by mining the data you already have.
Consumer research, and I’m sure you have lots, will help you understand consumer attitudes in aggregate. But, generally speaking, consumer research is a terrible predictor of customer behavior.
Direct and catalog marketers use behavior: Recency, Frequency, and Monetary (RFM), as a targeting tool. Their data shows that the customers who bought from them recently, buy from them frequently and spends the most money with them, are the customer most likely to buy again.
Data is great at telling marketers who to talk to, and sometimes what to talk about, but it doesn’t tell them how to talk to customers. Marketers can use consumer research to understand the attitudes and motivations of customers, to understand how to speak with their customers. This is very useful, especially for mass marketing where the insights from research help create advertising that can touch consumers emotionally and well as logically.
Many companies practice both approaches. They have well staffed and funded research departments, and they have data groups performing advanced analysis on transactional customer files. They have all the tools to make a significant leap forward in their understanding of consumers, which will result in much more efficient and effective marketing. But they don’t. Why? Because the groups don’t talk to each other. They function in parallel, often report to entirely different departments and have conflicting performance goals.
For effective customer relationship marketing, the two departments need to work in concert. This simple change can result in huge improvements in marketing efficiency and effectiveness.
Data-driven insight: it helps you understand who to talk to, what to say and how to say it.
Hip Shots
For effective customer relationship marketing, use data to determine who your best customers are and who the heavy category users are, and then use consumer research to understand the needs and attitudes of these highly important consumers. These are the groups, based on their past behavior, that are most likely to generate a significant ROI from marketing efforts. These are the groups marketers need to be talking to.
Follow me on Twitter
