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Marketing in CRM

Marketing in CRM. © 2006 Brian Broadway. "The purpose of business is to create and keep a customer." Theodore Levitt, The Marketing Imagination. Lester Wunderman said:. “People don’t want quarter inch drill bits. They want quarter inch holes.”. The Underlying Premises.

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Marketing in CRM

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  1. Marketing in CRM © 2006 Brian Broadway

  2. "The purpose of business is to create and keep a customer." Theodore Levitt, The Marketing Imagination

  3. Lester Wunderman said: “People don’t want quarter inch drill bits. They want quarter inch holes.”

  4. The Underlying Premises

  5. the single most important asset of your company is . . . Premise 1 Your Customers!

  6. Average Sales Example

  7. not all customers are created equal Premise 2 The Pareto Principle

  8. Annual profit % of Sales DIET COKE $59.15 8% 84% 13% $9.15 8% 3% $2.11 8% 0% $0 76 % % of Households

  9. Premise 3 • it costs more to acquire a new customer than to keep an existing customer

  10. Cost The Reason to Focus on Relationships Reputation Products Service/Support Expectations None Relationship 0 0.05 0.1 0.15 0.2 0.25 0.3 Why customers stay loyal

  11. The Ad Spend Disconnect* *The Economist, April 2, 2005

  12. Concepts and Definitions

  13. Marketing Concept • Satisfying want or need (at a profit) of customers • Satisfying through mutually beneficial exchange

  14. Persuading Groups of Buyers Transacting with Individual Buyers Bonds with Lifetime Customers Customers as Co-Creators Time Frame 1970s-1980s Late 1980s to early 1990s 1990s Beyond 2000 Managerial Mind-set Customer is an average statistic Customer is an individual statistic Customer is a person Customer is individual & part of social group Interaction Market Research Shift from Selling to helping Provide for customers based on observations Co-developers Communication One-way, targeted groups Databased communication Relationship marketing Active dialogue The Evolution of Customers* *Co-opting Customer Competence, Prahalad & Ramaswamy, HBR on Customer Relationship Management

  15. Permission Marketing Definition • permission marketing • Marketing centered around obtaining customer consent to receive information from a company. • Coined and popularized by Seth Godin, permission marketing is the opposite of traditional interruption marketing. Permission marketing is about building an ongoing relationship of increasing depth with customers. In the words of Seth Godin, "turning strangers into friends, and friends into customers." • Permission marketing has been hailed as a way for marketers to succeed in a world increasingly cluttered with marketing messages

  16. 1to1 Definition • Focused on the individual customer, one-to-one marketing is based on the idea of an enterprise knowing its customer. Through interactions with that customer the enterprise can learn how he or she wants to be treated. The enterprise is then able to treat this customer differently than other customers. However, one-to-one marketing does not mean that every single customer needs to be treated uniquely; rather, it means that each customer has a direct input into the way the enterprise behaves with respect to him or her. http://www.1to1.com/Glossary.aspx#O

  17. CRM Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing, developing, and maintaining successful customer relationships. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention.

  18. Why Have a Relationship? • Customers expect: • excellence in products • excellence in service • A Competitive Advantage • excellence in building and maintaining customer relationships

  19. Interactive Marketing Direct selling to individuals Medium is the marketplace Marketing controls process through to delivery Ads used to generate response Customers assume more risk Products delivered direct to consumer Traditional Marketing Mass selling to broad groups Retail is the marketplace Marketing loses control at distribution (channels) Ads used to build awareness Customers perceive less risk Consumer must deliver themselves to the product Interactive/CRM vs Traditional Marketing* *Contemporary Direct Marketing, Spiller & Baier

  20. Segmentation

  21. Marketing Strategy Segmentation Targeting Positioning Key Concepts of Marketing Strategy There are three components of a traditional marketing strategy:

  22. Segmentation Segmentation divides the market into useful sub-units of similar consumers based on: • Demographics • Geography • Psychographics • Cognitive and behavioral attributes

  23. Bases for Segmenting Consumer Markets • Demographic and socioeconomic • Age, gender, marital status, household size, household lifecycle; religion, race/ethnic group, nationality, income, occupation, education, social class, asset ownership • Geographic • Country, region, population density, population size, climate

  24. Bases for Segmenting Consumer Markets (cont’d) • Behavioural and situational • User status, loyalty status, usage rate, purchase occasion, buyer readiness • Psychological and psychographic • Personality, motivation and needs, consumer attitude, lifestyle • Benefits sought • Time-savers, self-improvement

  25. Interactive/CRM Segmentation • Behaviour • Purchases, payments, media used by customer • Collected Information • Surveys, preferences, • Analysis by Modeling • Regression, neural networks, etc

  26. Market Segmentation Market Target Strategy Strategy Focus Market(s) Example Mass Customer Full market Pepsi and Coca - Cola in m arketing similarities coverage global markets Multi - segment Unique customer Two or more Selli ng both sports cars M arketing characteristics segments and family sedans Niche m arketing Unique product/ Premium price Cutting - edge, high - tech (single - segment) service features markets personal video phones One - to - one m arketing Highly specialized Mass cust omization Custom homes, cars, (single - segment) needs and wants m icro - markets tailored clothes Target Marketing Strategies NB: A traditional approach

  27. Interactive Marketing Media

  28. Interactive Marketing Media • Direct mail • Telemarketing • E-mail • Web sites • Broadcast • Print

  29. The Basics of Direct Mail

  30. Types of Direct Mail • addressed mail • unaddressed mail • co-op envelope, including card decks

  31. personal (if addressed) • highly selective • highly responsive • excellent testing vehicle • most flexible of DM media Benefits of Direct Mail

  32. Disadvantages of Direct Mail • relatively expensive • requires long lead times • exacting technique with many pitfalls for the unwary

  33. Relative Value of Components

  34. The Basics of Telemarketing

  35. Definition of Telemarketing • a systematic, targeted and professional medium used to generate a measurable response

  36. Types of Telemarketing • Inbound • 800/900 numbers • Outbound • proactive sales and/or follow-up

  37. Inbound • fulfil literature requests • sales lead generation • dealer location • order taking • promotional messages • market research Applications of Telemarketing Key Characteristics - reactive, 24x7 service, consumer/business

  38. Applications of Telemarketing • Outbound • direct mail follow-up • credit card marketing • market surveys • marginal account management • lead qualification • database maintenance • etc

  39. Do's and Don'ts • Dont's • expect immediate paybacks • take shortcuts • 'wing it' without a script • forget to test • Do's • plan • test • involve ALL appropriate departments • train TSR's • develop reports

  40. Kobs’ 7 Principles* • Know the target audience • Get off on the right foot • Develop “natural tone” copy • Encourage dialogue • Anticipate questions/objections • Close, close, close • Don’t wear out your welcome *Contemporary Direct Marketing, Spiller and Baier, pg. 181

  41. The Basics of e-mail

  42. Pros Speed Flexibility Low Cost Cons Viewed as SPAM Service provider filters Intrusive Pros and Cons

  43. E-mail Considerations* • Must examine, measure and test: • ‘from line’ • Subject line • Filtering • Day/time of delivery *From 24.7 Canada CMA Handouts, May 2004

  44. E-mail Metrics* • Successful events • Open rates • Click through rates • Opt-out rates *From 24.7 Canada CMA Handouts, May 2004

  45. The Basics of Internet Marketing* *this section from Contemporary Direct Marketing, Spiller and Baier, Paerson, 2005

  46. Internet Evolution • brochureware • customer interactivity • transaction enabler • one-to-one relationship • real-time organizations • communities of interest (COINs)

  47. Pros wide reach convenient selective low cost creative interactive flexible Cons limited reach privacy security ethical issues no tech support Pros and Cons •consumer control

  48. Web Metrics • hits • pages • visits • users • identified users • navigation path

  49. Web Goal • A sticky site • to enable a “mutually beneficial exchange”

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