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Relationship marketing
Everyone knows that it's easier to sell to your existing customers than it is to acquire new ones. It is said that it is 5 times easier - I think I'd agree with that! There is also the 80:20 rule: 80% of your business comes from 20% of your customer base.
From here it doesn't take a genius to realise that if you ignore your existing customers while you endlessly run around trying to win more new ones, you are missing the greatest opportunity. The Internet is a key tool for building effective customer relationships.
What is relationship marketing?
Relationship marketing is as old as trade. It involves building a trading relationship between a seller and a buyer. The strongest and best relationships are built face-to-face, but it is not possible to have this kind of relationship with all of your customers and potential customers. Instead relationships are built through dialogues and transactions in numerous environments. Maintaining numerous relationships can be an onerous task.
How does the Internet help?
The Internet is an exceptional channel for conducting dialogue and transactions efficiently, enabling you to build effective relationships with more people.
What is Customer Relationship Management (CRM)
CRM is part marketing speak, part process. It is a way of managing a large amount of relationships effectively, in order to achieve your marketing objectives. It involves :
- Data collection
- Segmentation
- Targeting
- Personalisation
- Effective messaging
- Tracking, analysis and reporting
The Internet is perfectly placed as a relationship building tool. In fact, it could have been designed to do this!
Websites enable you to collect data cheaply and easily. The data can be put directly into databases for data-mining and analysis that will enable you to segment your audience for effective targeting. Email systems deliver the targeted message, personalised using any customer data that you hold in your database. The email is trackable, as is the website that you send your customers to, ensuring you have plenty of data on the outcome of your campaign. Analytics does the rest.
A clear strategy
eCRM can operate at every level of sophistication. At the top-end you are looking at automated systems that match offers to individual customers based on their previous transactions, or even the things that they have looked at. At the lower-end, a simple email newsletter helps to reinforce brand messages and keep you top-of-mind.
Before you start, you should give careful consideration to what you are trying to achieve and understand the scale of the task that you are taking on. The opportunity is huge, but you need to invest time and effort to get it right.
Relevant resources ...
CRM: Everyone's Doing ItTesco embarks on eCRM drive
Selected UK Internet Statistics 2008
