CRM is nothing new you know

I agree with David Benady’s article “Hold on and don’t let go” (MW April 18) that companies can do more for their existing customers. The marketing industry has a major issue with “customers”, “sales” and “profit” and the buzzword “CRM”. Yes, this is important to a business, but too often marketing managers are focused on delivering increased sales and profits in a 12-month window for a particular financial year, as opposed to looking at the longer term. And increasing sales in the short term to many clients is more about acquiring new customers.

People still have the perception that CRM is complicated. However, think about it, CRM is not new; it’s what the local butcher did years ago when he gossiped with his customers, got to know them and ordered special joints of meat in when he knew it was a family member’s birthday. The end result was loyalty and increased sales.

Throwing points or loyalty schemes in at this stage of the CRM boom can be a bit of a red herring. While it does work, we should ask, is “buying customers” with money-off schemes the same as promoting loyalty through treating them well?

The first step for any company is to understand who their customers are, how much they are worth and what will make them stay. The most cost-effective way to do this is to go back to basics and use classical market research and analysis techniques. Sure, it can be done with six figures worth of CRM software, but to really measure how well CRM works, it’s fundamental to understand how valuable your customers are.

Profiling enables better targeting of resources to achieve the maximum return on investment.

Companies need to understand what they are trying to do and who they are targeting at least as part of the implementation of CRM, if not before. They should remember though that the best way to capitalise on this understanding is to act on it and so anyone undertaking analysis should be mindful of the bigger picture. Analysis without implementation is as wasteful as implementation without analysis.

John Regan

Managing Director

Cognisance

London

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