Customer relationship management why bother? (slideshare)

Katy Raines

CRM – Why bother?

Christiansand, January 2012

CRM – Why bother?

A reminder of CRM

The changing marketing environment

What CRM Can deliver

Building a picture of the customer

A Good CRM system

A reminder of CRM

1. Not all customers are equally valuable

2. It costs 5 times more to acquire a customer than keep an existing one

3. Customers have different needs, which need to be reflected in your marketing communications with them

Frequency1. All customers are not equally valuable

2%

4%

26%

68%

8+ times per year

5-7 times per year

2-4 times per year

Onceper year

60%

25%

15%

% of bookers in 1 year

% o

f inco

me in

1

year

Retention2. Keeping customers costs 5x less

Lost / lapsed customers

Retained customers

New audiences

Segmentation 3. Customers have different needs

2%

4%

26%

68%

These people have different needs

From these people

% of bookers by frequency band

Ulster Orchestra, Belfast

‘Old’ model Were sending all their customer the same thing –

a large 32-page season brochure, costing £1 per issue

Return on investment 1.6:1

‘New model’ Sent different customers different things For 90% of the customers this meant sending

them LESS information, but more RELEVANT Return on Investment increased to 21:1

The changing marketing environmentDigital explosion = Consumers bombarded with content

Growth of tools and sites to ‘aggregate’ and make sense of content for consumers to digest

Expectation of content matched to need and preference

NB. This is no longer a ‘nice to have’ – it’s essential!

email content - relevant

Tailored to match my previous purchasesGeneral

message to everyone

Web content - relevant

And what about Social Media?

CRM / Direct Marketing

Organisation

Customer

Organisation

Customer

Sends direct messages

Broadcasts messages

Social Media

‘tunes in’ at various points

They are different tools for different purposes

The results

Opportunity – to build loyalty and affinity by reflecting their needs back to them with relevant (and personalised) content

Threat – customers will ignore your content as it isn’t relevant, and you will lose them

What a good CRM programme can deliverIncreased frequency from existing customers

Keeping more customers year on year

Reduced marketing costs and improved return on investment

Brand affinity and loyalty

Improved customer insight to aid business planning and programme/product development

Building a picture of the customer

The Customer

Purchasing behaviourFrequencyRecencyTypes of product Response to

commsPurchase

ClicksTimingType

Attitudes and preferences

Stated comms preferencesStated product preferences

Feedback / comments

ProfileGeography

Demographics – age, income

etc.

Social media behaviourRe-tweets

Likes

Customised communications

Picture of the

customer

Product choices

Timing of comms

Type of comms

Symphony Hall Birmingham

The Customer

600 events per year

Mostly ‘one night’ shows

2200 seats

over ½ million audiences each year

Symphony Hall Birmingham – challenges

The Customer

Too much ‘choice’ and information for the customer to make sense of

Wide range of events

Events changing daily – often going on sale at late notice

Customers are annoyed if things sell out before they’ve heard about them

Building a picture of the customer

The Customer

Purchasing behaviour

Contact details gathered /

checked with each purchase Response to

commsRecord

response to direct mail

Record ‘click’ response to

email

Attitudes and preferences

Data sign-up process gathers preferred

communication methodLater emails encourage

customers to tell us product preferences (eg.

classical)

ProfileGeo-demographic

information ‘appended’ to record to show likely age,

income etc.

Different communications

Picture of the

customer

Classical Music audiences

- Season confirmed 1 year ahead- Like to see ‘full programme’ to make

selections- Like printed brochures rather than digital

- ‘Classical music’ brochure sent by post 3 times per year

- Personalised booking form and incentives to subscribe early

- Email used as a reminder (but sparing)

Different communications

Picture of the

customer

Rock and Pop audiences

- Events getting confirmed all the time- Big names can sell out in a day- They don’t want to miss the chance to book- Are used to 100% digital communications

from competitors

- Weekly ‘On sale’ announcements, and ‘don’t miss this month’

- Reducing / minimal printed communications

Personalised e-bulletins

Picture of the

customerEvents ‘match’ customer profile based on:- Previous product

purchase- Stated product

preferences- Clicks on previous emails

Other events listed here

MARKETING EFFECTIVENESS

2008-09 2009-210 2010-1111.00

11.50

12.00

12.50

13.00

13.50

14.00

Marketing ROI (all tix)

2008-09 2009-2010

2010-11£1.15

£1.20

£1.25

£1.30

£1.35

£1.40

Spend per seat sold (all tix)

What do you need from a CRM system? (5 steps)

Initial and ongoing data capture linked to purchasing behaviour

Sensible segmentation and data analysis: Frequency/Recency Value Product type

ToolsTo implement personalised approachTo measure effect

The CRM process

1. Gather data

2. Analyse and segment

3. Implement- Product proposition- Communications

methods

4. Measure

Test

ing a

nd

refinin

g

The picture gets more detailed

The Customer

Purchasing behaviourFrequencyRecencyTypes of artform / product

Response to commsPurchase

ClicksTimingType

Attitudes and preferences

Stated comms preferencesStated Artform / product

preferencesFeedback / comments

ProfileDemographics –

age, income etc.

The messages get more effective

Picture of the

customer

Product choices

Timing of comms

Type of comms

Good luck!

Katy Raines

Partner, Indigo-Ltd

www.indigo-ltd.com

[email protected]

twitter: @katyraines