CRM – Is it Customer Relationship Marketing or Customer Repulse Marketing?

By Julie Ann Cohn, PhD, CEO J-Team Database Marketing, Inc.

Have you noticed that people are using “throw away” email addresses to get past squeeze pages and forced registrations on websites to get to the meat of the information they want?

It seems to me that internet newsletters, squeeze pages offering free information and repeated email solicitations have become today” new clutter in the world of advertising. With many of the service providers calling themselves CRM companies I am led to ponder the question:

CRM – Is it Customer Relationship Marketing or Customer Repulse Marketing?

In the 1980s, CRM was a term used to refer to Customer Relationship Management (or Marketing). The idea was based on building a long-term relationship of perceived value with your customers in order to increase their lifetime-value to your company. This approach was made famous by Cadillac, although they coined it as “the cradle to grave”. In the 1990s, this discipline became even more popularized by Don Peppers and Martha Rogers as 1-to-1 marketing. It was a database driven, targeted means of relationship building communication, and tracking of customer behavior. The feeling tone it created engendered loyalty and proved to increase customer lifetime value. In other words, it is a win-win for the advertiser and the consumer.

Again, in the 1980s shared mail and direct response television advertising were considered to be “the clutter” of the advertising world. As time progressed, in the 1990s, and effective reach was thought to move from 3+ to 14+ in some categories like fast food, the term clutter started to apply to mainstream advertisers. Standing out from this clutter to continue developing a 1-to-1 relationship with the customer became more disciplined and challenging. Personalization was coming into its own in a big way. Magazines were now able to insert subscriber”s names into ad copy, thus joining the CRM party; formerly exclusive fields of play for direct/database marketers.

In the 80s the focus was on building market-share. In the 90’s the focus turned to share-of-customer and share-of-wallet. Now, more than ever before, I think that we are in an environment where the focus needs to include the aforementioned and add share-of mind and share–of-heart. Today”s consumers are faced with more messages coming at them in every format imaginable. Even public bathroom stalls are not reserved for the chicken scratches of writings on the wall. Advertising is everywhere.

Today, there are many internet companies popping up claiming to be CRM providers when actually they are simply feeding the funnel with mostly suspects, some prospects and occasionally are actually performing the function of CRM by providing value-added communications to customers. Quantity has taken precedence over quality. Let’s look at how CRM is defined today and some real life examples of what is happening to see what I mean.

The resource website www.whatis.com describes CRM in this way:

CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

According to one industry view, CRM consists of:

Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team.

Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices) Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.

Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners. If the above description was what was actually occurring in the world of the Internet, that would be great. However, what I have observed is a bit different. I will share a common experience of late to demonstrate this point.

This past week I was offered via email, the opportunity to participate in a wonderful free tele-seminar given by someone I truly respect. I signed up after receiving the first email about the course. In the week that followed I received four more personalized emails with the exact same copy inviting me to participate in the tele-seminar again. After the fourth email I could not hold myself back. I sent the following email response back:

“Dear XXXX,

Thank you for your persistent emails regarding tonight’s call. Because I know and love you, I feel compelled to write you and tell you that this is an example of not using database marketing techniques. I actually registered for the call the first time I received this email. I have since received three or four of the same emails, none acknowledging that I’ve registered. This shows me three things:

1. the system you are using is not purging responders,
2. from a consumer perspective it creates a “feeling tone” of “you don»t know who I am” and
3. also from a consumer perspective, it is a turn off.

Hence, your message falls into the category of the phrase I used with you in our conversation “customer repulse marketing” instead of “customer relationship marketing”. I do not know if you can do anything about the present system you are using. However, in the future, you may want to think about instructing your vendor to purge responders from the follow-up emails and direct them to a different line. Just a thought…”

It was well received, in part I think because I had just had a conversation about this topic with the recipient. Let’s not lose sight of the main point however. IF I was not already a loyal customer of the above service provider, I would have been repulsed by the barrage of emails that did not acknowledge me as an existing customer. This happens more and more every day. I receive repeated communications from a company hitting me over the head to buy this or that, tune in for this or that, only to find when I do, the value I receive is not what I anticipated. Instead of fostering a relationship with me, they are driving me directly to their competition.

Moreover, as I said in the beginning of this piece, more technologically savvy consumers are setting up faux emails just for the purpose of signing up for stuff in order to get to the information they want. This means that the data being collected on an opt-in basis is not necessarily reflective of true prospects, those who are ready to buy. Unless you have engaged in doing business with a responder, e.g. sold them or provided them something for which you have received a valid first name, last name and complete address, you may want to use a data integrity mechanism to ensure that you have reliable information and an engaged prospect that may eventually climb your loyalty ladder.

CRM programs and continuity programs are two different things. However, in the on-line arena the lines have been blurred. List building for affiliate marketing is one thing. Customer Relationship Management/Marketing is another. I want to draw a distinction between drip campaigns, continuity programs and CRM programs that are based on the philosophy that “buyers are buyers” as long as you are top-of-mind when they are ready to buy, odds are they will buy from you. These programs are not true CRM programs because they are “working the suspect/prospect” funnel (pool), rather than managing or marketing to existing customers. The “nag factor”, a term coined by Cheryl Idell, originally referring to advertising to children as influencers to get parents to buy is now being used by internet marketers to create a greater share-of-mind. The idea is a good one. Unfortunately, the execution has some kinks. Hence, creating the opposite desired effect, turning customers off, repulsing them, instead of engendering a sense that you, the advertiser, have their best interest in mind, when they are ready.

It is important to remember your objective in all cases is to obtain, retain and extend the value of your product to your customer and of them to you, thus moving your responders up the loyalty ladder of your business. The incremental conversion and next sale are within your reach when messaging is on point and the right offer is presented at the right time (that precious moment when they are ready to buy).

To avoid becoming a Customer Repulse Marketer you may want to follow these 10 simple guidelines:

1. Define your objective based on where your responders are on the loyalty ladder from the bottom rung up:
   1. Suspects= universe,
   2. Responder= opted-in or replied to a solicitation,
   3. Prospects= expressed interest in your product or service,
   4. Customers = bought one or more times,
   5. Advocates= loyal customers who buy often and tell everyone about you.
2. Create a communication strategy based on where your target is on the loyalty ladder. Your strategy should include the appropriate creative, offer and response device for where they are on your loyalty ladder.
3. Design a tactical approach that will speak to the level your responder is at on your loyalty ladder. Show gratitude. Engage. Always provide value (what’s in it for them) and wha’s next. Do not send the same message repeatedly, change it up. For example, a responder who has become a prospect should not receive the same message that brought them to the level of being a prospect. They should receive a different communication that will result in a sale. This may require an incentive to “buy now” in order to move them up the loyalty ladder from prospect to customer.
4. Employ a data integrity mechanism to confirm interest in your product and/or service and validate the data you’ve received. Remember: garbage in, garbage out. Data integrity is critical. If you do not take this into consideration in the beginning of your process, it will cost you in the long run.
5. Purge responders from on-going repeat communications or adjust your messaging so that responders are receiving unique messaging. Increasing share-of-mind is a function of providing value with presence. Persistence offering no value will backfire in the long run.
6. Acknowledge conversion and/or movement up the ladder. This is an opportunity to up-sell, cross-sell and ask for referrals, as well as getting valuable feedback. Engage.
7. Perform back-end analysis to determine your effective reach number, e.g. the appropriate frequency of communication for your specific product/service to achieve conversion to the next level. If you don’t measure it, you cannot manage it. In today’s marketplace using a fixed effective reach number will not provide the same ROI across the board. You must determine what is right for you. Test, Test, Test! There may be a fine line between conversion and repulsion.
8. Do not de-value your list by sending out blasts for other people’s products or services under your endorsement unless you want to be affiliated with them. When you do this you lose creditability.
9. If you are using CRM software to distribute on-going communication to existing customers periodically check in with them to determine their satisfaction with what they are receiving. Get feedback, respond to the feedback and engage.
10. Remember the person who has the most data does not win. The person who can analyze, interpret and take action on the data wins every time.

At J-Team Database Marketing, Inc. we specialize in database analytics, making the information you collect actionable through a process we call “analyze, realize and actualize™”. Today, as never before, a critical need exists for an integrated, holistic and collaborative bond between your business and its greatest asset—your customers. We have created that bond for major advertising agencies including DDB, McCann, O&M, DBC and WIMC. We have also worked with Fortune 500 companies such as Disney, Toyota and McDonald’s.

These achievements stem from a business philosophy based on a realistic approach to unlocking the full potential of customer databases and a dedication to providing superior service at favorable rates.

Santa – The longest practicing database marketer in the business

By Julie Ann Cohn, PhD, CEO J-Team Database Marketing, Inc.

With retailers starting off our Holiday Season so early it seemed only fitting that we acknowledge the Father of Database Marketing, Santa Claus. Yes, that’s right. He makes his list (database) and checks it twice. You may think I am joking, but, the truth is that we all become database marketers at holiday time.

Keeping it simple:

• We all have our lists of those people in our personal lives and businesses to whom we are going to send cards and buy gifts.
• We all examine these lists to make sure we have current and accurate information on them.
• We all, like Santa, look to see who has been naughty and who has been nice.
• We all put those on our lists into groups to decide how much we are going to spend on each.
• We all head out to the stores, open our catalogs or go on-line to act upon our lists.

Now, if this does not sound like you, then bah humbug! If it does, welcome to the world of database marketing.

Your list is like a database. When you look to see who has been naughty or nice, you are participating in database analysis by examining each individual’s relationship to you. Based on this relationship, you then group or segment your list. Based on your segmentation, you determine how to spend your “marketing” dollars. Then you execute your plan. If you are like most of us, you hope that your gifts hit the mark, bring joy or fulfill a need. You take pictures of reactions or judge the success of your gift choices by the “thank you” you receive. This is your way of determining your return on investment. With this information in hand you make your mental notes, strategy, for next year.

How cool is that? I bet you didn’t even know that you already have it within your skill set to use database marketing techniques in your personal life. Then again, that is where it all starts.

Database marketing is a discipline that arose from the need to move large amounts of information from our heads to our computers. It went from being only an art, to being a science also. When it was only being done by the Corner Grocer and Santa based upon relationships, it was manageable. After all, you know who your top three clients are, right? But do you know who among your entire customer base represents the top 80% of your revenue? Do you know who to reward for their business? Do you know who to ask for referrals? Do you know…wouldn’t you like to?

With so much data available it still amazes me that so few companies are engaged in the process of understanding their customers in a way that will make them more profitable. Even today, companies spend thousands and sometimes millions of dollars on systems for data collection and then do nothing with it. Harnessing the data is only the first step. To really monetize and maximize your data you must ANALYZE, REALIZE AND ACTUALIZE your database. This is what we specialize at doing at J-Team Database Marketing, Inc.

Have a very happy and prosperous holiday season!