CRM stands for Customer Relationship Management; it is a term used to describe software and methods that help to manage customer relationships in an organized way. This is a powerful tool if you are looking to build a good relationship with clients in order to improve the customer retention power of your organization.
The process includes understanding the likes and dislikes of the customer, spending pattern of clients along with other demographic information like age, location and more.
Using the CRM software building a loyal customer base becomes an easy job. Opportunities like finding customers with better prospects become readily available. As these opportunities present themselves to you, you can invest your time and build marketing strategies that are intelligent, adaptive and efficient.
Many feel that CRM is just a database while others feel that it is a technology to manage sales. The truth is that it is both; CRM is an integral part of sales as well as marketing strategy.
Here is an example about how CRM helps build customer base and a better marketing strategies:
The client that you choose has a certain spending pattern or favours a particular brand or product. Taking that data, you could design and create promotional offers for that particular client. Making a sale easier. Moreover, once you have identified the most favorable prospects, you can focus your efforts on creating a personalised buying journey for each of them.
However, this can only work if you make sure that the message is designed carefully.
According to Jason Nash of Microsoft, CRM is a business strategy that focuses on the customer and designed to improve profit as well as customer satisfaction. Sales can be boosted as the organization comes to understand their customers.
He also says that monitoring relationship and measuring the ROI becomes an easy task if marketing database, sales pipeline and delivery coincide with the company’s CRM system. If you use the opportunity properly then chances are there to boost sales from an existing customer base rather than spending money on creating a new one with new clients.
These are some of the elaborated methods that use CRM to develop marketing strategies:
The information that has been accumulated with CRM can be used to target the preferred audience. Data about customers and prospects from CRM gives you the ability to deliver the right message, to the right audience at the right time.
1st Party Data – Data generated from your CRM system including customer data, prospect data, transaction data, purchase history, etc
2nd Party Data – Data acquired from business partners. E.g. as a device manufacturer. You can also get shared customer data from your distributors
3rd Party Data – 3rd-party data is a collection of digital body language data, usually anonymous Web-browsing data from any device (laptop, mobile, etc) from external sources like Digital Marketing Platforms (DMPs)
Once you have your data, the next step is to segment them based on attributes like recent buyers, high value customers, etc for effective outreach. There are various techniques used for segmentation by marketers and one such technique commonly used by retailers RFM (Recency, Frequency, Monetary Value) is illustrated below
Kevin Donnelly with the help of Shopify, the retail software vendor created a detailed strategy to determine the customer values which can be used for determining customer segments that can be targeted.
The following methodology was used by Kevin Donnelly to segment customers:
Customer data collection on three aspects, RFM:
- Recency (recent transactions)
- Frequency (total transactions in a constant timeframe)
- Monetary value (total amount spent in the same timeframe).
Depending on the collected data, he determined the RFM value and individual scores for each customer.
Here is an example of table used by Kevin Donnelly. It has two subjects; Sam and Billy, with 1– Low Value; 2 – Medium Value; 3- Highest Value
|Recency||Frequency||Monetary Value||Overall RFM Score|
In the table above we see Billy has a lower score than Sam, meaning that Sam is of greater value and needs to be targeted. Though Billy has gone to the store more than Sam but Sam has spent more money than Billy, making him a more valuable customer.
Note: The above table is just an example, not based on actual customers.
Some marketers rely on segmentation techniques based on Scale (reach of Campaign), Performance and Cost associated to the Marketing Campaign.
You can adopt different targeting strategies based on your type of business, audience and campaign goals
An Online retailer will use a re-targeting strategy to retarget customers leaving your website before closing any transaction (e.g. exit site after adding to cart). You can immediately send an email or text message with a reminder to purchase cart items with additional discounts. In some cases, cart abandonment emails have up to 29% success rate!
Similarly, you can reach out to anonymous audience with attributes similar to your customer through look-alike targeting, e.g. Reach out to anonymous users who searched for bikes during spring season having the age range of 25-35 and residing in Bay Area, CA. These attributes are similar to Sam who recently searched and bought bike made by you. Users having these attributes are more likely to buy a bike and hence you can reach out to them with display ads or Social Ads
You can also leverage Augmented Attributes to market your product once your CRM data is extended using 3rd Party data. For example, Jim is your Retail Banking customer. 3rd Party data provides information that Jim is searching for Home Loans for the last 1 week. Create your marketing strategy to reach out to Jim with a personalized home loan offer designed for your existing retail banking customers.
Testing the Audience to Find Potential Customers
On the segments that you created using CRM data, depending on common threads like demographic and other similarities better targeted marketing strategy can be created. As you build the marketing strategies you earn highly valuable customers.
For example, suppose you name a segment “high value customers”, using this segment you can find and create similar people who can be potential customers.
Once you design your segments you can now measure the success of your audience segments by answering questions like :
Which segment is the best for targeting?
Do media interactions affect certain segments better?
Do you need to revise your segmentation for better conversion ?
These questions and their answers will play a crucial role in developing marketing strategies to improve sales figures.
The CRM data can be a great tool for targeting a prospective audience but it can be equally great as an anti-targeting tool. For an effective marketing strategy, it is imperative that you gain an understanding about which audience is worth targeting and which is not.
For example, you invest resources for Kate to promote roof replacement services but Kate is already listed in your CRM as a customer who recently subscribed to roof replacement services, hence the impression is wasted. . You must use your CRM data to suppress the customers from the look-alikes with the right content hence reducing wasted impressions and cost and increase effective conversion.
Email Marketing and Social Media Strategy
Email marketing campaigns can be used for reaching the different customer segments. Making these campaigns a success would need the maintenance of a detailed database.
Send out emails to your targeted customers with offers and content that has been curated uniquely for them. Curating this information can be made easy with the CRM data collected.
For example, the mail may contain an announcement about the launch of new merchandise. You could also add offers, coupons and other promos in the mail as well. All of this will help draw in the prospective customers.
If statistics are to be believed, an average ROI (return on investment) of $44 is gained for every $1 that is spent on email marketing.
The email list must be used in a personal way. For example, invite customers into your store using attractive offers. Small gestures like thanking customers for continued support in a personal way can be helpful in retaining their support.
You can get your customers’ Social IDs by giving Loyalty Points for any likes or comments on your owned Social Channels. Once you have your customers Social IDs you can send targeted social media ads to individuals. The chances of conversion are higher with targeted social marketing as compared to generic marketing messages.
For example – Samantha purchases shoes during festive season send her Social messages on your shoes collection during festive season against other consumers with different preferences and buying patterns.
You can extend this with personalized In-App Messaging once you gather information about your consumer’s Mobile Device IDs.
Social and App Messaging are becoming a very powerful medium for reaching out to your consumers with targeted messages resulting in higher conversion rates.
Outside-In and Proactive Customer Engagement
With the data collected in the CRM system, it will be easier to understand how the customers think and what their preferences might be.
Synchronizing this information with marketing automation lead to meaningful messaging unique to each customer or customer segment.
As your strategies resonate of how much you understand the preferences the customers will engage more with your brand and conversion rates will be on a rise.
CRM, Customer Relationship Management, is the base for building better relationship between customers and the company brand. With the huge volume of customer data accumulated by the brands over a period of time it has now become a charter for every marketer to utilize the data effectively for devising their marketing strategy. The way CRM helps is not only to increase your conversion rates and revenues through targeted strategies but also provides an enhanced and personalized customer experience.Continute to next blog