3 , 2002 Volume 2 Issue 13
In the USA yesterday was Labor Day. Monday was a national holiday. Dedicated
to the workers of America.
So, since it is a holiday, I decided to get away from the office. Meaning
this week's E-zine is mostly works from others. A couple of guys I know
who write good stuff ... it is here for you to enjoy, too.
All about Customers
Bob Armstrong has been a good business friend for a
long time. Recently we did a gig together - it was a blast! Bob wrote
me about customer service. I asked - and he gave permission - to share
his thoughts. Here they are.
You touched a cord in me regarding customer information.
The buzz word, as you know, for the past five years has been Customer
Relationship Management (CRM). Or 1-to-1. The idea being that the more
the customer tells us the better we can serve their needs and particular
The methodology behind this is that a marketer must collect information
about individual customers at each "touch point" so that these
"transactions" and "interactions" can be analyzed
in "real time" in order to crank out "relevant" messages.
What the books, lectures, seminars and gurus don't say is that this requires
a major financial investment in software, databases and more ... to manage
the system properly. Few companies can afford this.
So, the alternative becomes "database marketing" and "segmentation
analysis" - grouping "like customers" in order to conduct
"mass marketing" rather than "individual" marketing.
Nothing new here. Direct marketers have been doing this for years.
I got on the CRM bandwagon several years ago...read every Peppers &
Rogers book, went to as many seminars as I could find, to learn how to
do 1-to-1 "individual" marketing. Even got my company to make
a major investment in CRM software to build a central database warehouse
for our customer information ... a project that began 2 years ago and
is still in the "work-in-progress" stage.
In the end, we will not have the ability to interact with individual
customers at every touch point. We will have more than in the past, but
our computer retailers will not share customer information with us ...
or any of their suppliers.
Still, the object is to acquire customers by "assuming" an
attractive offer. The result may only be an awareness, if not a first-time
purchase. Statistics show first-time buyer attrition is often double that
of older customers. The commitment to repurchase is the most critical
attitude for building customer loyalty.
From then on, after the first-time purchase, marketers must gather as
much customer information as possible, analyze what works and what doesn't,
continue to segment their customers in order to increase the frequency
and average order value of purchases, and to build relationships that
result in long-time customers.
The best way to accomplish this is through "permission marketing".
Customers must be given an opportunity to opt-in and opt-out with every
communication, every transaction.
You are right ... marketers don't want to market to everyone. Permission
marketing reduces the size of the potential customer base - often by a
lot - but that is responsible marketing. What customers object to more
than anything, is unsolicited, unmeaningful marketing messages.
That leads to the discussion in Congress and State legislatures. Should
marketers be required to mail, email and telesale only to those who opt-in?
If so, that means doubling marketing expenses. We would have to mail to
a prospect or customer base to ask permission to continue mailing. Then,
delete those who opt-out - never to be given an opportunity to opt-in
at a later date because a potential message became meaningful.
The point is, traditional database marketing does not provide the detailed
information necessary for each individual customer to be able to send
personalized messages relevant to that individual customer's needs and
interests. But, it is the only affordable system we have today.
Want to know more? Or talk with Bob? E-mail me (Ray@RayJutkins.com)
and I'll pass your message along.
And - see below ... the second article in this issue is from another
marketing executive, with some sound thoughts on database marketing and
... from Monday, December 17, 2001 B.C.
I'm ready to share this "new" concept with you.
And I'm ready to do it today. To book an hour or two or three to give you
this different, interesting, meaningful, warm and true action presentation.
To your club. Your company. Your organization. Your association. Any group you
A true and "live" message. It shares putting things in perspective.
i.e., first things first. You know, like many of us (including me!) don't do.
At home or the office.
This presentation is about how each of us, in our business lives and personal
lives, will get more out of life when we re-arrange our thinking. When our actions
mirror what we know we should do. Many think one way - act another. This set
is about how to do what we know we should - and do it every time.
Interested? E-mail me ... Ray@RayJutkins.com
and let's make it happen. Look forward to hearing from you. Soon.
". . . Learn like you'll live forever."
A quote from Mahatma Gandhi. And something I live by.
Planning ahead - I'll be at Direct Marketing Thailand August 2003. Learning
& speaking. You may wish to be there too. "Click
here" for the early news; DM Thailand 2003!
CRM & Database Marketing
Bob McKim, President of M\S Database Marketing, wrote
the following article for DM News. I've "borrowed" it,
as a compliment to both Bob McKim and Bob Armstrong (see above), who reminded
me of it. This is more of a definition of differences between these two
ways to provide better customer service.
"Between database marketing and Customer Relationship Management,
CRM appears to be the most expensive method to implement.
"Both disciplines have very similar and overlapping characteristics
and implementation costs, such as getting a 360-degree view of the customer
and having all the data integrated into a common system. CRM relies more
on new technology built for its own purposes, while database marketing
uses existing technologies from established vendors.
"CRM technology promises to provide personalization to every customer
andprospect. Database marketing identifies unique segments in the database
which react to specific simulus, such as promotions.
"Both are hinderd if the data is not fully populated and if there
are inconsistencies in the data. Database marketing can be more successful
and does not have to have every customer record populated with data.
"CRM's promise is to strike up, through affinities and personalized
communication, a relationship with the customer, thus making the customer
more transactive. Database marketing anticipates customer behavior over
time and reacts to changes in the behavior. Database marketing relies
more heavily on rules-based delivery of communications. CRM waits for
the customer to interact with the system.
"CRM "assumes" that the customer wants a relationship
with the company.Database marketing is proactive to deliver information
or communication at the key times when the customer is in the buying window.
"The metrics tend to be different. CRM talks and reports on an Return
on Investment (ROI) basis. Database marketing reports activities on an
ROI basis but talks and reports on Customer Lifetime Value (LTV).
"CRM systems will take up to a year to get installed and working.
Databasemarketing systems will be up and running producing information
and results in four to six months."
"Waking up" to what's really important has taken me
decades. Too much experience and education sometimes gets in the way of
reality. Common sense sometimes isn't very common, ala Mark Twain.
Here's this weeks quote from the world's most quoted philosopher - Anonymous;
"What happens to you is not as important as
how you react to what happens to you."
Anonymous is again tough. This is all about responsibility. Something
not being taught or understood for many.
"Quotes with Direction" has been a part of my web site collection
from day one. If you like quotes visit the archives ... www.rayjutkins.com/quotes/.
There's a new batch up every 4 weeks.
Magic Marketing Minutes
2 Times 7
This is the second in a series of three lists of things you need to
consider as you select your Admail mailing list.
- What is the universe of the list you are considering? How many names
are on it? You need to know this information in the beginning.
- How old is the list? Is it as current as you need it to be? When was
the last time it was cleaned and updated? Sometimes this is very important
... sometimes it's less important. But do know the answers to these
- What is the duplication factor, if any, and does it really matter?
In other words, how many times is the same name on the list? How is
that going to affect your results -- and your cost?
- Can you select the list's most current responders -- sometimes called
"hot-lines"? And do you care? Will it affect your response?
Will it affect your offer? Usually the hot-line names, the most active
and recent names, are the most accurate, and also the best responders.
Know this as you test the list.
- What selection factors are available that are important to you? Demographics?
Geographics? Psychographics? Any other selections? What is the cost
of the selection you are considering and is it worth the extra cost?
- Are telephone numbers available so you can do a follow-up to your
Admail? If so, at what additional cost? Know from the beginning if you
can buy the phone number as well as the name and address.
- In what format is the list available? On computer tape, peel-off labels,
cheshire labels? What production questions do you have that you need
to get answered before making a list-buying decision?
Think on each of these points -- ask the questions -- get the answers.
Then make your list selection.
Ray on the Road
Ray is on a 'round the USA trip. On his Harley-Davidson. Business
and pleasure. Each week for the next two months you'll get a mini-report.
Look here for the weekly update of his findings.
Text about trip here.