CRM That Will Get You Noticed

We all read so much these days about customer relationship management (CRM). Seems it’s now in vogue to spend a lot of money on new computer software and hardware that will enable companies to have an ongoing relationship with their customers.

Indeed, companies are trying to aggregate all their customer and consumer information from disparate systems and sources into one database that will give them a better picture of customers’ and prospects’ behavior, thereby helping them manage their contacts in a more effective manner.

It sounds great ... but as a consumer, I haven’t noticed anything yet. I haven’t noticed my favorite catalogs treating me any differently when I call, now that they have all of this information. I’ve noticed only a few of my favorite Web sites sending me relevant e-mails and offers. I don’t feel these companies communicate a message to me that I’m valuable to them any more than they did five years ago. And with most of the companies I buy from, I’ve been doing business with them for many years and have a large lifetime value. Yet this doesn’t seem to be exploited.

Relationship Mechanics

There are two vital aspects of managing a relationship: communication and behavior. From the first time we meet someone, we’re gathering information about our new acquaintance and sharing information about ourselves. This two-way communication begins forging the relationship. If the communication stops, most likely the relationship will come to an end. Likewise, if the communication becomes only one-way, the relationship eventually will die.

The second part of a relationship is behavior. Do you like what the other person does or how he or she acts? Do you want to keep company with this person? Will you learn something from them or be able to teach them something you know? Do they behave in a manner congruent with what they have communicated?

In order to maintain an effective relationship, we must communicate our thoughts and feelings in a way that is relevant to the other person, and we must behave in a manner that is desirable for the other person so he or she will continue this relationship. One without the other eventually causes problems.

If I say I love classical music just as you do, but I never want to go to a symphony concert, you will eventually question my love of classical music. Likewise, if I go to every symphony concert with you, but speak vehemently about my disdain for the music, you will eventually ask me to stop going and will question my motives.

Relevant Behavior

The mechanics of the relationship between consumers and companies is not that much different. Companies communicate with consumers via their printed catalog and/or Web site and through other advertising media. Consumers communicate with companies by responding to questionnaires, through e-mails, participating in focus groups, writing letters or calling. The behavior between a company and a consumer comes at the point of personal or transactional contact. This is the point where the effective communication is tested. How was the customer treated on the phone? Did the package arrive when they said it would? And on the customer side, did customers buy the items that got the best response in the focus groups? Did they respond to the new service that was frequently requested?

Certainly, an effective relationship between a company and a customer probably relies more on the behavior (the transaction) than the communication. However, we know the communication must still be there—you have to mail catalogs to get response. In addition, the relationship is a little more one-sided—the company probably wants to relate with the consumer more than the consumer may want to relate with it.

So, why haven’t companies started treating or talking to me differently? Why haven’t many of them tried to be more relevant to me in order to build our relationship? I’m not sure, but I have some conjecture: time, budgets, system constraints, focus, priorities, vision, etc. Yet, the industry is abuzz with the concept of CRM.

CRM That’ll Get You Noticed

While I don’t believe any of the following are revolutionary concepts, getting them implemented would be a huge breakthrough:

Use customers’ past behavior (transactions) to communicate to them in a relevant fashion:

1. Send e-mail offers based on past transactions. I’ve bought a few hard goods from Coldwater Creek, and I’m a former customer of Milepost Four, a title it used to own. I’ve never purchased women’s clothing from them, yet I receive promotions for women’s clothing in my weekly e-mails. I haven’t responded to one, but I still get them. Their offers aren’t relevant to me and, in fact, can start to become annoying.

On the other hand, one of my favorite wine sites, Brentwoodwine.com, sent me an e-mail promotion for free shipping on a brand of wine glasses that I purchased a few months ago. I bought only six at the time, but this offer was compelling enough to motivate me to buy another six.

2. Use cover wraps and dot whacks to tailor a message. Find groups of customers with certain behaviors that are similar, and speak to the segment with a customized message. I often use this approach for problem segments (e.g., inactives or low average order), but it can be used to demonstrate relevance to your best customers.

For example, if you sell women’s fashions and you have large groups of customers who bought your basic shell or turtleneck last year, put a message on the catalog cover to tell them the item is now available in five new colors.

3. Say “Thanks for your order!” in the package. I’m amazed at how underutilized the outgoing package is as a communication tool. This is the next point at which you communicate with your customers after they’ve placed orders—and the delivery of this communication is free! You want them to be as happy as they were when they decided to buy; yet many catalogers don’t even put a “thank you” message in the package. A relevant communication point (maybe even about their specific purchase) would go a long way toward getting that coveted second or third order.

Use customers’ past behavior to transform your behavior with them into something relevant:

1. Put information in front of the phone reps and train them on how to use it. Next time you call your favorite catalog company, wouldn’t it be nice to hear them say something like: “Oh, Ms. Smith, I see you’re a very good customer, and we’d like to thank you for your past business.” Or, “I see you made a return recently. I hope that was handled effectively for you.” Or, “I see you ordered from our Web site. I hope you found the experience satisfying.”

Customers want to know that you know they’re good customers and that you care about doing business with them. Acknowledging past transactions makes them feel more as if they are shopping with someone familiar, instead of just being a customer number and source code.

2. Use information on your computer system to expedite the transaction and make the customer feel special. I’ll never forget my first repeat order of a pinpoint shirt from Lands’ End. The Teleservices Rep (TSR) said, “Would you like that in 16 32/32 again?” Wow, did I feel like they really cared about me to even know that.

3. Load every new customer’s name and address into a temporary file to use when entering them from a rental list. There’s nothing more confounding than when you make your first purchase from a cataloger, and the TSR has to key in all of your information again. As a customer I think, “You mailed me this catalog, but you don’t know who I am?”

Of course, you can’t add the customers to your database until you own the name (they buy from you), but you can keep their address information in a file to be accessed by name or number when they do respond.

Like I said, these aren’t breakthrough concepts, but for some reason they’re not being executed. If you’re able to get the support of the appropriate decision-maker in your company, maybe you could be among the first to successfully implement CRM —and perhaps even in the form of something the customer will actually notice.

Phil Minix is executive vice president and general manager of J. Schmid & Assoc. Inc., a direct marketing consultancy in Shawnee Mission, KS. He can be reached at (913) 236-2408 or at philm@jschmid.com.