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Dot Com Wisdom
Believe it or not, dot coms can teach traditional marketers a thing or two about customer relationships.
For the rest of the March 2001 issue of CRM magazine please click here
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Many would say that dot coms failed to capitalize on the traditional database marketing lessons used by "old-fashioned" marketers. And while that may be true, the reverse is also true: Many dot coms have a new standard for creating and managing relationships with customers, one which all companies--both online and off--will need to meet. Despite high failure rates in the dot com world, there are many lessons to be learned from Internet providers about how to manage customer relationships. These lessons apply in both the click and mortar worlds.

Specifically, many of the principles employed by savvy Web marketers can and should be applied to all aspects of customer relationship management. Organizations defining their core CRM principles should look at incorporating Web principles, such as Permission, Relevancy, Value and Dialogue.

Permission

In the world of one-to-one marketing via the Web, permission marketing in its purest form means No Spam. It's about asking for permission before sending e-mail offers to customers and giving them easy ways to opt out. Most companies are doing an excellent job of getting permission from customers online, but it seems to stop there. However, permission is just as important and just as powerful across all aspects of the customer relationship.

In fact, efforts to obtain permission should be initiated during the courtship stage, before a prospect even becomes a customer. In the product push, acquisition-focused world, it's hard to imagine a telemarketer asking a prospect or new customer, "Is this a good time to talk?" But ideally, if we truly want to have a relationship with customers, that's exactly what we should do.

At the very first contact, we should ask our customers what channels they'd prefer for future interactions. We should get permission and then follow through to learn how and when they want to hear from us. Asking permission is scary for most marketers, because they believe most prospects and customers, when given the choice, would answer "Don't contact me at all!" But without permission, it really is hard to have a relationship with customers. The challenge, then, is finding the best ways to secure permission. Relevancy and value can make the difference.

Relevancy

People seldom form relationships with others unless there is some common bond. They may continue a conversation with a stranger because they quickly discover they have common interests. Forming relationships with customers also requires that we find relevant shared interests.

Very simply, that means we need to spend time and effort early on understanding who our customers are, and what their likes and dislikes are. We can't guess those needs, preferences and attitudes--we have to ask. And we have to remember that people's likes and dislikes change. So, over time, we also need to track and remember those changes. We need systems and databases that will capture the nuances of the dialogue (demographics, interests, preferences and behavior) at each point of contact.

Most importantly, we need to use that information to ensure relevance in all aspects (service and sales) of the relationship, through each point of contact. Customers will stop revealing information about their likes and dislikes if we never act on the information to tailor our communications with them. So, don't ask for more than you think you will use.

Value

Savvy e-marketers have learned that the key to getting permission is providing tangible value. Customers are willing to receive e-mail if they think they'll get something of value in return. That same principle applies to CRM. Customers will seldom prolong a relationship with a company that does not provide value. Value can take many forms beyond the immediate value of purchased products or services. Convenience, speed, ease of access, responsiveness, trust, integrity, education and service excellence are, in varying degrees, parts of the value equation for customers. This is where relevance and value have to merge. Understanding what constitutes value to the customer will be critical to maintaining and growing the value of the relationship to the organization.

A previous Customer Care column discussed the Customer Experience Cycle (October 2000). Understanding this cycle for each customer can help you figure out what is valuable to him. If you know what stage of the purchase cycle he falls in and you have researched his role and his needs in that purchase cycle, then you'll have a very good idea what will create value for him at any given time.

Dialogue

We've asked permission, and we think we know what might be relevant. And we think we even know what will be valuable to the customer. The next step is to create a dialogue. This may be the hardest of all for marketers and service personnel. Traditional marketers are great at one-way communication. They know how to generate leads and how to market products. Service and call center staff are used to having conversations with customers in certain controlled situations. They know how to respond to customer inquiries and answer the specific questions they are most often asked or how to solve a customer problem. But marketers and service personnel have not been traditionally trained how to actually create a dialogue with customers.

Web marketers know that they need to focus on providing content or information as part of the value proposition. Dialogue for them means giving a little to get a little. "If I provide you with some needed information, you'll tell me a little bit about yourself." And the exchange of information--the dialogue--goes on until the customer has told the Web marketer all about her attitudes and preferences and has given permission to "keep her updated" on products and services of interest. Marketing or sales no longer look like self-serving promotion. Instead, the dialogue has transformed the sales message into what is perceived as exceptional customer service.

Measuring Results

Marketing performance typically has been based on advertising reach or how many pieces mailed or perhaps on direct mail program response. Service and support personnel typically have been measured on how quickly they successfully complete a call and resolve a customer problem. But you cannot measure the immediate impact of creating a dialogue. While these traditional metrics are important, measuring performance in a CRM environment requires looking at the long-term impacts on customer lifetime value.

Though Web marketers may not know everything they should about how to track and measure promotions or how to acquire customers profitably, they have set the standard for delivering value and relevance and for creating a dialogue with customers. Click and mortar marketing, sales and service managers must now rise to the challenge of profitably adopting and operationalizing permission, relevance, value and dialogue across all points of contact.

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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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