How can I get marketing done on a budget?
Posted Sep 27, 2002
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While it is every marketers dream to have an unlimited budget, the dream is far from reality. Unfortunately, one of the most elastic budgets in an enterprise is marketing. Thus, when business falls on tough times, or when companies are just launching, marketers need to stretch their budgets more than ever before. And here's how to do it; it's actually simple and straight forward. First, remember four fundamental truths: a) it costs more to acquire a new customer than it does to retain and cultivate an existing customer; b) consumers are bombarded with countless unsolicited messages everyday; c) knowledge-based communications generate higher response rates and yield greater returns on marketing investment; and d) automating your customer communications process reduces campaign time-to-launch and costs. Setting these four boundaries will help you build revenue-growing marketing programs and you'll look, sound like, and be a hero to executive management. It's all about wallet-share. Customer acquisition costs today are out of orbit. The fact is a loyal customer is a returning customer and this means extending your wallet-share of that customer and increasing their lifetime value. Let's face it, the highest dollar spending and lowest ROI is investing in campaigns to attract new customers. In this new order of an online economy -- digital cable television, a return to radio, and promotions embedded into everything we do, requires a large amount of money to rise above the noise. Instead, orders of magnitude and smaller financial outlays can be achieved simply to maintain the relationships with customers you have -- and the referrals they generate. Rise above the noise. This second truth is a logical conclusion of the first: with all of the messaging drowning your customers and prospects, you cannot win the "arms race." Instead you need to find a new method which starts with gaining your customers' and prospects' permission. There is much to be said about permission-based marketing. The essential point is, develop mechanisms to cut through the noise with succinct, meaningful, anticipated, relevant, and trustworthy messages. A simple example -- when acquiring customer information from any point-of-sale, add a yes/no question for permission to contact them in the future with opportunities of interest to them. The reputation for honesty and integrity you build will galvanize customers, and the permission-based approach will ensure your campaigns gain the attention they deserve. Know thy customer. It also follows from the previous two guidelines that if you build campaigns on the customer intelligence you have, your response rates will skyrocket. The fact is customers want to know that they are more than merely a customer number and a revenue event. Customers who are treated in a personal way will act more favorably. The social-psychology research on this is filled with studies and real data on this point. For example, a very simple addition to gathering customer data is to ask for a preferred name or nickname. Always use the nickname in communications thereafter because it personalizes the message and avoids sounding like the computer that generated it! Minimize campaign costs by automating as much as possible. This last truth is well settled, but ironically has the most counter-intuitive sense to acceptance. It's not necessary (nor advised) to blow your entire budget on a full-blown CRM system (See Destination CRM's May 9th expert's response to "What does the mid-market look for in CRM?") But it is very reasonable to apply the old adage that to make money you have to spend some money. And there are a multitude of reasonably priced automation techniques for the most critical elements of relationship marketing: customer data acquisition and messaging. In fact, no CRM system can flourish without relevant data. The long term operating costs are best minimized by intelligent data gathering and use up front. Smart and incremental steps to automating your customer communication campaigns will, in turn, reduce campaign launch costs. Not only will the investment in the automation offset the cost of developing and implementing traditional campaign methods, it will likely reduce your budget outlay. In fact, it's not unusual to see paybacks for carefully crafted incremental automation within a single campaign. To build and implement programs that produce results and stay within their budget, marketers must seek out the tools and technologies that: a) effectively capture knowledge about current customers; b) make it easy to implement knowledge-based communications that break through the clutter and c) minimize campaign costs while maximizing ROI.
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