Friday, 3 June 2011

CRM is dead... long live PRM!

Customer Relationship Management (CRM) is a term which has long been used in sales and marketing circles to describe a methodology for acquiring, retaining and deepening customer relationships through targeted, personalised communications.

Or to put it more eloquently, Wikipedia defines CRM as:

“... a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes.”

Wikipedia also highlights that the overall goal of CRM activities is fourfold:
Firstly; to locate, attract and secure new clients
Secondly; to cultivate and retain existing clients
Thirdly; to bring former clients back to the business, and...
Fourthly; to reduce marketing and client servicing costs.

Where this definition differs from our own is that it focuses on the use of technology to achieve the end goals. Whilst we don’t necessarily disagree with this, at EWA we prefer to focus on the overall ‘CRM ethos’ i.e. how can we help our clients to get closer to their customers through the use of CRM led techniques and appropriate technology rather than thinking of CRM technology as being the panacea to all customer communication challenges. Customer Relationship Management technology is only ever as good as the people who use it and the data that goes in.

A conversation along these lines with a client recently sparked a new idea (and I must say it was hers not mine, so well done Talia at Wilshire Farm Foods!), shouldn’t we be thinking about Personal Relationship Management (PRM) and not just an all encompassing approach to customer management?

The Holy Grail for marketers has always been to properly, completely understand what makes customers tick and then use this information to talk to them about (and ultimately sell) products which are of interest. The practice of CRM goes some way to achieving this, but ‘traditional’ methods can still lump people together into segments which share broadly similar characteristics. Marketers will then often fall foul of sending communications via the channel that best suits them (or is the cheapest) and not necessarily the one which their customers prefer.

So what we’d like to advocate is a shift in mindset to a PRM approach – essentially each and every customer communication should adhere to the 3 Relevances:
  • Relevance of channel
  • Relevance of message
  • Relevance of timing
If a communication can be sent at the right time, talking about things of interest via the right means it will ultimately improve customer relationships and remove the annoyance factor of untargeted, irrelevant marketing, something which is often underestimated in terms of negative brand impact.

And the technology to achieve this already in place, the integration of CRM systems and email marketing together with customer insight have brought customer communications on in leaps and bounds - Amazon is a fantastic example of this and how to use customer data to achieve highly personalised marketing. We’ve all spent more than we intended on Amazon as a result of their very sophisticated cross sell and up sell messaging (or is that just me?!)

So there you have it, it’s all about Personal Relationship Management and truly treating customers as individuals. We’d be interested to hear your thoughts on this: is it just a utopian dream or can technology coupled with the right approach deliver the returns we’re all after?

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