Store Locator
Track Order
Close X

New Customer ? Start Here.

SEARCH
MAKE more HAPPEN
MAKE more HAPPEN
 

New day. New Daily Deals. Get them before they are gone!

WEEKLY AD

Connecting with Customers

In a way that connects with your bottom line

It's no new news that we are doing business in a mixed up world. Small businesses are trying to appear big to gain credibility, and big businesses are trying to appear small to gain customer intimacy. With today's customer relationship management (CRM) technology, big businesses are succeeding at capturing what used to be an advantage exclusive to small businesses: personalization.

Personalization strategies

These are strategies that enable businesses to deliver relevant, personalized communications and promotions to customers. They're essential to competing in today's market and tend to result in higher customer retention and revenue.

The foundation of any successful personalization strategy is customer segmentation — creating customer profiles and identifying key trends and commonalities among core customers. Customers are then sorted into segments that reflect their purchasing history and selling opportunities. "Personalized" messages can then be sent to groups of similar customers, allowing you to efficiently and effectively deliver on a mass scale what appear to be individualized messages. Response rates tend to be higher to messages that directly relate to customers' past transactions and needs, rather than broad general messages.

Following are some general guidelines for creating and managing customer profiles that will enable you to implement a successful personalization strategy:

Creating customer profiles

Beyond demographics and products purchased, you need to record other valuable data about your customers such as:

  • Purchase dates
  • Annual purchase frequency
  • Average purchase value
  • Annual value
  • Influencers, e.g., budget, status, quality, etc.
  • Category readiness – e.g., propensity to try new products within category or wait for proven results
  • Opportunities – products or services appropriate to cross–sell, upsell, etc.
Customer profile categories will vary per industry and product line. For example, a jeweler's customer profiles might include data such as:
  • Wedding anniversary
  • Birthday/birthday of spouse
  • Birthstone
  • Products, gems preferred
  • Life stage
  • Purchase frequency

Data you can use

By comparing customer profiles, it is easier to identify customers with high and low profitability potential; and appropriate marketing activities per customer. Consider the following example:

 
Details Customer A Customer B Customer C
Date of last purchase 12/02/01 6/02/01 11/01/01
Annual purchase
frequency
12 6 8
Average purchase value – net $50.00 $60.00 $40.00
Annual HH income $75,000 $90,000 $45,000
Self orientation Maker Achiever Struggler
Family orientation Married, children Single, no children Retired
Category readiness First for new products Slow for new products Avoids new products
Annual value $600.00 $360.00 $320.00

From this comparison of customer profiles, we would mark Customer A as the highest priority since she is most likely to generate immediate revenue. Even though the purchase volume and household income are less than Customer B, Customer A's frequency of purchases is greater and thus represents a greater revenue stream. Customer C represents a customer who is not likely to become a frequent or high–volume purchaser in the near future and thus would be tagged as a low marketing priority.

Tracking the data

In order to manage customer profiles, you must first be able to store and track the data. There are numerous customer relationship management (CRM) database programs designed for small business with prices ranging from the low (one thousand dollar ranges) to several thousands of dollars.

Clearly, the larger your customer base and product lines are, the more sophisticated system you will need. A small construction company may have 25 customers over a 5–year period, and thus could likely manage data with a simple system such as Outlook or Access. A large business with thousands of customers will need a more complex system that does everything but turn the lights out at the end of the day.

To find a system that fits your needs, go to www.buyerzone.com. You can describe your budget and needs in a simple to use form. You'll then receive responses from a handful of vendors that fit your specific profile.

Choosng a CRM system

When shopping around for a CRM system, be sure that it:

  • Easily enables data to be shared throughout your organization so that customer interactions are consistent at all levels – sales, customer service, support, etc.
  • Allows multiple users to update files so that information is always current
  • Integrates easily with existing enterprise systems, such as email, word processing, scheduling, and accounting programs
  • Enables you to schedule and assign follow–up tasks
  • Allows you to send mass emails with personalized salutations
  • Can be easily customized to fit your business processes
Some CRM programs are available on a per user/per month basis; others charge a flat fee or offer a pay–as–you–go method. Shop around and look for referrals. What a sales rep tells you about installation, ease of implementation, and overall functionality is likely to be different than what users tell you.

When debating whether or not customer profiling and segmentation is for you, keep in mind that large companies are spending millions of dollars a year to treat customers like a small business can — using personalized communications, promotions, and service. Because of mass personalization efforts by big brands, customers have grown to expect and even demand it from businesses of all sizes. According to IDC, a worldwide research firm, by 2004 worldwide revenue for data warehousing tools is expected to reach $17 billion and achieve a 26 percent compound growth rate. Don't be left behind. It is not just a good idea to engage in personalized marketing, it is imperative if you want to stay in business. Just find a way to make it work for your business and your budget. And rest assured that there are many options that will enable you to do just that.


About the Author: Jeanette McMurtry is the author of Big Business Marketing for Small Business Budgets (McGraw–Hill 2003) and consults both large and small businesses on how to affordably capture customers' lifetime value. For more information about McMurtry or the book, visit www.mcmurtrygroup.com or email info@mcmurtrygroup.com.


[an error occurred while processing this directive]

Information Tools to Help You Choose

Clearance Center

Clearance

See It Now
Deals! Get them now
SUBMIT
Join us on: