By John Freeland
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Help Attracting and retaining the most valuable customers
requires companies to aggressively market products and services to increase the
economic value of both their brand and customer relationships. In addition,
companies must sustain bottom-line performance in the face of skyrocketing
marketing costs.
To realize these goals, companies must continue their
efforts to maximize their investments in the sales and service technologies
that help reach, understand and interact intelligently with customers.
Traditionally, marketing within customer relationship
solutions has been characterized by operational marketing, otherwise known as
customer management. While operational marketing has contributed to improved
customer service, it has neither reversed the declining return-on-marketing
investments nor reduced the message clutter and fragmentation that threatens
customer loyalty.
Moving forward it is imperative that creative and analytical
marketing disciplines are brought into the fold along with operational
marketing. To most effectively do so, leaders must understand the value of each
of these distinct marketing disciplines, as well as their components (see
Figure 1).
Figure 1 
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Analytical Marketing: Interpreting and Acting upon
Customer Data Analytical marketing uses processes and sophisticated
technologies that allow businesses to direct their overall marketing
investments across their brands and customers. In a sense, analytical marketing
tools are the nuts and bolts of marketing. Without them, the marketing effort
flounders.
Specifically, analytical marketing converts customer data,
gathered at various touch points, into relevant insights that direct market
segmentation activities and feed into more effective campaign design. Through
predictive modeling, analytics lead to a more robust understanding of customers
and markets and an improved ability to make strategic and operational decisions
about customer treatment. The ultimate outcome is increased profitability,
based on customer differentiation, and more informed decisions related to the
development of product, pricing, promotion, packaging and channels.
Analytical marketing also allows companies to test the
effectiveness of various customer relationship management (CRM) efforts.
Without analytics, executives will keep investing in CRM without ever knowing
where their money is having the greatest impact. In short, analytical marketing
puts customer insights to work for the organization and prevents the company
from delivering the wrong content to the wrong person at the wrong time.
Questions analytical marketing capabilities can answer:
- Which of our consumer segments are most likely to drive our
future growth?
- To grow our revenue by 10 percent, which marketing levers
should we emphasize?
- How can we best allocate our CRM investment dollars, and what
is the expected return?
- What insights do we need to understand before delivering our
customer promise?
Creative Marketing: Reaching Customers with a
Consistent, Total Experience As the number of customer channels has exploded, so has the
need for creative marketing, which involves all the activities associated with
building and sustaining a compelling brand and ensuring that customer
interactions reflect a satisfying brand experience.
In the past, creative marketing efforts have been applied to
CRM efforts in much the same way as technology. That is, in the rush to meet
perceived demand, creative marketing campaigns were slapped onto the larger CRM
initiatives in a haphazard and fragmented way. It has been far too easy for
companies to develop a host of messages—from ad campaigns to customer service
representative scripts—that are unintentionally inconsistent and thus
frustrating to customers.
Fortunately, companies are changing the way they approach
creative marketing. By integrating its processes with those of analytical and
operational marketing, and by focusing on the total customer experience,
creative marketing can now be used to build a unified brand across all of a
company's online and offline channels.
Questions creative marketing capabilities can answer:
- What is our desired brand position?
- How should we strategically position our brand?
- How can we promote a seamless “face” to our customers?
- How should we reallocate our marketing investments to
significantly increase revenue and profit growth?
Operational Marketing: Interacting Knowledgeably
with Customers When people think about a marketing investment to improve
CRM capabilities, they are usually referring to operational marketing.
Operational marketing encompasses all the activities that relate to creating a
positive customer interaction.
Customer insights play a large role in operational
marketing, as do data mining and data warehousing, which continuously harvest
customer information from a variety of contact points. Leveraged by creative
and analytical marketing capabilities, this information is assessed and
converted into meaningful insights that drive ongoing, personalized marketing
efforts when a customer is visiting the company's website or contacting the
call center.
The goal of operational marketing is to enable ongoing
“conversations” with individual customers across all channels. But these
conversations will become an ongoing dialogue only if you know and understand
your customer segments (which analytical marketing addresses) and are telling
your customers what they want to hear (which creative marketing addresses).
Questions operational marketing capabilities can answer:
- How can we improve customer service and use it to grow our
business?
- What insights can be used to better personalize our customer
interactions?
- How should we differentiate our sales and services across
customer segments?
- How can we enable cross selling and “up-selling” to an item
of higher value?
The Combined Power of Marketing
Disciplines When the analytical, creative and operational marketing
disciplines work in tandem with a company's existing sales and service
capabilities, the entire CRM effort becomes revitalized. Information becomes
dynamic. Insights become powerful barometers of customer likes and dislikes.
Comprehensive marketing campaigns become targeted and compelling. The result is
a customer base that is pleased with unique and personalized interactions.
Customer loyalty rises, as does brand value and, ultimately, revenue.
This Outlook Point of View is based on the keynote
paper written by John Freeland for Defying the Limits: Setting a Course
for CRM Success, ©2001 Montgomery Research,Inc. For more information
or to order copies of Defying the Limits, visit
www.crmproject.com.
John Freeland, global managing partner—Customer Relationship Management, is
based in New York City.
For more information, please
contact us.
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