Marketing 'best through CRM'
New research has found that customer relationship management (CRM) is the most effective marketing activity in terms of return on investment (ROI).
A survey by the Chartered Institute of Marketing found that 25 per cent of marketers think the best ROI is delivered by CRM activities, particularly among those working in financial services and other services firms.
Advertising was found to be the worst for ROI with nearly a quarter (23 per cent) of marketers rating it lowest.
According to Darren Mercieca, a Business Link adviser, CRM is an increasingly popular way for businesses to maintain effective commercial contact with their clients.
"CRM gives a business a lot of insight into what they have done with customers in the past, for example their buying patterns, and this may provide scope to do more in the future," he said.
He added that organisations are currently feeling a lot of pressure in terms of turnover and could be looking for new customers when in fact, with an effective CRM process and management skills in place they could grow the business with their existing customers.
Last week (August 3rd) business internet service provider Star launched a pay-as-you-go CRM service aimed at getting businesses started in customer relationship management at a low cost.
Do you spend enough time on your existing customers? What strategies have you found effective?
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Comments
This is so true, many companies ignore the 'acquisition' costs of chasing new customers and miss the opportunity to build stronger, more profitable relationships with the customers they have. Existing customers, if looked after well, cost less to 'service' - they are more forgiving, easier to sell to and will often recommend you to other potential customers. There is real bottom line value in nurturing customer loyalty that is often not measured.
Does anyone have any good examples of measuring the value of customer loyalty?
Yeah I do agree with this to a fair extent and I think it as Margaret points out it's due to the costs involved in chasing new business, from the time spent developing new ideas through to design and production of advertising, it is an expensive route.
However, we're seeing a huge growth in marketing automation tools available at the moment, especially where digital marketing is concerned (I mean, I run a business that does just that), marketing/advertising via Internet, Email, New Media and Social Media is becoming increasingly easy and cheap, and they can even draw from your CRM and be used to communicate with current clients as well as targeting new business.
I'd also be inclined to think that the survey carried out above was with mainly established businesses who of course have a solid customer base, your CRM will help very little if it's empty ;-) you still have to make investments in advertising to grow your customer base in the first place.
I also feel the ROI on CRM at this time in the economic climate is even more valuable as many businesses marketing focus likely isn't on expansion and growth but survival, it's about keeping the business you've worked hard to earn, looking after your customers is the best way to do that I suspect.
Rob
There are some well bandied stats around about the cost of selling to an existing client as opposed to finding a new one - about 8 to 10 times cheaper depending on who you listen to. It is easier because they already know you and trust you (enough to have made a purchase) so provided you haven't totally upset them with your quality or service it must be easier to go back to them!
Despite this, many firms are poor at looking after and nurturing existing clients. I did some work with a client who worked with directors of top companies. Surprisingly they had no formal contact strategy in place and they were poor at making any form of contact once the initial work finished.
Contacting a selection of these people on their behalf (part of an exercise on client contact stratgey) even I was surprised at how easy I got to speak to these top directors using my clients name. Only one firm blocked the contact at the gatehouse and all the other gatekeepers were happy to let me through.
Without exception they all took the call - or I was allowed to call back at a more convenient time - were happy to chat about their experience of the company and how things were going now and when would be a good time to be back in touch for further business and how they would feel about receiving newsletters. Out of a relatively small sample of their clients I was able to generate a few leads for them there and then as well as some longer term contact periods.
This demomnstrated to them the importance of keeping in touch with your existing clients and the need for a proper CRM system.