Where to Spend and Where to Save

To learn when to spend and when to save, you have to start with the discovery of what is important to each customer. Once you have this knowledge, you can then adjust your investments to spend only in the media relevant to your target customer—what she reads, watches, and listens to. Beyond that, it becomes a matter of targeting the right customers and limiting your offers, whether they be by mass media, direct mail, e-mail, or telemarketing, to those customers you know will be interested.

You can also tailor your level of service to reflect the individual needs of each customer (as discussed in Chapter 14). Scaling back or eliminating wasted efforts will produce substantial savings—more than enough to support your CMR customization.


The proactive side starts with media investments. The move to CMR doesn’t mean abandoning mass media, but rather letting the most valuable customers guide you to their preferred sources of information. Customers will tell you how and where they want to get their information if you take the time to ask them.

Package goods manufacturers are getting better and better about making use of trading area data for defining shoppers by store and interacting with retailers for use of their customer knowledge. It’s a good start to measure market share by geographical subsets and regions, but a bigger opportunity exists in sorting stores and advertising investments by consumer preferences. This improved media targeting will not only save marketing dollars that can be used for CMR, it will also add value for the brand managers who care about loyalty, the sales managers who care about cases by chain, and the media service people who have traditionally cared only about eighteen– to fifty-four–year-old women.

Target Marketing

Unless under exceptional circumstances, customers will only accept products that fit their needs and their lifestyles, so the process of communicating means truly knowing your customer. The biggest wins come when you know enough about your customers to offer products that will be received willingly. You will not only have a reason for the offering, but you can also explain the reason in your communication. You can convince customers that you are offering personalized solutions as part of the product or service.

Yet marketers continue to saturate the mass media trying to offer a broad selection of products to everyone. One Sunday my local newspaper included twenty-seven free standing inserts from retailers and ninety-eight free standing inserts or pages from manufacturers. Less than two percent of all these advertisers were of any interest to me.

I’m told that struggling Kmart distributes 75 million inserts every week of the year. It’s possible that more than a third of those are reaching homes with little or no interest in the chain. If Kmart were to sharpen their customer and prospect targeting by eliminating just a few million of the wasted distribution they would save more than enough to fund a formidable CMR initiative to retain their most valuable customers, so desperately needed for their survival.

Why CRM Doesn't Work(c) How to Win by Letting Customers Manage the Relationship
Why CRM Doesnt Work: How to Win By Letting Customers Manage the Relationship
ISBN: 1576601323
EAN: 2147483647
Year: 2003
Pages: 141

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