By understanding customer relevancy—what really matters to customers—companies can develop programs for mass marketing programs that are more productive while, at the same time, reserving the funding required for CMR.
It’s not just mass media investments that suggest waste that could be reapplied for CMR projects. Seklemian/Newell studies have shown that most firms, even those who profess to be practicing CRM, are over-mailing and are spending significant telemarketing dollars to contact the wrong customers. Profitable proactive marketing requires understanding the desired customer experience and putting the customer in control.
There is waste on the reactive side of the communication equation as well. As a company adapts to customers’ needs and requirements, it reduces costs while enabling customers to get better, easier access to the information and services they care most about. AT&T, planning to spend $2.6 billion, and Nextel, planning to spend $1.2 billion to bolster customer service, may not understand this.
In late 2002, after extensive customer research, Saks Department Stores learned that customers do not require the same levels of service in all departments. As a result, they maintained one-on-one personalized service in the cosmetics, shoes, men’s tailored clothing, intimate apparel, fine china, and furniture areas of all stores. They also maintained this high level of service in the women’s better sportswear and men’s better sportswear areas of selected stores where they know customers expect it. These departments have transitioned to a more CMR type of service. The remaining departments of the stores offer fast, friendly, and efficient service at centralized service centers. Customer response to this new bifurcated service strategy has been very positive.
Companies trying to provide best customer service to all of their customers are misspending on these initiatives. Empowering the customer to manage the relationship allows him to decide the level of service he wants from your firm. Companies exploring this opportunity are finding they can save enough by eliminating wasted investments to finance all of their CMR activities.