Creating ties that bind with customers – DIRECT Magazine

We’ve all heard the stories – Company X fails to listen to the social media storm around it and suffers irreparable damage to its brand perception. If only Company X had stronger relationships with its customers or was more connected with them through social media, this damage could have been prevented.

These are the types of stories that give marketers, senior management and CEOs nightmares. However, these situations also present an opportunity for direct marketers to take an influential seat at the executive table.

A recent study of 1,500 CEOs conducted by IBM found a group of organisations that were achieving standout performances by navigating and converting this increasing complexity into opportunity. Three common areas of focus proved to be: creative leadership, operational dexterity and reinventing customer relationships. I would like to specifically discuss reinventing customer relationships as it relates to direct marketing and CRM.

What you know and what you don’t

For years, marketers have evolved methodology and practice to take advantage of the latest thinking, ideas, and technology. From humble beginnings using broad, untargeted campaigns, right through to eDMs and now social media, the evolution of direct marketing has been one of embracing change and innovation.

The rise of social media has diminished customer attention and changed how they interact. Customers are less loyal to their brands and their habits are increasingly unpredictable. Reputations can be built and burned online by opinions text’d and tweet’d by friends, bloggers and advocacy groups.

Additionally, product, price and service not only drives customer experience now, but also the availability and suitability of communication channels. The ability to offer seamless digital and multichannel communication is key to facilitating a positive customer experience. Then differentiate your product and service from the start of the customer journey.

Two initiatives are critical to enabling marketers to achieve this intimacy; turning data into insight and delivering an exceptional customer experience.

According to the 2010 IBM CEO Study, a staggering number of executives described their organisations as data rich, but insight poor. Many voiced frustration at not being able to transform available data into feasible action plans, let alone detect emerging opportunities.

Bring in the experts

Outsourcing CRM and analytics processes allows companies to gain significant productivity and efficiency gains by leveraging the plethora of information, demographic data, insight, trends and preferences of their customers. Having this information at the fingertips of the marketing team can be a veritable gold mine to those who know how to interpret and gain insight from it.

Rather than looking at tail lights of data, savvy direct marketers learn to use business analytics derived from outsourced CRM processes as headlights to turn ever increasing streams of customer and demographic information into business insight.

Recently IBM assisted a leading Asia-Pacific based bank to do just this when it helped develop a strong understanding of key marketing segments. It devised a campaign to grow its new small and medium enterprise business line. This involved a complete psychographic analysis of market segments along with a comparison of each segment’s relationship between the customer and the bank.

Armed with these customer insights, ten DM campaigns targeted 140,000 customers. This drew a response from 8,000 customers, a conversion rate of six per cent with the potential to generate revenue to the tune of $4million.

The practice of shifting jobs overseas has given some negative connotations to outsourcing. However many IBM Australian customers’ outsourced CRM and analytics processes are delivered by onshore facilities.

The key to successfully outsourcing your CRM processes is finding a partner that shares your goals and understands your business objectives. This allows organisations to provide leadership and strategic decisions grounded in sophisticated analyses to help them succeed and excel in these new economic times.

Peter Monk is the partner responsible for IBM’s CRM and Contact Centre Managed Business Process Services to clients across growth markets. A particular focus during his work is the implementation of multichannel and customer analytic programs.