Tuesday, August 15, 2006

An introduction to Customer Relationship Marketing

Fondly called CRM, most often it is mistaken for a software package. Thanks to the huge advertising spends of the software majors, even seasoned marketers think they can buy a CRM package off the shelf and immediately implement it ensuring a manifold growth of their business.

But unfortunately, most of the time these kinds of quick fix solutions don’t work and many discontinue their endeavor to implement a CRM program half way through. Now let us try understand what CRM is.

The starting point of any Relationship Marketing exercise is data. Let me tell you a simple example...

When I say my son’s name is Aniruddha, what does it mean in relationship marketing terms?

1. In my mental database, I have fixed who Anirudhha is
2. I know where he lives, what he likes and what he dislikes. Meaning I have a full demographic and psychographic map of this person
3. I also know his family and friends

Now based on what I know about Anirudhha, I can give him what he wants and please him. And not give him what he doesn’t so that I don’t piss him off.

So database is the starting point of any relationship marketing activity. Beyond this database you need a human intervention to create and nurture a relationship

What is Customer Relationship Marketing?

CRM is the process of actively deepening your knowledge of your customers over time, and then using that knowledge to customize your business to meet customer’s individual needs...
(A definition I learnt during my OgilvyOne days)

The knowledge mentioned in this definition is acquired by building a database of information about the customers.

While a software package would help you compile a database. You need human intervention to compile the data, tell the software what it should do and carry on with it beyond the software to your consumers doorsteps.

This human is not simply a programmer who gives command or writes codes. This is somebody who knows marketing first place, has lots of commonsense, understands what the consumers need and plans the marketing activities accordingly.

To conclude

CRM is a dynamic environment. As the definition suggests you need to keep deepening your knowledge about your customers and then customize your business based on the customers needs and wants.

The CRM software packages are like the files you use in your office. The files would help you arrange your papers properly and store it safely. But the conduct of your business depends on how intelligently you make use those papers filed.

Quite often than not the files get old and you need a replacement.


CRM is driven by data, but it is only the starting point.
The software you use don’t create relationships by itself

More about CRM in my subsequent posts…

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