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CRM: Everyone's Doing It

  |  August 17, 2005   |  Comments

CRM is no longer a specialized skill set for the direct response elite.

CRM (define) has historically been house under the auspices of direct response or "relationship marketing" agencies. As the mass-media landscape continues to splinter and become more bidirectional, CRM will no longer be a specialized skill set reserved for the direct response elite. Instead, it's a tool for marketers and agencies alike.

CRM typically includes a host of elements, including customer service, call-center infrastructure, sales force automation, marketing automation and analytics, order management, Web self-service, field service, online sales, and price management.

As companies become more intensely focused on return on investment (ROI) and profitability, many CRM elements are being studied to identify improvements that can be made across the enterprise. According to KowledgeStorm, an online lead-generation company for the technology industry, CRM spending is the fifth most important IT spending priority for companies surveyed, behind data security, project management, business intelligence, and cost cutting.

What does a well-oiled CRM machine allow marketers to do?

CIO Insight polled over 200 IT executives about CRM applications' potential benefits. It found the top eight benefits (in order) were increase customer satisfaction; provide a single, 360-degree customer view; increase revenue or profit per customer; automate sales processes; improve sales forecast quality; analyze marketing campaign effectiveness; increase cross-selling; and add new customers.

Not surprisingly, CRM budgets are expected to increase rather dramatically over the next 12 to 18 months. According to AMR Research, the average global company increase for customer relationship management budgets in 2005 was 2.3 percent; it's forecast at 8.2 percent in 2006. Small and midsize businesses (fewer than 5,000 employees) will exhibit the greatest growth. They've been slower to the game and have a smaller base to grow from.

What does this have to do with digital marketing and its relevance to your business? Though it hasn't been spelled out, implicit in all successful CRM applications is reliable, plentiful data. Sophisticated Internet marketers have harvested this type of data for years and triangulated it with call-center activity, email activity, in-store activity, and so forth. There's been a significant hole in the data when we look at more traditional marketing and media expenditures, such as TV, radio, and magazines. With these, we've been forced to use sophisticated models instead of actual data. That's changing fast.

Nowhere is this change more apparent than in television. Powerful set-top boxes and DVRs provide interactive computing capabilities. Many of these activities were once reserved for the Internet, such as transactional commerce, inventory management, real-time search, and Web browsing. Now, they're offered by cable and satellite providers.

Whether you use a set-top box or a media-center PC, companies such as Intel and Microsoft are architecting a world where the 10-foot experience becomes nearly synonymous with the three-foot (computer) one, and the remote control is the new mouse. With all this interactivity comes terabytes of data generated on a daily basis. This can feed the CRM engine to maximize marketing ROI and profitability.

Radio is even getting into the CRM game with a few new products scheduled to hit the shelves this holiday season. Satellite radio receivers will have built-in hard drives and powerful computing chips that will allow DVR-like functionality, as well as one-click ordering of products and services. The Web is the feedback loop when a consumer places a device in the "sync cradle." One can only imagine the amount of data we can capture as it relates to media consumption and consumer behavior. Again, this can be fed into the insatiable CRM engine.

The Internet's monopoly on analytics is ending. I'm not sure we're collectively ready for it. This data-rich media landscape will be a key piece of the CRM puzzle in the future and will validate all the attention spent on CRM today.

It's trendy, it's hip, it's CRM. Everybody's doing it. Are you?

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ABOUT THE AUTHOR

David Cohen Before joining Universal McCann Interactive, David Cohen was North America media director at Zentropy Partners. At UM Interactive, he plays a pivotal role in integrating interactive media into clients' overall marketing and media plans. David oversees all interactive media strategy, including planning, buying and analysis operations in the New York office. Current client responsibilities include: Wendy's International, Johnson & Johnson, Sony Electronics, Marriott International and Bacardi. David is active in many industry organizations and speaks frequently at seminars and lectures for the Advertising Club of New York and the American Association of Advertising Agencies (4A's).

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