IMV6 : Customer Relationship Management

The following is a transcript for IMV6 : Customer Relationship Management. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast brought to you by MindComet. And now, here’s your host, Ted Murphy.

Ted Murphy:

Welcome to Internet Marketing Voodoo Episode Six. I’m your host, Ted Murphy, and with me today is Ginger Conlon, Editor-in-Chief for 1to1 Media, publishers of 1to1 Magazine. Welcome to the show today, Ginger.

Ginger Conlon:

Thank you.

Ted Murphy:

We’re here to talk today about customer relationship management, obviously something near and dear to your heart at 1to1 Magazine. I want to kind of just jump into some questions that people seem to have about CRM and how to utilize it and get your expert opinion on these different topics.

Ginger Conlon:

Okay, great.

Ted Murphy:

Ginger, what kind of data should you be looking to collect when you’re working on a CRM system? What information is valuable about the customer?

Ginger Conlon:

I would have to start by saying it depends because you have to take a look at what is most relevant for your business. What do you need to know about your consumer or your customer? Is it their demographic information? Is it something about their life stage? Is it something event driven, for example, something like a birthday or when a policy is going to come do or things like that. So, I know one company that collects 40 key data points, and they do everything they can to collect all of that information and then, depending on what type of mailing they’re doing, they pull from those 40 pieces of information. For example, the role of the person in the organization, their geography, things like that.

Ted Murphy:

How many pieces of data do you see an average company – what are they collecting?

Ginger Conlon:

Well, it really depends on what business they’re in. I guess the thing would be, don’t be afraid to start small because you can do a lot by just having a little bit of information, so you can put down, you know, what is your goal of how much information you want and then work to gather it over time. So Pantone, for example, recently did a very successful multi-channel marketing campaign. All the information they had was the person’s name, whether they were a designer or photographer and then their address, whether it be the email address or the mailing address, and so just those three points of basic information they were able to really get some great results.

Ted Murphy:

You’re just talking about some basic segmentation there, whether they’re a designer or a photographer, and just from that information, they’re able to target those people and communicate to them just a little more effectively.

Ginger Conlon:

Exactly. So if you want to jump into having a customer strategy, and you only have a little bit of information, it’s okay. That’s all you need to get started.

Ted Murphy:

Great. So in terms of information – and you know, you talk about starting small – obviously, the goal of a lot of organizations is to get more information because the more information you get, the better you can know that customer. Is there particular information that you see that people are hesitant about giving away?

Ginger Conlon:

Some personal information, and most often, financial information are probably the two pieces that are most difficult.

Ted Murphy:

And is there a way of getting around that in terms of, like, privacy? Obviously, there are financial sites out there like a LendingTree.com. How do those guys get around collecting that information and making people feel a little bit more comfortable about their privacy?

Ginger Conlon:

First of all, you want to have a privacy policy that’s posted on your site that’s reader friendly, a little less legalese, a little bit more straightforward. Make it obvious. Don’t put the link to the privacy policy down in the teeniest, tiniest fine print. Make it clear that you have a privacy policy and that you do respect your customers’ privacy.

And then, also, you have to show what the reward is. And so, for Lending Tree, the reward is kind of obvious: If you give us your information, then all these banks are going to want to vie for your business. So when you’re asking for customer information, what is the benefit of them giving that information to you? So are you going to serve them in a more relevant way? If I’m an airline and I tell you that I live in a certain destination, are then you going to give me information relevant to that destination more often? So what’s in it for me for the customer for giving their information.

And then, also, over time – you don’t have to ask for it all at once. Ask for a little bit of information over time as you build that trusted relationship. If you get information and then you use that information to better serve the customer, they’re more likely to want to give you more information in the future because they’ve seen that you’ve done a good job of using what they’ve given you in the past.

Ted Murphy:

And so you mentioned a little bit about that with the experience that Pantone just had. I mean, how can you use the information that you’ve then successfully collected to personalize the brand experience and the marketing message?

Ginger Conlon:

So what they did was they communicated to their photographers and designers. They customized the material to each person, so as basic as putting their name on it. The messaging was specific to their role. And then what they did to gather more information was when – they were driving people back to their Web site about a new product, so when you got to the Web site, there was a three question survey, and if you filled out the three question survey, you had an opportunity to win a whole stack of all the Pantone books, which are pretty expensive if you go and buy them.

Ted Murphy:

Yeah, so it was tied into, like, a promotion for these.

Ginger Conlon:

Right, and it was just three basic questions to learn a little bit more about those people who responded, and I think they had about a 30 percent or so response rate to the survey, which was pretty good. They had a much higher response rate overall to the people clicking to their Web site, but 30 percent response is a pretty good number.

Ted Murphy:

Absolutely. So does the personalization actually deliver better ROI? I mean, we get questions all the time; it’s like oh my gosh, we can do this, but we’ve gotta set up all these data fields, and we’ve gotta determine a strategy, and then we’ve gotta figure out how to use that in the marketing mix. From the people that you’re seeing and through your experience with 1to1 Magazine, is the ROI really there?

Ginger Conlon:

It really is. There was a survey done recently, like in the past six months, that showed how the ROI increased based on how much relevant information there was in each mailing, and so, if you just add someone’s name, the return is higher. And then if you add someone’s name and something else that’s relevant, the return is higher again and higher again.

And one example of how this works in action is Radisson Seven Seas Cruises. They had time in their cruising that was a little slower than the rest of the year, so they wanted to have more people booked during that time, so they sent out this mailing, and they customized it in certain ways. For example, it was a direct mail piece because that was most appropriate for their audience, and they had it signed by the president of the company, and they had a picture of the ship that the person had last cruised on, and they had the person’s name, and they said, “Because we know you went to this destination, you might also like to go to this other destination.” So they had the photographs that were relevant, the copy was relevant, the name was customized, it had the personal touch of the president’s signature, and it was so successful that they had a 40 percent lift in cruising during that time that their goal was for.

Ted Murphy:

Wow.

Ginger Conlon:

And this was without any special offers. This was just by being relevant to the audience.

Ted Murphy:

That’s amazing. That’s a great example of that. I think it really does prove the ROI question. I mean, we’re talking about personalization here and what we do with that information and what information we should collect, but I think that a lot of people experience frustration in actually collecting that data once it’s actually set up.

We have an email that we received here, and I encourage everybody else to email me at ted.voodoo@mindcomet.com if you have any questions you’d like us to answer on the show, but Tim Hocken from Los Angeles asked, “Ted, I’ve got a quick question for you. We spent millions on a CRM system for my company, but I can’t get my sales team to input data into it. Is there anyway to get my sales team to actually put data about prospects and clients into the CRM?” We hear this all the time. Do you have any words of wisdom there?

Ginger Conlon:

Yeah, that is one of the toughest issues that just doesn’t seem to go away even after all this. Well, there are a few suggestions. Barton Goldenberg, who’s a well-known CRM guru has something he calls the three-x factor. He says for every piece of information you want sales people to put into the system, you need to show them three points of value they can get back out. So, for example, perhaps because they’re putting information in, they get access to, say, billing information or customer service information that they might not have had otherwise because then when they go to their customer, they know in advance whether there’s been any service issues, whether the customer’s paying on time, so the more information they can be armed with. That’s one example.

There might be some kind of simple reward structure that people putting information in the system –

Ted Murphy:

Yeah, I know that we’ve done some, like, point-based systems before where people can redeem them for prizes and things like that.

Ginger Conlon:

Or it might be that the system is connected to their compensation system. So by putting in information –

Ted Murphy:

Whoa, now you’re gonna scare people. (Laughter)

Ginger Conlon:

They can track what they might be able to earn by putting their sales opportunities in the system, then that might motivate them to do it.

Ted Murphy:

Absolutely.

Ginger Conlon:

And then, of course, there’s the stick, which isn’t always the best option, but there are companies who have said, “If you don’t put your contacts and your opportunities in the system, as far as we’re concerned, they don’t exist, so you’re not getting paid your commission.” Now, that’s not ideal, but there are companies that have done that, and actually Hewlett Packard’s new CEO used that tactic recently, not on his sales team, but on his executive team, his direct reports. He said, “If your teams aren’t putting information in the system, then I don’t consider it real.” So if you guys want your bonuses, then you better make sure to find a way to get your people to put their stuff in the system.

So there are all different ways. Really, the carrots, the rewards and the, “Hey, here’s what you can do with the information,” those are the better ways to go.

Ted Murphy:

Yeah, I agree with you there.

In your experience, what are you seeing in terms of who’s owning a CRM system? You know, we see a lot of confusion between: Is this an IT thing? Is this a marketing thing? Is this a sales thing? Is this a customer support thing? Who owns it? And who ultimately should control the CRM system?

Ginger Conlon:

Who owns it is probably – within each organization, it’s probably who brought it in, so it varies across the board. I would say that you want a key owner who has the best visibility into all of the constituents who are going to be using it. Often, that winds up being someone in marketing because they’re working so closely with sales and with service and with IT. It really should be someone in line of business. It really shouldn’t be IT, but IT should be involved. Think of it this way. You’ve got your one key owner on top who’s the champion of the CRM initiative, and then you’ve got a cross functional team who works to communicate their departments needs up to their person, work on joint decisions and then bring the information back out to their team. So there should be a cross functional team with marketing, sales, service, IT, whoever is going to be affected by the system or whoever is going to be using the system reporting up to that one key person.

Ted Murphy:

So ultimately, you have that one key person who’s – we’ll call him the owner, but really everybody has a part of the system and should be actively contributing and benefiting from the system.

Ginger Conlon:

Absolutely.

Ted Murphy:

So what are the essential components that you see of a CRM system? What – from your experience with larger companies and smaller companies, what are some things that remain constant and standard and are things that people should consider when implementing a CRM system?

Ginger Conlon:

What’s most important here is that you match your business goals. So, what are the pain points? What are the things that you need to address that a customer relationship management system can help with? And it should be something that, even if you start by right now we need help in sales or right now we need help in service or what have you, the long-term goal should be creating something that’s enterprise wide. Like, we were just talking about how you want to break down the silos and get all these departments working together and having a CRM system where you can create a universal view of the customer will help that.

Ted Murphy:

Absolutely.

Ginger Conlon:

Even if you just start with one piece at a time.

Ted Murphy:

So, if there were some critical factors that you needed to know before implementing a CRM strategy within a business operation, what do you think that those would be?

Ginger Conlon:

Okay, well, again, you have to start with: What are your business goals? Why do you want to do it in the first place? Okay, it’s nice to have all your contact information in one place, but really, what’s the ultimate goal of doing that? So you have to have those goals in place. Some part of those goals need to be measurable, so you have to have agreed-upon metrics in advance.

Ted Murphy:

What are some things you might measure?

Ginger Conlon:

Lead conversion rate might be one and being able to track that more closely, being able to, on the marketing side, have more real time information so if you see that a marketing campaign isn’t having the results you’re expecting, you can change it midcourse instead of having to wait until it’s done. The same thing with sales leads and opportunities. One metric might be to be able to track and change things in the pipeline. If you see that you’re not meeting your goals in the pipeline as you expected, you can go back and make adjustments instead of waiting until the end of the quarter. You can actually take action before or during.

So again, the metrics play back to: What are your business goals? What are your goals for using CRM, and then you have to get everyone to agree on those goals because, hypothetically, IT might be focused on getting the system implemented in three months, but marketing might be focused on, “Well, that’s not as important to me as making sure this thing works where we can get these kind of results, so you have to kinda agree upon what are the goals and then agree on the metrics.

Then you also want to know, well, what do customers expect, and you have to be careful with that because you don’t want to do something just based on what customers expect. Obviously you want to take that into consideration, but it also needs to match what your capabilities are. I mean, if customers want 24/7 service, is that in your budget to provide it? Or how can you make that in your budget? If you can’t afford to have live agents 24/7, then how can you offer self-service to fill the gap? So you have to kinda look at what are your goals, what are your customers’ expectations and how can you mesh those using CRM.

And another important thing is: Is your company ready to make the process and cultural changes that a CRM system and strategy can bring in? Because just turning on the switch isn’t going to make it work. Again, like the question you had before with how can you get sales people to put information into the system, you have to plan for things like that, so you have to plan for the training’s that involved and getting people excited about using the system, showing them the benefits, having quick wins, show how – when you’re doing your planning – how can we pilot something, so we’re gonna show a quick win, and then we can take those successful results out to everyone else and get them excited about using it. The process changes: If you make a change on the sales side, is it going to affect something else in your business?

Ted Murphy:

Yeah, is it gonna take time out of their day? Because now they’re logging all their calls and putting in information, and now they can’t do as many phone calls in a day.

Ginger Conlon:

Right. And hopefully you’ve designed the system so that it’s not taking too much time out of their day, that it’s actually simplifying the process that they would have done otherwise. But also, does it affect other departments? One Gartner analyst gives a great hypothetical example of an insurance company who gives their field people handhelds. So instead of being able to process claims on car accidents only one car a day, they can now do two cars a day, but in the backend, the claims adjusters can still only process one car a day, so everyday, the backlog gets twice as big and twice as big and twice as big. So the important thing is: Okay, if you’re improving a process on the front-end, how is that affecting somewhere else in the company? And are you prepared to keep up with that as well?

Ted Murphy:

Absolutely. Well, I appreciate your time today, Ginger. This has been very enlightening. I ask everybody to visit the Web site and download the ‘Top Ten Things to Know About CRM’ from Internet Marketing Voodoo, and also, if you don’t already have a subscription, to check out 1to1 Magazine. And what is that URL again?

Ginger Conlon:

It’s 1to1.com, so the numeral 1, the word to, t-o, and the numeral 1, dot-com.

Ted Murphy:

Absolutely. And everybody check that out. It’s a great Web site and a great magazine. We also have a new phone line for call-ins. We’re gonna be taking messages off this line and putting them on the show. That number is 1-866-206-4461.

Ginger, I appreciate everything you’ve said today. Thank you very much for joining us on the show, and hopefully, we can have you again in the future.

Ginger Conlon:

Great, thank you.

Ted Murphy:

Alright, have a great day.

Announcer:

For more information on this week’s topic, visit internetmarketingvoodoo.com. This podcast has been brought to you by MindComet, the Relationship Agency.


[End of Audio]

Marketing Resources
Download Top Ten Things to Know About Customer Relationship Management (PDF - 680.6KB)

Listen to the Customer Relationship Management podcast.

Contact MindComet about creating personalized branding experiences for your customers.

Technorati Tags
CRM, customer experience, customer relationship, customer management