Good CRM may mean letting some clients go: expert

NEW YORK — Customer relationship management software puts the onus on the word “”customer,”” but it helped one of Canada’s largest Crown corporations significantly reduce its administrative burden.

Management consulting firm Peppers &

Rogers Group helped one client, Canada Post, integrate 80 legacy data systems using the technology. The key is that a company must do more than pay lip service to using these potent tools, said Peppers & Rogers partner Martha Rogers, who spoke Thursday at DCI’s CRM Conference & Exposition.

“”An investment in CRM software and technology isn’t the same as becoming a customer-centric enterprise,”” she said.

In some cases moving to customer-centric marketing will lead to redeployment of resources from customers that aren’t making the company money. The idea is that quantitative and qualitative tools are now sophisticated enough to identify these lower-valued clients. In some cases, they should be jettisoned in “”a caring and loving way,”” Rogers said.

The remaining customers should be carefully nurtured. “”Getting messages out is not as important as getting messages back,”” she said. CRM, when deployed wisely, can support the goal of personalizing the treatment of the high-value customers. Indeed, a well-designed system can help predict which customers have the potential to create more revenue, possibly moving from a revenue-neutral to a more highly valued status and providing important clues as to how to achieve that goal.

The ways in which this can manifest itself are varied. Rogers cited examples of doctors that had enough information to automatically call in prescriptions to a pharmacy, check for drug conflicts with all other medicines being prescribed by that company and others and even having the drugs delivered. The point is that once the technology and will is in place the only limit to the way in which customers can be helped is the company’s imagination.

Overall this is a difficult task, however. Today, many companies only use rudimentary “”proxy”” measures. For instance, an airline can easily measure how many frequent flyer miles a customer has with them; the truly useful statistic is the one that shows the potential for revenue growth is how many frequent flyer miles a customers has on all the airlines he uses.

The big picture is that companies must begin treating their customer base more proactively. “”The customer base is an asset for a business that can be valued just like any other financial asset,”” Rogers said.

The ramifications of evolving into such individualized marketing are significant. Most importantly, it requires an interactive relationship with information flowing in both directions. This means that the relationship will change, be differentiated from other relationships and generate trust over time, Rogers said. It also means that the enterprise must embrace two-way marketing from top to bottom.

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