CRM analytics: The fuel for the engine. METHODS

Prophit Share (PS) follows a four-step process consisting of:
— Customer strategy
— Customer buying process
— Actions/Tactics and campaigns
— Learning

Step 1: The customer strategy

More often than not companies have a business plan, a marketing plan, financial requirements etc, almost always geared totally around product but with a mission statement to the effect that ‘The customer is the most important part of this business’. So why don’t they have a customer strategy?

Do they know who their best customers are, who makes the most profit, who costs them money or even who has more than one product? If not, how can they say that the customer is the most important part of their business when they don’t know anything about them? How can they evolve a strategy when they don’t know which types of customers in their portfolio to grow, maintain or even reduce?

Those companies that do have a customer strategy often work with constraints by having separate strategies for each product or distribution channel; this

EXAMPLE 1
Some years ago a well-known travel company decided to reward their most loyal customer. They trawled their databases for a winner, which took weeks, but eventually they found one. The winner was an 87-year-old lady and the reward — a lifetime’s supply of champagne, which she didn’t find particularly appealing!
The tragedy here is not only the fact that they did not know that this lady had travelled with them for years and years, but that even when they found her, the reward was not particularly appropriate.

leads to cannibalisation of their base by one area targeting existing customers through another area of the business. Taking one insurance company as an example, the direct area targeting prospects already insured with the company via a broker, which is not a very good situation to be in for the insurer, the broker or the poor confused customer.

Although the IT infrastructure or data issues are often quoted as the most difficult hurdles to overcome, these pale into insignificance when compared to the cultural problem that companies will face: the old ‘information is power’, ‘the customer belongs in direct, leave him alone’ approach, product managers versus marketing etc, etc that anyone with experience of working within a large organisation will have experienced.

Why do employees, often middle management, feel this way? It is because they are targeted with the wrong things or, should it be said, not all the right things. Again in an insurance company, targets are set against policy counts, income, loss ratios, but nearly always by product.

In telesales, there are targets to increase call volumes and reduce call durations, but not always to maximise conversions, which surely is the sole reason for all activity in the first place — often this is the target of the pricing area. Perhaps companies should focus on a lower number of calls and spend more time with the customer if they know that they have a good chance of that individual converting. Consistently, the best telesales people are those who spend a little longer with the customer on the phone and who start to build a relationship. After all, it is not too difficult to arrange an above-the- line campaign followed up by mailers to get the phones ringing, but it is horrendously expensive and often untargeted. It is more difficult, however, to get the right targets to contact the company in the first place, but when this approach is successfully adopted the marketing costs are greatly reduced and the ROI is far higher.

Imagine the situation where telesales know when they are speaking to a customer at point of sale that they should spend more time with them, as this person fits with the desired profile of their ideal customer. Focusing on securing that sale rather than just treating him or her as just another prospect should be paramount.

Step 2: The customer buying process

It is important that companies understand where their customers are in their buying process, as different tactics have to be adopted to manage relationships at different stages. The buying process can vary from client to client but there are five generic stages that everyone goes through regardless of what they are buying:

Aware

This is the earliest stage where customers become aware of the fact that they have a need for something, for example a deposit account or a new car. From a company perspective, these are the customers who perhaps are aware of the brand but have never been solicited to buy a product. They are often the universe of prospects that are not sitting on a database anywhere in the organisation.

Inform

After the awareness stage, customers have to gather information and research what is available to meet their need. Again, for a company these could be prospects on a database that have been contacted in one way or another, but have not responded or made a purchase.

Decide

This is where all the information has been gathered and costs are known so customers are collating all their data to make their decision on purchase. These will be the banks of customers that have requested and received packs or quotations from a supplier.

Purchase

As the name suggests these groups are the buyers who have gathered the information, made their decision and moved to purchase the product or service from the supplier. These are existing customers with one product in an organisation.

Re-purchase

An important stage, and one that is often missed out, is the opportunity to cross-sell products or services to the existing base of customers. Often companies are willing to go out and get external data to acquire more customers for a product, rather than maximising their base and trying to sell additional products to existing customers. Much research has been done in this area and it is known that customers with one or more products are more likely to renew with the company; opinions differ, ranging from 5—10 times greater likelihood of remaining with a supplier if they have more than one product. To put it simply, it is better to have lower numbers of customers purchasing multi products than to have high numbers of customers with one product. On a database these are the customers with more than one product with the same supplier.

Even understanding where a customer sits within the buying process allows a company improved management of its client relationships, helps to direct its creative and goes some way to calculating customer values in terms of knowing those clusters of customers that are likely to remain loyal and also purchase more than one product.

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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