Greater Use of Response Lists Can Bolster CRM Initiatives

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Customer relationship management is certainly a term you have been hearing a lot about lately. But what does it really mean? And, maybe more importantly, how can you capitalize on it?

I have recently reviewed my own experience, read articles, talked to consultants in the CRM space and acquired analyst information to try to answer these questions. I found that though everyone has his own verbal definition, some common and loose elements are:

• CRM involves knowing your customers and having contact with them.

• It involves some level of technology to support the effort.

• It is not working particularly well for very many companies yet.

Real specific, right? Digging a little deeper, I found one model that seems to be emerging as the view that many are locking onto.

The Gartner Group, Stamford, CT, predicts that CRM initiatives will grow to $125 billion by 2004. That is a little more than half the size of the entire direct marketing industry, according to the latest Direct Marketing Association survey. The big question is: How can you grow your businesses and the industry by capitalizing on these large budgets and strategic initiatives?

One obvious answer is in the area of providing lists and data. Many of the suppliers of compiled data today are enjoying growth from this space. Among other things, they are overlaying demographic information onto customer records. They are also providing common codes on names in multiple systems enabling data integration.

Not a bad start, but what is missing are response lists. All good direct marketers know that response information is incredibly powerful and meaningful. It gives you a great ability to "know customers," which is the mantra of CRM. Yet, response lists are not participating in the explosion of CRM to the degree that they could.

A lot of time and dollars are being spent on customer relationships, but what about the old "leaky bucket syndrome" that is so common? As customers wear out, where do you go to replace them as attrition slowly erodes your file? To prospects. And where do you find the best prospecting lists? With some debate over the value of modeling compiled data, many would settle on response lists. CRM marketers need response lists. But these buyers are not the traditional circulation planners and direct marketers that brokers are used to serving.

There seems to be some huge sales opportunities for brokers and managers, but there are also some intrinsic barriers to capturing those sales.

The orders may be smaller, and therefore, brokers cannot afford to service them.

The one-time usage and creative approval standards may preclude the lists from being practical for the CRM marketer to use.

The length of time it takes for a CRM marketer to acquire and integrate a list into her system is longer than the list update cycle, reducing the value of the list. Hotline names make a difference, but the CRM marketer cannot take advantage of it.

To make response lists work for CRM initiatives, all these barriers must be broken down. At first blush, they may seem insurmountable. But they do not have to be. Automation, integration and some amount of cooperation can break them down.

Automation allows brokers to serve smaller customers because they can drive some of the operating expenses back to the customer. Many list professionals are announcing "direct counts and information access" over the Web.

Automation may also allow brokers and managers to gain more rapid usage and creative approvals. And so it seems, you are on a roll. But then you hit the biggest barrier of them all: CRM marketers don't just want to mail a name, they want to "market" to it. This implies that they want to run campaigns with multiple contacts or give the name to a sales force for them to call upon many times or to simply gain business intelligence from it. In some cases, they already have the name, they just want to gain insight into the behavior of the person - real behavior, not compiled or modeled. Simply automating counts and orders will not help here.

So how can a marketer quickly integrate a response list into her system if she can only purchase it for a one-time usage or can only ship it to a third-party bonded mail house?

Could you change the rules and ask owners and managers to give up usage and creative control? No.

Could you charge a significant premium for using the list multiple times, then hand it over? It might work for some owners, but probably not too many.

Could you aggregate response lists and create personas about people without compromising privacy? The CRM marketer would give her list to the list professional who would overlay it with "selects" that are anonymous - a new kind of enhancement data. This has been done effectively with compiled data over the years. Could it work for response data? It would take the participation of many response lists to make this interesting, but this idea has potential.

Could you create a "virtual" prospect database of names specified by the CRM marketer? Identification codes, linked to a list, would be de-duplicated and enhanced, ready for the marketer to grab as each usage occurs. This is a variation of the old prospect database. There are technical solutions that exist that make this idea very viable.

There are other solutions that may evolve. But automating access, integrating response lists and cooperating as a list community is at the heart of all the solutions that will allow list professionals to capitalize on the exploding CRM market.


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