Put the 'CR' in CRM, Build Credibility
Just in case the theory of CRM is new to you, the basic principle is this: Traditional marketing efforts have been geared toward asking for that "one more order." CRM, however, is based upon the belief that promotional efforts should be devoted to building the relationship with the customer as opposed to increasing response rates. The stronger the relationship, the more sales, and more importantly, the better the lifetime value.
I remember a speech by George Weiderman back in 1989 that dealt with the impact of age on baby boomers, who at the turn of the century, would be responsible not only for kids in college but for aging parents. The consumer's attention was going to take a dramatic turn - from the acquisitiveness of the '80s to the need for service and quality in the '90s.
The impact of technology has virtually eliminated the question of quality. Today, many of the products we consume and acquire are identical in everything but vendor name. The impact of the Internet today allows the consumer to scan for product and price, which makes it difficult for products to stand out from their competition. The only thing left is service.
Service can take many forms: prompt delivery, best price, easy access to information and - that most elusive of elements - a friendly voice at the other end of the telephone. Combine all these criteria together and you have the consumer relationship.
To illustrate my point, here's an example I heard someone use. Imagine that you live in the country and commute every day to your office about an hour by car. You leave early in the morning, stopping at the local general store for a cup of coffee to take with you on the ride. The owner sees you walk in the door and immediately starts pouring the coffee, making it just the way you like it. Unless, of course, it's after Memorial Day and before Labor Day: then he hands you an iced mochachino. He knows you by name, knows what you like and charges you a fair price while wishing you and the family a good day. Now that's service that cannot be duplicated, not by a big chain grocery store, a vending machine or even the most fashionable coffee boutique. The end result is a satisfied customer with undying loyalty to the general store.
Today's technology is striving to provide marketers with the ability to know their customers just as well as that general store owner and to be able to dish up that specially prepared cup of coffee for each customer that walks in the door. Read any of the hottest books on marketing today and you'll see phrases such as "the loyalty effect," "one-to-one marketing" and "permission marketing." Complex models diagram the benefits of mass customization, resulting in higher sales from a well-developed customer database. The message is clear, and like the song says, "It's cheaper to keep her."
So, what does all this have to do with the list business? Isn't CRM a technology that is reserved for high-power Fortune 500 companies? Not really. The list business is much like any other business and should pay attention to the lessons that other companies are taking so much to heart.
Loyalty, the foundation of almost all customer relationships, has to be built upon a foundation of credibility, and credibility is something that cannot be bought or rented. It must be developed over time.
In the list business, credibility is based upon availability of accurate information. Counts, usage, segmentation definitions and fulfillment capabilities are the bits and pieces of the list formula that brokers and managers have to rely on. If even one of these pieces of information is incorrect, then the equation fails to compute and the relationship suffers, just as if that general store owner had poured sour milk in your coffee.
Unfortunately, few list professionals are keeping up to the new environment of more lists, technological improvements and the Internet. Managers no longer associate list properties with the marketing strategies that create them. Brokers jump from one hot new technology to another, forgetting that they still have to pay attention to the older disciplines. And the end result? Owners and mailers both are beginning to lose faith in list professionals, those individuals who should be their marketing partners.
Every time list managers call brokers with ridiculous recommendations for the "list of the day," their relationships suffer. Every time list brokers harass list managers for better nets their client doesn't really need, their relationships suffer. Every time a mailer has to mail short because managers provided invalid universe and balance counts, and the brokers didn't question what looks faulty, the relationship suffers.
It's time that list professionals took some lessons from our clientele. List companies need to educate their staffs on direct marketing principles, as well as list maintenance and fulfillment. Everyone who picks up a phone should be directly responsible for the impact that communication has on the bottom line. Whether it is the receptionist who routes calls, the counts department that picks up faxes or the account executive who is negotiating pricing, everyone in the change of events can either strengthen or weaken the relationship with customers. They need to know that they cannot overlook their responsibility to get it right.
It is particularly important for the CEO's of list companies to pass this message on. With the aging of the list industry, we have in recent years seen a loss in senior list professionals, those who created the industry, built it with entrepreneurial spirit and acted as mentors to the next generation. There are few icons in our industry today. It is up to us to create some. After all, as a friend of mine says, "The fish stinks from the head down."
Lesli Rodgers is president of consulting firm LR Direct Ltd., Danbury, CT.