Whether you call it database marketing, relationship marketing or one-to-one marketing, companies increasingly focus on transforming their best customers into a loyal and lifetime stream of revenue.
Database marketing isn’t just for airlines, financial institutions and telephone services, whose frequent-user programs abound. It’s applicable to business-to-business market segments as well. At the heart of this direct marketing tactic is the time-honored principle that 80 percent of your business comes from 20 percent of your customers, no matter what business you’re in.
So identifying your best customers, giving them preferred treatment and communicating with them regularly is a logical course to selling more products or services to them. And, of course, this all happens below the radar screen of your competition.
It’s important to understand that relationship database marketing across the BTB segment is quite different than it is across the consumer market. The idea is the same: use technology to create and maintain highly targeted information so that the most ideal messages are delivered to your audience at the right times.
But BTB database marketing brings a new dimension.
Consumer vs. BTB. Relationship database marketing in the consumer market is straightforward. One begins to build knowledge of consumer preferences by sending preference queries that relate to their desires and plans. Individuals who make up the consumer market know what they like and dislike and what their plans are. Therefore, they usually have a sense of “how to get there,” how to approach and obtain what they need.
Relationship database marketing in this segment requires professional communications that boost awareness, interest, desire and action, and involves consistent follow-up to ensure that the right offer is at the right place to the right target at the right time. It is a matter of good database relationship marketing drawing on readily available technical expertise.
BTB relationship database marketing requires more. Rather than appealing to individuals, we’re appealing to a company doing business with multiple individuals. Rarely is there a commonality of thought on what any business needs at any given time to enhance its business and marketing position. Also, businesses consist of individuals who collectively make the decisions for their enterprise.
As with the consumer segment, before implementing relationship database marketing a marketer should know the goals of the decision makers who are most influential in the corporate environment. As BTB database marketers reach out to their audiences, they should remain aware of and consider these critical elements:
· The 80/20 golden rule. Many know that 80 percent of sales comes from 20 percent of customers. Relationship marketing has been invaluable in identifying those “best” customers and tailoring product messages to a company’s most lucrative segments. What if your company could use that customer database to ask pertinent marketing questions of its target markets, to determine customer needs well in advance of product development and factor that information into every aspect of product development? The possibilities open wider to drive sales further and faster.
· Technology behind the relationship. Relationship marketing has been fueled by technology, which lets us mine for those golden customers. Database marketing enables the creation of a list-driven direct mail piece that focuses targeted messages, sales promotions, cross-promotions and incentives toward best customers.
The new model for relationship marketing is quietly surpassing the old boundaries of database marketing. Rather than promote products to various customer segments, relationship marketing equips you to anticipate needs in the marketplace and deliver products to address them.
This cannot be done without an impeccable customer database. Customer lists contain valuable information. How well that information is mined depends on the quality of the tools used. How flexible is the database at delivering the necessary information? How well can it segment and question a customer database? How quickly can it pull up the data requested? Many companies mistakenly consider their computer system a one-time capital expense. But a computer system is the key to a company’s growth using relationship marketing. It must be upgraded continually to provide information about customers faster, with finer detail, and with more power to interface with other departments in the company.
· Engaging customers in a profitable dialogue. Relationship marketing lets companies engage their most-valued customers in a continual dialogue, constantly learning how to improve products and services and tailor them to the specific need of lucrative market segments or individual customers. The information gleaned from relationship marketing can drive everything from packaging and delivery options to promotions and pricing.
Key elements. Relationship marketing lets companies know what, when, how and where to sell, or not to sell. It is a 21st-century win-win strategy. Customers win by having their needs met while companies win with increased customer loyalty and sales from the existing, thus most cost-effective, customer base. This is an optimal resource allocation that ensures your company’s investment yields maximum returns.
The following are key elements of relationship marketing:
· Strategic thinking. The principal goal of relationship marketing is the relationship between the customer and your company. Relationship marketing is a process of gathering, maintaining and updating customer information, storing it in computer files and accessing it for use to drive marketing, sales and communications. Companies gain the ability to fine-tune product management decisions, making them more precise and profitable.
· A relationship to technology. Relationship marketing is a unique blend of technology and marketing support professionals. The database is the core of a relationship-marketing approach, one that can track and file pertinent sales information about the most valuable customer base, and allow easy access to that vital information. Technology is the foundation of relationship marketing, and software systems that are flexible, scalable and adaptable to changing market needs in various open-architecture formats are the best choices.
· Innovation. Relationship marketing is an innovation. It is akin to having a personalized relationship with each customer and prospect. As mass culture and markets fragment, and as niche markets grow, relationship marketing lets companies develop an ongoing dialogue with the market to support the best possible sales and profitability. The sale should never be an end in itself. Each sale should mark the start of a continuous relationship with a customer, one poised to strengthen over time. In other words, a good buy should never end with a goodbye.