Value Comes First
Situation 2. The consumer goods manufacturer needs to evaluate the benefit of direct communication with consumers and understand how consumers can be effectively targeted given the challenges manufacturers confront in acquiring transactional data. Direct market research and data collection can determine the value potential of direct interaction, as well as define the profile of an attractive consumer (e.g., analyzing demographic and behavioral data). It would then be important to decide how to use indirect sources (e.g., compiled lists) to target prospects. Programs can be developed to test response to direct marketing campaigns. The results would help justify a broader CRM plan while simultaneously providing a road map for design and investment.
Situation 3. The insurance company could begin by analyzing its existing client base to develop a profile of its best customers, as defined by lifetime value or profitability. The profile would take into consideration both revenue and cost components for the acquisition and management of the policy over its life. Targets could be set to maximize profitability, and specific marketing and customer service programs could be developed that aim to reach these targets. Examples might include reducing acquisition costs by using response lists that have characteristics from its best customer profile, or creating a scoring mechanism to apply against a compiled list. Tests could be conducted to determine the value in knowing more about prospects, which could drive the plan for broader CRM initiatives.
Aggressive and thoughtful target setting and program testing can provide inherent, near-term value and help guide longer-term CRM investments. Companies are well served by taking a rigorous, analytical approach to establishing goals and targets for CRM, and following with measurable test programs. This "jump-start" will be a key element of success for all CRM efforts.
Michael J. Penney is the executive vice president of market development for Epsilon and can be reached at (781) 685-6800, or by e-mail at email@example.com.