The role of CRM in a downturn

Over the past few months I seem to be having more and more conversations about CRM.

As budgets tighten (or disappear), pressures for returns increase, the logical focus is on existing customers and stopping the leakage of defection and looking for ways to increase their engagement – and ultimately contribution. The interesting thing is many of the conversations are being viewed as short term tactical activities that will cover off the downturn until things pick back up and the market returns to normal.Things like “… we need a CRM program – now, and can you give us some activities on how we can *insert activity such as acquire, retain, sell grow*…”

CRM is a strategy, not a tactic. Any program should be viewed as a long term investment that can take a while to really show return. It isn’t a quick fix.

Having said that, tactical initiatives can certainly add customers, increase product usage and hit the sales graph in the short term – and are important within the holistic marketing plan. However most tend to be promotionally led, meaning the cost of acquisition and usage increases. And the likelihood of those customers defecting to your competitor when they come out with a newer, shinier offer, increases.

Importantly, with a longer-term strategic vision, these tactical activities can provide the foundation for the future program. And companies that have invested in this area of customer engagement are sitting in an interesting place at the moment.

I am regularly asked “who does it really well” and “what are the best programs”? The good CRM programs are the ones you don’t really see – unless you are a participant. There are two companies I regularly deal with who I have recently received communications from – and this got me thinking about the CRM area – as a customer.

As a MyerOne card-holder, I have been inundated with offers in recent times – I’m thinking that many of their 2.7 million card holders have been – based on the strategy highlighted in B&T on 16 March where Myer announced they were going to move their marketing activity to the MyerOne customer base ( Now whilst these offers aren’t specifically relevant to me – I am the cardholder, my wife is the spender – they have been passed on and I am sure some (more likely many) have been used.

The challenge here is that it can seem to be their catalogue strategy delivered by email – hoping that there is something among the myriad of offers that will trigger an action. And at times there is. But Myer have the data – they get my MyerOne card every time a purchase is made, and they have an opportunity to drill into this data and deliver specific, targeted offers and messages.

The other company that has come to prominence is a Qantas. I have been a Qantas flyer since 2000, and recently they noted my decline in flying behaviour (mainly due to change of job) and have delivered a great incentive to get me flying again (which by the way is working). I was surprised to receive this from Qantas as aside from the weekly/fortnightly Redi-Deals email, the only time I receive anything from Qantas that is relevant and personalised is when my annual renewal comes up and they give me a new membership card that tells me what tier I am the next year.

I cannot ever recall having received something as targeted and relevant. The point to this example, is that Qantas has used my behaviour as observed through my customer data to inform the communication strategy. They have delivered content in the context of their audience. And this can be done irrespective of the size of the company.

So what can businesses do in this climate?

Without breaking the bank, and without taking so long that the market has picked up and we’re “back to normal”, you need to:

Capture customer data – understand who they are and what they do with your company. Track their behaviour – and that includes online and offline. And the database doesn’t need to be a multi-million dollar infrastructure.

Develop customer segments – analyse the behaviour and identify usable customer segments and profiles within your database. Leverage those insights and look for ways to get them further engaged with your brands.

Manage the experience customers have with your company – across all possible am, but something that is relevant and meaningful to your customer and your business.

Differentiate activities – not all customers are created equal – invest your marketing budget in the way that gets the best results.

Spend some time and work through these areas, understand your customers and give them more reasons to do business with you. B ack in Adelaide, there was a guy that ran the corner store near where I grew up and he had it down pat. He knew every customer by name and their family. He knew what they liked, and their purchase habits. Often I’d walk in and head to one corner of the store to return to the counter where he would have 2 or 3 different items sitting there for me – which was hard to say no to.

And after a while, he ran an account for me at his instigation – in fact rarely did he ever ask for money, just put the transaction on the piece of paper stuck on the side of his shelves (with about 30+ others) knowing it would be paid – and confident of getting paid as he knew where we lived! This went on for years – even when I moved suburbs it kept me coming back.

Now, that was understanding the customer and delivering the right experience.  


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s