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A little shameless
commentary
Welcome to the
party
DCI’s recent CRM conference in New York had
a number of popular breakout sessions, but none was more popular
than “Overview CRM Masterplan – Step 1: People, Process and
Technology; Why the Right Mix is critical.” In fact, this very topic
has become white-hot as organizations struggle to gain value from
their CRM technology investments.
Of course, most of you know
we’ve been preaching that technology is simply an enabler of CRM
since we launched our business. Moreover, our business model is
built around having a team experienced in overcoming people,
process, data and technology challenges.
Perhaps the most
telling of our long-held belief in human behavior and organizational
process as key drivers for CRM success is Dave Harkins’ original
article on the topic for Direct Magazine in March 2000 (click
here to read), and revised for Insights to Action Issue 4 in
October 2001 (click
here to read).
It seems we were once a little ahead of
the curve in our thinking. We’re glad to see that the rest of the
world is catching up.
IN THIS
ISSUE:
Keeping your job.
[ Read
]
Dave Harkins gives a few tips to help marketers drive
sales, and just maybe keep their jobs.
Got
CRM? [ Read
]
Randy Taylor explores what to do after you've
installed that piece of software.
Wherever they go, there you are. [ Read ]
Mike Ellsworth examines Short Message Service (SMS) and
it's impact on marketing.
Keeping your
job.
-- Dave Harkins, Co-CEO/Managing
Partner
The notion that Marketing isn’t Sales is an old,
but somewhat untrue statement. We marketers have learned the hard
way that marketing’s number one priority is to drive revenue for the
organization. I think we now realize that long-gone are the days
when marketing produced pretty pictures, glossy brochures, gimmicky
promotions and brand advertising that don’t drive short-term sales.
Those days are but a memory for marketers--up in smoke like many of
the firms that promoted such frivolity and spending with reckless
abandon.
Today’s environment requires marketing that’s
effective. And to be effective, marketing must improve the top-line
with new sales, and the bottom-line by improving efficiencies in
marketing operation. If marketing can’t do both--deliver a large
number of qualified customers, in a cost effective manner--then
doesn’t deliver tangible value to the organization.
In most
organizations these days--regardless of if you’re selling to
consumers or businesses--marketing’s primary job is to support new
sales in an anxious push for increased revenue. Certainly, driving
new sales can generate new revenue. However, blindly focusing on
acquisition can wreak havoc on an unprepared organization in terms
of insufficient capacity to handle front-line sales or
merchandising, sales fulfillment, customer service or technical
support. Worst of all, with the organization concentrating on
bringing in new customers in the front door, no one is watching the
back door as existing customers stroll out. We would all agree, I
think, that watching the back door is perhaps more important for
long-term business success.
Balancing the organization’s
desire for new customers with its desire for new revenue can be
tricky. Somewhere, somehow, someone got the idea that new customers
are better for producing revenue. While it may be true with some
commodities, it’s largely an untrue generalization. The best source
for new revenue is the existing customer...not the new ones. The
challenge is that building business from existing customer is a
relationship sell--something that’s longer term for the
organization--and not something than usually can be leveraged to
create an immediate impact on business revenue.
Relationship
selling is what marketing is about, so changing a marketer’s mindset
to focus on more immediate needs of sales can be a difficult thing
to do--all marketers reading this raise your hand if you’ve ever
said, "That’s a sales problem, not a marketing problem". I’ll bet at
least 75% of us raised our hand and of that number another 50% has
at some point lost his or her job because our boss thought we
weren’t demonstrating a tangible contribution to the sales
efforts.
Marketers are generally good at relationship
building efforts, but let’s examine a few other ways to improve
marketing effectiveness (nee drive sales) in the near term:
-
Do what works not what is pretty: It doesn’t have to cost
a lot, nor does it have to be pretty to generate sales.
Creative-types always strive for a pretty ad or marketing
collateral, but the most important thing to get across is benefits
of the product or services that you’re selling. Some of the most
effective marketing campaigns were four-page direct mail pieces
filled with nothing but text. If it works, and doesn’t degrade the
overall image of the company, who cares what it looks like. In
direct response, it’s about the offer, the audience, and then
creative. That’s not a bad approach to take for all marketing
efforts.
-
Analyze and measure activities: Track the effectiveness of
your marketing efforts. Are your programs driving people to your
stores? What’s the increase in average daily sales volume during
the promotion? Alternatively, are you successful in generating
leads for the sales force? What’s the quality of those leads? How
many of those leads have turned into sales? What was the duration
of those leads in the sales pipeline?
With the exception of
those in database or direct marketing, most marketers don’t track
the effectiveness of their marketing efforts. Doing so is critical
to gaining ongoing corporate support for marketing. Figure out how
you can track and measure every thing you do with your marketing
dollars.
-
Create a dialog with sales, merchandising, and other
departments: Communicate with sales, customer service, tech
support and all other customer-facing departments. The people on
the front lines deal with prospects and customers on a daily basis
and can tell you more about a customer and market needs than any
market research study or survey. Gain input from individuals in
these areas to develop such things as message strategies,
collateral pieces, promotional ideas, and mailing lists to ensure
that your marketing efforts are truly in line with prospect and
customer needs, values and expectations.
-
Listen to customers: Once in a while, pick up the phone
and call a few customers. See what they like and what they don’t
like about your advertising, marketing, services, sales and
products. Do it randomly and periodically and you gain tremendous
insights into the effectiveness of your marketing
efforts.
-
Create opportunities to generate sales: Figure out how to
help the sales and merchandising teams gain immediate sales.
Working with them, you may find a simple, easy-to-do promotion
will fill an urgent need that will drive short-term sales. This
will ensure additional cooperation from the front-line, and gain
recognition with you management for driving
revenue.
There are many other ways to improve
marketing effectiveness, and while the points listed here may seem
most obvious now, we often forget about these when going about our
daily work. But above all, if you can remember that marketing is
truly about sales--moving merchandise and making the cash register
ring--you will be a more effective marketing and may never need to
worry about job security.
Dave Harkins can be reached by
email at: mailto:%20dharkins@taylorharkins.com
[ Return
to Top ]
Got
CRM?
-- Randy Taylor, Co-CEO/Managing
Partner
Got CRM? Maybe you just installed your new CRM
software; but, does that actually mean you have achieved CRM? So
what’s next? What should you be doing to ensure results are gained
from that nice piece of software and that CRM is actually realized
within your company?
Let’s stop for a moment to think about
what went into the process for determining your company needed this
new system, or needed a CRM initiative. What were the challenges,
issues, goals, and objectives that went into that decision process?
Whatever your goals are, higher retention, better customer
satisfaction, improved process management, one needs to understand
the effect of this initiative on everyone effected--customers,
prospects and employees.
Did I say employees? With any CRM
initiative people, specifically those people on the front lines, are
the cornerstone to the initiative’s success.
That said, what
are the next steps in ensuring that the initiative is a success and
your company gains a return on that technology investment?
-
Organizational Evaluation: Will more than one department
(sales, marketing, distribution, accounts receivable, customer
service) use the new technology? If so, the employees in these
areas need to be evaluated for their ability to make understand
the CRM concept and make change. Based on the evaluation, group
individuals by their abilities and tailor improvement plans based
on their needs. Most importantly, make sure they are providing
input into this process to avoid implying previous poor work
ethics and reducing resistance to change.
If the system is
designed for one department, try to understand how it can aid in
CRM efforts in other, customer-facing departments. CRM strategies
typically require inter-department exchange with common customer
management goals to make for success.
-
Training: Assuming this initiative was based on
technology, one would want to start with the people on the
frontlines, talking with them, understanding how they interact and
then training them on how to use the system to improve their
effectiveness. Training certainly should start with the basics of
the service shift, then move toward understanding how making
changes can improve not only how they work, but the net effect on
the customers and prospects and, longer term relationships with
those constituiencies.
-
Analysis: Analysis is a key step in any CRM or knowledge
based initiative. Once the CRM technology is up, and hopefully it
includes information from sources beyond marketing, the
information should be analyzed to understand knowledge expansion
on customers and prospects. It is knowledge expansion, because new
findings should be gleaned from the integrated data; behavior,
beyond response to campaigns and purchase history. Examples may
include returns, payment, customer service interaction--all
information that can lead to characteristics of each customer that
is used for better preparing a company to interact with each
customer or prospect.
-
Segmentation: Once the initial analysis has been
completed, the formulation of segments can be made. In CRM,
segmentation tends to take on a micro form. With the wealth of new
information gained through integration on non-standard sources of
information, companies can start to make better assumptions on
behavior and customer loyalty to their companies, and in return
develop micro strategies for handling these micro segments.
-
Program Development: Now that customers and prospects can
be better identified, it is time to develop programs that
effectively administer business operations to them. Programs
developed under this plan include not only marketing, but also
service, contact and communication from every customer-facing
department using a consistent message and process. By doing so,
responsiveness, loyalty and ultimately return will be
realized.
-
Measurements: As part of program development, metrics to
measure change or success will have been established. As the
programs are executed and running, periodic checks on these
metrics need to be prepared. The understanding of the results is
used for determining what successes or failures occurred, and
learn where to make adjustments.
-
Planning/re-planning: The knowledge gained from the first
six steps can now be used to planning, or in reality, re-planning.
At this point, a company will want to take the opportunity to
determine what efforts are moving the company closer to their
objectives for the CRM initiative, and learn what else needs to
take place to enable further gains. This re-planning will look at
all of the contributors; people, process and technology, and
determine where opportunities can be taken advantage of and expand
the overall effort.
-
Start again from the top!! Finally, the process starts all
over. CRM is not a one-time process, but and ever-evolving process
that needs continually improvement or adjustment. By starting all
over, improvements can be made along the way to adjust to
personnel, business environment, customer or prospect movement or
product shifts.
As on can see, the cycle of next steps
are very similar to the old direct or database marketing process,
only expanded to be an enterprise initiative. In reality, "Got CRM"
is not an end to a means, but a means to improve the ever-changing
way companies organize their business to service customers. If
companies are not improving their operations through effectively
improving the mix of people, process and technology, then CRM is not
attainable.
Randy Taylor can be reached by email at: rtaylor@taylorharkins.com
[ Return
to Top ]
Wherever they go,
there you are.
-- Mike Ellsworth, Executive
Consultant
A rather important event for cell phone users
happened recently, and almost nobody noticed. For the first time,
U.S. users of a wireless service known as Short Messaging System
(SMS) can send messages to people who subscribe to a different
carrier. So now, for example, a Sprint user can message a Verizon
user. This puts U.S. users on the same footing as European users
have been for years, and it opens up an exciting new channel for
U.S. marketers.
The SMS service allows cell phone users to
tap out short (160 character) messages on their cell phones and send
them to another user by using that user’s cell phone number as the
address. Depending on the model of cell phone, the recipient can
reply to the message in real time. In Europe, where SMS is very well
developed, users send as many as a billion messages a day and
average 16 billion per month (up from a worldwide monthly total of 7
billion a year ago). In contrast, U.S. cell phone users sent a
paltry 400 million messages in December 2001. The advent of carrier
interoperability promises to energize U.S. SMS usage, especially
among younger consumers.
Should a marketer be concerned with
the SMS phenomenon? Well, just look at the stats:
- Wireless is the fastest growing communications channel in the
U.S. with more than 136 million subscribers and a projected 230
million by the end of 2006.
- In Europe, mobile marketing has achieved response rates as
high as 20 percent with ad recall rates up to 65 percent.
- Industry analysts predict that mobile marketing will become a
$5 billion industry by 2004. Gartner Dataquest says worldwide
revenues from all forms of mobile messaging will almost double to
$22.3 billion by 2006 from $13.4 billion last year.
- Nearly a third of U.S. wireless subscribers plan to upgrade
their handsets within a year and 67 percent of them want short
text messaging on their new phone according to a study by Telephia
and Harris Interactive. Users’ actual behavior is even more
interesting: Replacement sales will account for more than 70
percent of new handset sales in 2002 according to Strategy
Analytics.
If that’s not enough to convince you
there’s a new marketing medium brewing, take a look at how important
SMS is likely to be for U.S. wireless carriers: In Europe, short
message service makes up 15 percent of all cellular revenue and,
more significantly, 40 percent of the overall industry profit
margins, according to Colin Matthews, President and CEO of
InphoMatch. Consulting firm BWCS predicts that a third of wireless
carrier revenue will come from advertising fees and commissions in
2005. With wireless adoption approaching saturation and slowing from
its frenzied growth of the last few years, wireless operators will
increasingly stress SMS services as a way to wring more money out of
existing customers.
Using a New Medium
Already,
forward-thinking marketers on both sides of the Atlantic have rushed
to exploit SMS. Some innovative European services include:
- Cellus is planning to launch a mobile phone service in Norway
to help drivers dodge police speed cameras.
- The Eirpharm SMS reminder service reminds patients to take
their prescription pills and the company has developed a
pollen-alert service with UK mobile-phone operator
Vodafone.
- Ekaterina Sitnikova, a Brussels-based music promoter for Mal
& Co., uses SMS to make sure people don't miss the launch
party when one of the artists she represents unveils a new
song.
- The VirusAlert.nl Web site sends computer virus warnings to
subscribers' mobile phones in the Netherlands, Belgium, and
Luxembourg.
- In Zurich, city officials use SMS to remind people when
recycling-pickup dates are coming.
- SMS is used to reduce waiting times for three of the top rides
at the Alton Towers theme park in the UK.
- The Riminibeach.it site in Rimini, Italy provides a "wind
alert" service. Whenever wind speeds climb above 12 knots, a
computer sends SMS messages to sailors and windsurfers.
- Sky Digital customers in the UK can send text messages from
their digital set top boxes to cell users, and now a new service
enables mobile users to reply to the messages.
U.S.
marketers are getting into the act as well:
- M-Qube is introducing a platform for advertisers to launch
marketing campaigns via SMS, with a focus on North American
customers.
- People2People Group has a service that sends personal ad
matches through SMS.
- Yahoo! sends bulk SMS messages to AT&T subscribers to
drive traffic to its wireless Internet sites.
- The CambridgeSide Galleria mall in Boston enables shoppers to
use their cell phones to get instant coupons for Galleria
stores.
- SMS@ctive Technologies launched its Term Messaging Service
that allows subscribers to receive pre-programmed messages and
additional content such as stock alerts and meeting reminders 24
hours a day.
- eBay and InPhonic will launch an SMS-based bidding system
called Wireless Rebidding for $2.99 a month. eBay currently offers
SMS message alerts about auctions as part of its eBay Anywhere
campaign.
Finally, cell phone users themselves are
coming up with some innovative uses of the service:
- In Switzerland, bird-watchers can update each other on
sightings by punching in the species and location using an SMS
system that also displays a list of the "best beaks" sighted on a
Yahoo Web site.
- A Dubai court has legally endorsed a divorce notice issued by
a Dubai man to his wife via SMS. The husband sent a message to his
wife saying, "Why are you late? You are divorced." (According to
Islamic law, a man can divorce his wife merely by saying, "I
divorce you" three times.) Luckily, the man later changed his
mind.
New Features Make Mobile Marketing Even
More Attractive
With all this marketing activity
occurring on a medium that limits messages to 160 characters of
text, think of the opportunity that will be available once
Multimedia Messaging Service (MMS) begins to take hold. MMS features
long messages as well as the ability to attach sound and pictures to
messages. The service is already available on some cell phones--like
those featured in the AT&T Wireless and Sprint ads you have
probably seen on TV and in newspapers.
"Expectations are now
that MMS will be larger than SMS--at least in the number of messages
sent--in 2005," said Per Lindblad, head of Ericsson's MMS unit.
However, the key to this growth is not likely to come entirely from
marketing messages. "I think it's going to be a lot more successful
than WAP [Wireless Application Protocol, a cumbersome way to create
wireless applications], because MMS is about person-to-person
communication," he said. "This is the key element, because
push-based services are unlikely to achieve such a
success."
Nonetheless, the ability to send pictures and
longer, rich text messages really opens up a wealth of possibilities
for marketers, and several companies are already offering or
readying MMS services:
- RealNetworks has partnered with Major League Baseball Advanced
Media to provide live audio streaming feeds of professional
baseball games to cell phones. For $19.95 per month, fans can get
the local audio feed of games and receive updates on other games
via SMS.
- PocketThis lets users send information from the Web to a
wireless phone with a series of one-touch options built in to the
application, such as send to a friend, call to buy tickets, get
insurance quote or check flight status.
- Sony Ericsson announced a deal with Hallmark and THQ Wireless
to develop MMS games and card greetings.
- Microsoft will roll out its popular MSN Hotmail service for
mobile phone users in Singapore, Hong Kong, and Taiwan.
- The music performing rights organization BMI signed a
licensing agreement with Cellus USA covering the public
performance rights on behalf of approximately 300,000 songwriters,
composers, and music publishers for 4.5 million musical works. But
you have to ask yourself, will cell phone music services really
compete with radio?
"As a channel, mobile
marketing's time has come," said venture capitalist Joel Cutler,
whose firm General Catalyst Partners recently backed m-Qube, a
Boston startup whose software helps companies do mobile marketing.
Indeed, according to Jupiter Research, European advertisers will
spend $53 million for mobile campaigns in 2002 and, although North
American numbers are still negligible, the firm projects the market
will catch up by 2006 on the strength of use by fast food and
consumer product companies.
Marketers will be using the
mobile channel for alerts, couponing, games, promotions, and
sweepstakes. And because of the interactivity of SMS, market
researchers will be interested in polling and consumer preference
studies.
The key to the success of all this activity,
however, is permission and the development of a relationship with
the cell phone user. If marketers abuse the channel to broadcast
spam, as has happened with email, users will be turned
off.
"Users will not be receptive to being solicited for
products and services on their wireless devices if they have not
explicitly requested it," warns ad firm Carat Interactive. Equally
important is responsible privacy policies. Marketers need to build
trust to be effective in mobile marketing.
There is nothing
quite as personal as a phone, living as it does in pocket or purse.
Abusing the privilege of reaching these consumers will backfire, in
part because of the intimacy of the device, but also because of its
immediacy. Spam email can be ignored, deleted easily, or routed to
special folders. Telemarketing, while much more intrusive, can be
ignored through use of Caller ID. Nevertheless, spam SMS messages
could carry the interruption potential of telephone marketing to an
extremely irritating degree. Indeed, expect laws to be enacted in
this area. (One bill, HR 113, was introduced in January 2001 but was
referred to subcommittee.)
What Should You
Do?
If you have a product or service that could benefit
from being able to touch customers in real time wherever they are,
you should be looking into SMS messaging. However, it will pay to be
very careful in this uncharted marketing territory as the rules are
by no means clear yet. You should start with high-value,
permission-based messages to users who have very clearly consented
to being contacted in this manner. Irresponsible use of this new
channel could quickly ruin this exciting communications
capability.
You should also keep in mind the limitations of
the medium. For example, if you want a response from your targets,
it may make more sense to ask them to call a toll-free number than
to peck out a return message using the phone's limited keypad. If
your users are already MMS-capable, be aware that the data speeds on
current wireless networks average less than the speed of current
dialup Web users. Don’t send huge, and perhaps costly to download,
graphics or video files.
As with any permission-based
campaign, the best thing you can do is offer something of value--a
discount, a coupon, or free goods or services. Doing so will help
overcome any resistance your customers have to being contacted in
such an intimate way.
Mike Ellsworth can be reached by
e-mail at: mellsworth@taylorharkins.com
[ Return
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Insights to Action™ is a
periodic publication of Taylor Harkins Group.
Copyright ©
2002, Taylor-Harkins Group. All Rights
Reserved.
About Taylor-Harkins
Group
Taylor-Harkins Group is a professional services
firm specializing in optimizing marketing operations. We help
organizations find ways to drive revenue and reduce costs associated
with marketing and sales. Using structured, time-tested proprietary
frameworks and best practices, we produce high-impact results by
leveraging the optimum mix of people, process, and technology in
refocusing marketing toward activities that generate
results.
For more information about Taylor-Harkins Group,
visit our website http:///?source=ita_edition_9
or call Dave Harkins at 630.820.2087
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