• by Kathleen Stockham , July 17, 2012

Are your CRM efforts aimed at a “big tent” strategy or just a pup tent? Do you know?

Some time back, we ran across a request from a client that put much of that philosophy into perspective. Their bootstrap-budget CRM had initially been aimed at a “Big Tent-All Comers” set-up, where any and all customers to their shiny, new brand were welcomed with open arms.

But then as the tent slowly began to fill up with opt-ins, the rush to purchase was simply not there. Why? Was it not targeted properly? Was the creative not strong enough? Do we even have the right customers? The questions were endless.

So, the pendulum swung the other direction and the circus tent was reduced to an umbrella and the same problems occurred; few sales, very little engagement and a lot of frustration. We scratched our heads in confusion but the client seemed to like the very “boutique” exclusivity and small-table appeal of “less is more.” Pup tent indeed!

So does it matter if you market to thousands who spend $20 apiece or four people who spent $200 apiece? Well it could. By keeping your options few and narrow, are you missing the boat by “shutting the door” to the masses? How much do you spend to acquire those four people?

If we borrow an analogy from the airline industry, it costs the same $10,000 to fly the plane whether it has two people or 250 people on it; the goal is to fill as many seats so that you cover your costs and possibly make a little profit after paying your overhead. So if you are spending $10,000 a month to market to four people, wouldn’t it be better to make sure all the seats on your plane are full? 

Do white lights lead to red lights?

An easy answer we feel on this is to perhaps “throttle” your spend a little so that you do spend a little more money and care and attention to the “targeted” key clientele you want but also spend in the periphery as well to continue to keep the “big tent” open out back. By keeping all options open and using a more targeted approach you stand a much better chance of keeping your plane “full” rather than excluding the discount and coupon shoppers in favor of the more “exclusive” and high-value customers. (And in this economy those “high-value” customer numbers do seem to be greatly reduced from six years ago!)

Segmentation is nothing new, of course but how you slice and dice your CRM budget could be significantly scaled by looking at the kind of customer you want to attract. The extreme POV of the client had half the battle correct in that attracting a key demographic is always the smart route. However, cutting off, excluding and honestly dumping 98% of your database because you only want certain, rare profile, high–end users is akin to trying to fly a plane with corn oil instead of jet fuel; you aren’t going to get very far.

There is no right or wrong way to look at this, really. A sale is a sale and a qualified lead is a qualified lead at the end of the day, but how you net those customers points back to how large or small of a slice you give to attracting the kind of customers you “want” and what is really out there who is interested.

From your view in the cockpit do you pay peanuts for champagne … or pay champagne for peanuts?