• by Tom Hespos , July 30, 2002

How many times has this exchange taken place in your agency?

New Client: I'd like the agency to spend the majority of our online budget in acquisition advertising.

Agency: Sure, but let's talk about retention. How big is your house file?

New Client: Pretty big. About 100,000 names.

Agency: And how often do you mail updates to those people?

New Client: Well...we tried testing something about 6 months ago, but we really haven't done much with it...

Agency: Hmm...

Folks, I can honestly say I've had this conversation at least two dozen times in the past couple of years. And I'm starting to get tired of having it.

Customer acquisition is one of the major building blocks for a business, but it's not the only one. Advertisers spend most of their money advertising to potential new customers, but what they fail to realize is that customer acquisition comprises most of the battle. Once a customer is acquired, it is up to the marketer to develop that customer – to upsell, cross-sell and promote more frequent and deeper interaction.

If enough existing customers raise their hands and tell a marketer that they want to receive updates, special offers and the like, the marketer should always fulfill that promise. The opportunity lies not only in uncovering opportunities to do more business with existing customers on a more frequent basis, but also in the ability to use CRM tools to learn more about those customers – to learn about their shopping habits, intent to purchase, lifestyles and interests, to name a few important attributes.

A good CRM program will teach the marketer more about their customers every day. It also feeds back into acquisition-based advertising by helping the marketer to prioritize targets according to their level of interaction. With a database that stores customer data and feedback, a marketer should spend plenty of time carving up data and looking for correlations with desired behavior. A good agency should be able to suggest to a client different ways to refine the overall marketing campaign by offering insights like, "Customers who indicate an interest in outdoor sports spend 30 percent more on our e-commerce site than the average consumer." And acquisition campaigns should be adjusted on the fly to leverage these insights.

Several companies offer turnkey solutions for eCRM. Typically, their offering consists of a database that works in tandem with an e-mail deployment platform. Information gleaned from interaction with the website and emails, data collected from online surveys, purchase behavior and other data points can be dumped directly into this database. A querying tool allows marketers to look at the data through filters and to carve the database up in pretty much any way that strikes their fancy. A web interface that allows for queries based on Boolean logic makes viewing the data in different ways easy. A query like "display the e-mail addresses of my customers who are in the top spending quintile and who haven't bought anything in the past 30 days" is often simple using one of these systems.

For an e-commerce marketer, such a system should indulge fantasies of drilling down into the data and finding pockets of customers with whom potential exists for increased spending. As a marketer learns more about the customer by soliciting feedback, either through incentivized online surveys or simple observation of behavior, more data points become available and more complex segmentation becomes possible.

Why, then, do so many marketers fail to give eCRM its fair shake? Considering the opportunity for incremental revenue and the ease of use of many CRM platforms, I'm baffled.

To make the adoption of a CRM initiative as painless as possible, marketers should select a CRM partner early on. And they should also be sure that any sources of valuable data are integrated into the CRM solution from the beginning. Preferably, interaction data should be updated within the database in real time or near-real time.

The opportunity here is vast, folks. If you're not doing anything to learn from your existing online customer base, it's time to look into it.