Although views of Customer Relationship Management have evolved over the years, there was great insight and logic in what some of the early visionaries of this practice preached. One such set of
experts wrote a white paper for Gartner in 2003 in which they coined the enduring concept of "Five Value States" for Enterprise CRM. ("Management Update: The Evolution of Customer Relationship
Marketing"-- G. Herschel, J. Radcliffe, K. Collins; Gartner, Inc., December 2003)
The core elements of this piece still provide a viable framework for e-marketers, although I believe that
most e-marketers don't connect with all its elements. That's because in a perfect world the Web, online advertising and e-mail would all be aligned. But more often than not, these channels are
fragmented, with each pursued separately from the others. E-mail in particular tends to be considered only as an afterthought, rather than as a core integrated element of the holistic program.
According to the Gartner white paper, the Five Value States of CRM are:
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Identifying the Right Customer
Using the Right Channel
Choosing the Right Time
Making the Right Offer
Building the Right Relationship
Most companies will profess to understand
their customer; some will say they understand channel dynamics; some have keen insight into market timing, lifecycle or cyclical considerations; and many are aggressive in offer strategies. Assuming
you have all these elements in place, the million-dollar question is: what type of relationship is optimal for both the business and customer?
I was perusing books in a store when I came
across a comment about customer loyalty and the myths associated with it. One myth that stood out was that the longer you have a customer, the better the lifetime value of that customer. Perhaps in
the automotive business this would make sense, but not necessarily for most industries. The challenge we face as marketers is to define this "right customer" and choose which channel we can use to
build a relationship with this consumer. Some customers will respond to e-mail, some offline, some will need to have a mixed experience. If you can find this "right customer" and find the "right
channel" mix to foster this relationship, you are on the right path. But if you are of the opinion that the longer you keep customers in your database, the more value they will have, you may be
setting yourself up for failure.
At a recent OMMA conference, Andy Goldstein, director of e-mail for Ogilvy, said that the e-mail channel "is the line." In other words, e-mail is the
conduit to foster the relationship between above the line and below the line activities. That's an interesting concept, and certainly a goal of many programs. Yet I compare this "line" to the line in
understanding which customers are ripe for fostering relationships through electronic channels, and which need a cross-channel relationship. This "line" can also represent optimization. But developing
and identifying this "right relationship" is still an elusive thing to nail down. How do you measure what is right?
We must balance what we know of our customer + the channels we can use
to engage them + the interpretation of the feedback we get (direct/indirect). The derivative is your relationship strategy. I've often spoken about permission management in the e-mail channel,
subscription management, profile management and the value exchange that must exist in e-mail programs. The reality is that your customers will inherently choose the channel in which they will engage
with your brand/product/service. We, as marketers, are tasked with creating the programs to support and measure these behavioral changes over time.
As I said to one client recently as we
discussed the issues with their database (of nine million e-mail addresses), "If you try to solve your database problem in terms of nine million people, you'll never get to the 10 to 20 percent that
mean the most to you."