Loyalty.com: customer relationship management in the new era of Internet marketing

Abstract

From the Book: We entered the Interactive Age in 1995. That was the year that personal computers outsold TV sets for the first time. The same year, the number of e-mail messages exceeded the number of regular stamped letters. By 1998, the Web was headed inexorably toward normalization, as those hopping onto the Internet for the first time included a growing percentage of people who hadn't been to college. The year 2001 has been designated as the year one in six world citizens will be online, many of them wirelessly. In five years, we will all be spending more waking hours online than offline. When I met Don Peppers in January 1990, we knew that communication was being miniaturized and that technology was giving us newfound powers. Over the next three years, we devoted nearly all of our attention to figuring out what that would mean for business. Our first book, The One to One Future: Building Relationships One Customer at a Time, appeared in 1993, before widespread use of the Web. Back then, we proposed that as the Industrial Age inevitably yielded to the Age of Information and Interactivity, strategies of successful companies would likewise have to change. Thus an enterprise would plan strategies designed to win share of customer rather than market share and to measure its success on retention, customer equity, and returns on data assets rather than just on ROI and market share. Companies would learn to measure each customer's profitability and put customer managers in charge of portfolios of customers. More and more, the enterprise would bring products to customers, not just customers to products. The resulting 1to1 enterprise would engage in a Learning Relationship with individual customersthat worked like this. I know who you are. I remember you. I get you to talk to me. And then, because I know something about you my competitors don't know, I can something for you my competitors can't do-not for any price. This means the customer actually adds the value to what you can for her and will find it easier and less costly to more business with you than to start over somewhere else. You will help her create her own barrier to exit. You will no longer buy her loyaltyyou will sell it to her. In working with blue-chip clients worldwide, we have learned a great deal about the strategies an enterprise will follow in progressing toward 1 to 1 The first requirement is to identify customers-to tag them so that each one can be identified through any channel, across transactions and interactions over time. Once an individual customer can be seen as one complete customer across the enterprise, the enterprise can differentiate customers by both the different values that customers have to the firm and the unique needs that each valuable customer has from the firm. To learn enough to differentiate customers, the enterprise will interact with customers and keep track of these individual dialogs, learning a bit more with every interaction, at every touchpoint. Finally, the enterprise will embark upon the hardest strategy: customization, or treating different customers differently, often by automating the personalization process in a way that increases customer loyalty even as it almost inevitably reduces the cost of operations. These steps are tough. Those companies that can achieve the first three-identify, differentiate, and interact-can claim to have achieved CRM and database marketing. The enterprises that go one step further, which learn to use feedback from each customer to customize for each one individually, will be engaged in active ltol Learning Relationships. Six short years and three books later, now everybody wants to do CRM. Consulting companies, software enablers, client businesses, large and small, public and private, business to consumer and business to business-all want to get under the CRM umbrella. The irony is that Customer Relationship Management is often none of those three: Often it's not about the customer; it's about the sales force. It's not about relationships; it's about data mining. And it's not about management; it's promotion marketing. Fred. Newell, in his first book, The New Rules of Marketing (1997), began the process of offering practical advice to companies trying to make the transition to CRM and 1 to 1. Here he continues, in even more depth, by offering real help that turns data into strategies, and customers into equity. Most managers and companies have heard the wakeup call, and they believe that customer centricity is the key to success in the future. The hard part now is becoming fluent in alternative thinking, strategies, and tactics-breaking away from the responses and policies that our parents and grandparents taught us for the past 100 years. Fred. Newell, in his practical style, tells you how in simple, straightforward language and then punches the point with one realworld case study after another. I can already envision many readers using the case studies to make the argument for funding their Ito l pilot programs and CRM initiatives. The new chief relationship officers, customer portfolio managers, CRM consultants, business-oriented IT and CIO leadersand ltol pioneers-are dedicated to turning customers in valuable assets. The question now is how to get CRM done. This book will tell you how.

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