We live in a business environment where almost everything can be measured, so there’s no excuse for throwing money away without making an analysis of whether or not your spending is effective. Of course, some things remain intangible – how do you measure reputation? – but you shouldn’t be spending on CRM (customer relationship management) without knowing if something is coming back to you on the bottom line.
CRM is all about increasing the value of your marketing efforts. Treating customers better should make them more receptive to marketing message and knowing how your customers behave will help you target your marketing spending more effectively.
Marketing ROI and Customer value
Because CRM can track customer interactions all the way through from prospect to customer it should be possible to measure with a great degree of accuracy how well your marketing spending is working. Your CRM system should allow you to monitor each marketing campaign so that, for example, a particular email shot will be attached as a label to the customer record of each client it attracts and at the end of the process you should know how much each customer spent with you. You should end up with a simple equation – we spent £x on this campaign and generated £y revenue as a result.
Sounds simple. However, it’s quite a complex process that will add extra tasks to everything your marketing and sales teams do. You need them to buy into this if it’s going to work. You also need your teams to talk to each other and cooperate on a task in which they will not necessarily see an end result.
You also need to be prepared to make the best use of the information you’ve gathered and the, usually automatic, analysis. Unread reports are useless.
Where to start?
Of course, you’ll need an effective CRM system that provides all these features and you’ll need to know how to use it – perhaps you need training or consultancy help. And, social media is a whole new(ish) area which is making both CRM and marketing people scratch their heads when it comes to quantifying the return on each Facebook update or Tweet.
Marketing is about how people feel about your company so measuring every aspect of it will never be possible, what about the customer who likes an email you sent them but approaches you throw a different channel? However, CRM can put figures to much of this seemingly intangible work and not to take advantage of this analysis is a waste.