Differentiate

Differentiate

Differentiate is the second stage in creating a relationship marketing and management strategy. Differentiate: “To recognize the differences between different characters in different varieties of the same species.”

Differentiation begins by segmenting customers across two important dimensions: customer value and customer need.

Customer value is related to the future profit a customer will generate and customer need is the set of unique needs that each customer is looking to fill.

Customer Acquisition - Step 3

Customer acquisition is step three in the process of creating a customer file. A marketer begins by defining the types of data that will be required to properly and consistently identify customers and evaluates each potential customer touch point as a channel for collecting customer data.

In order to collect valuable customer data, an enterprise must “give to get.” This involves creating offers with a value equal to the value of the personal information. Examples of typical offers include sweepstakes, preview sales before retail merchandise is open to the general public, or Economy Plus seats with an extra five inches of legroom.

Once existing customer data is audited, a data model is designed, and a customer data acquisition program is implemented, it’s important to look for ways to integrate customer data across the enterprise. This involves linking across customer touch points and integrating with legacy data sources such as purchase history and service calls.

Develop the Data Model - Step 2

The second step in creating the CIF is to develop a data model. This process begins with determining a single data point that can be used as a Unique ID. It is very easy for a customer database to become filled with duplicate or confusing records if there isn’t a clear method for linking a unique, stable identifier to each unique customer record. This could be an existing customer identifier, such as a social security number or license number, or it could be a uniquely-generated enterprise ID.

The data model will contain both stable data (gender, birth date) and adaptive data (dependents, purchase history, attitudes), and will include business rules for integration across enterprise, how data is validated to be true and data conflicts resolved, and security issues.

Create a Customer Information File - Step 1

The first step in creating a Customer Information File (CIF) is to do an audit of your existing customer data files. You may have an existing customer database or record of transactions, or the information may be scattered among several Excel files. Some sales organizations have found that their best customer data is on 3x5 cards stashed in their sales reps’ automobile trunks!

The audit should involve a review of missing data, recency of information, and purchase data and its link to unique customer information. Third-party lists can be used to append customer lists to fill in for missing data.

Identify

Identify is the first stage in creating a relationship marketing and management strategy. “Identify: To establish the identity of someone or something; to recognize.”


The goal of Identification is to begin to build relationships with individual customers. The true test of Identification is the ability to recognize individuals when they return. If you can’t recognize them when they return, you’re engaged in transactions, not building relationships. A good illustration of the difference between transactions and relationships is my experience with Radio Shack

Years ago, Radio Shack started an initiative to capture customer names, presumably to build a marketing database. Every time I shopped at a Radio Shack, a salesperson would ask for my complete personal information, including name, address, and phone number. Even if I was buying a $2 battery, I was forced to give this information. Every time. Finally, I decided enough was enough. They had my information already, and if they had no process for recognizing me on my return, they didn’t deserve my cooperation anymore. From that point on I refused to surrender personal information, and it resulted in several uncomfortable confrontations with overly enthusiastic salespeople. It was not a good way to create strong customer relationships.

At the core of this effort to Identify is the development of a customer database, or Customer Information File, with the ability to record key demographic and transactional information and capture attitudinal and behavior insight. We’ll talk about that next time…

Customer Relationship Management is a business buzz word that seems to have lost all of its original meaning. These days, CRM is shorthand for Siebel software, salesforce.com sales automation, and increased call center productivity. It seems to have lost its focus on the customer and the relationship. Instead it's all about Management.

It's time to put Relationship and Marketing back front and center. It's time for Relationship Marketing and Management.

Relationship Marketing and Management incorporates both the philosophy and the discipline of creating meaningful dialogue with customers in order to serve them better. Relationships are created out of two-way conversations in which there is a balance between talking and listening. And when business takes the time to listen to their customers, they gain remarkable insights that can influence products, services, even business design.

We'll explore some of these concepts and discuss practice ideas for putting RMM into practice. I welcome your feedback.

-do