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How Integrated is Your CRM Strategy? Fragmented markets, diverse customer needs, and eroding brand loyalty are forcing companies to change the way they identify, attract, and retain customers. For those that know how to integrate marketing, sales, and service contacts, the rewards are stronger, more profitable customer relationships. By Joel Book M arketing, as we know it, is undergoing a dramatic revolution. The days of one-size-fits-all mass marketing are fast disappearing, and in its place, organizations are implementing one-to-one Customer Relationship Management (CRM) solutions to personalize and strengthen the company’s relationship with customers. To ensure CRM success, smart companies are replacing product-centric marketing efforts with Integrated Marketing, a customer-focused startegy for integrating communications, sales force and customer service contacts. Integrated marketing is an information-driven and technology-enabled approach that utilizes multiple direct communications channels including direct mail, e-mail, sales force and the Internet in combination with multiple indirect channels including media advertising, marketing events, in-pack inserts, and point-of-sale promotions to optimize customer interaction. This process enables organizations to stay connected with the customer through each stage of the Customer Relationship Management life cycle -- from initial product awareness and evaluation, to first purchase, repeat purchase, and finally, loyalty. Integrated Marketing Managing and Optimizing Customer Relationships by Leveraging Every Point of Contact Customer Needs and Value Highly Differentiated Personal Contact TeleSales/Call Center Direct Mail / Catalog Customer Retention/ Sales Expansion Retail POS Promotion Lead Generation/ Customer Acquisition Not Differentiated “Personalized” Web Site E-mail / E-Newsletter Not Differentiated Direct Response Advertising Marketing Event “Public” Web Site Public Relations Not Customized Marketing and Sales Contacts Highly EXECBREF.PPT Customized How Integrated Marketing Works Integrated marketing utilizes a well-coordinated combination of direct and indirect channels to communicate with current and prospective customers. Indirect communications channels such as media advertising, retail promotions and trade shows are used to produce inquiries and generate sales leads, while direct communications channels such as direct mail, electronic newsletters, and field sales contacts are used to develop sales and maintain customer dialogue. By tightly integrating marketing and sales contacts, companies are able to achieve double-digit response rates, increase sales revenue, and maximize marketing ROI. © 1999 by Joel E. Book 1 Integrated Marketing for CRM The backbone of an effective integrated one-to-one strategy is a closed-loop marketing process which is engineered to ensure that the right message or offer, is presented to the right customer, delivered through the right channel, and communicated at the right time. Closed-Loop Marketing Process Customer Information Relationship Analytics Create Programs Channels Direct Mail E-Mail/ Newsletter Implement Programs Develop Strategy Relationship Marketing Business Rules Media Advertising Web Site Call Center Identify Opportunities Measure Results Customer Service Center Point of Sale Marketing Event Enabling this process is enterprise marketing automation (EMA) technology. Data Mining technology is used to identify customers who represent cross-sell and up-sell opportunities and Campaign Management technology is used to plan, implement, manage and measure marketing campaigns that manage customer interaction through multiple points of contact. The fuel that drives one-to-one marketing is business intelligence. Customer Analytics provide the insight and intelligence necessary to customize messages, product offers, and service according to individual customer needs. And CRM Business Rules provide the business logic and guidelines to personalize message "treatments." These rules define how communications, sales contacts, and customer service will be differentiated based on the customer’s needs, purchase behavior, product usage practices, and relationship life cycle stage. The ultimate goal of Integrated Marketing is to optimize the performance of the company’s customer portfolio. This requires astute management of the customer interaction process in a manner that reinforces the customer’s relationship with the company, generates repeat purchases, and maximizes “share of customer” by expanding product and service usage. Building an Integrated Infrastructure for CRM An organization's Customer Relationship Management strategy will only be as successful as the infrastructure that supports it. Unfortunately, this is an area where many companies fail to devote sufficient time and resources for needs assessment and strategic planning. © 1999 by Joel E. Book 2 Integrated Marketing for CRM Building an integrated infrastructure to support CRM requires proper alignment of the CRM Strategy with the Business Processes, Organizational Structure, and Marketing Technology that enable its implementation and management. Customer Relationship Management Integrated Infrastructure Strategy Customer Interaction Plan Customer Intelligence Plan Technology Architecture Plan Systems Integration Plan Strategy Implementation Plan Organization Product Marketing Managers Channel Managers Field Sales/Telesales Customer Service & Support External Service Firms Integrated Infrastructure Technology Marketing Database Data Mining (Predictive Modeling) Campaign Management Sales Force and Call Center Query and Reporting Processes Communications Planning Campaign Management Sales Development Channel Management Customer Service & Support Integrated Marketing Direct Channels Direct Mail E-Newsletter Field Sales Indirect Channels Advertising TeleSales Retail Marketing Event Web Site Planning and building an integrated infrastructure for Customer Relationship Management strategy begins by understanding individual customer needs, and defining how, through an integrated marketing approach, the company can increase revenues, maximize profits, and build lasting customer relationships. If your company is planning to put a Customer Relationship Management strategy in place, consider the following recommendations as you assess your needs and formulate your approach. 1. Define your Customer Relationship Management strategy and objectives. Link the CRM strategy to the organization's business objectives. Create a "CRM Blueprint" for developing and executing the strategy. 2. Establish CRM Communications Business Rules that serve as guidelines for planning and managing customer interaction based on customer intelligence. 3. Create a Customer Analytics Framework that supports customized communications, sales and service contacts based customer demographics, predicted product/service purchase, customer value, and life cycle stage. 4. Develop a "closed-loop" Marketing Communications Process for planning, executing, and measuring marketing communications programs. 5. Establish a CRM Support Center to provide enterprise-wide support for marketing program planning, execution, and measurement. Staff this group with people experienced in customer-focused marketing. © 1999 by Joel E. Book 3 Integrated Marketing for CRM 6. Integrate data on current and prospective customers in a central marketing database. Eliminate the usage of multiple customer databases used to support communications, sales, and customer service. 7. Develop an enterprise customer data acquisition strategy for developing and maintaining customer intelligence. Implement an annual Customer Profile Review to verify and update customer needs. 8. Employ the use of campaign management technology to automate the planning, management and measurement of integrated marketing programs. 9. Develop metrics for measurement and analysis of marketing program performance. Use these "key performance indicators" to monitor program results and refine marketing strategy. 10. Implement customer management and sales force automation technology to support enterprise-wide customer information access and integrate marketing, sales, and customer service processes. Integrated Marketing Works to Optimize Customer Relationships “The ground rules for marketing have definitely changed. No longer is it market share, or return on sales and assets. The goal now is not just selling the product, but owning the customer relationship.” Rick Kean, CBC, Executive Director Business Marketing Association Having the best products or service is no longer a guarantee for success. That's why progressive companies are finding integrating marketing is an effective strategy for finding, growing and keeping customers. Integrated marketing works because it ties together the entire lead generation, sales development and Customer Relationship Management process. It enables a company to establish and maintain a direct relationship with current and prospective customers by identifying their needs and using this information to deliver information and product offers that are customized and relevant. By following this approach, companies are maximizing revenue and increasing profits by turning prospects into customers and turning customers into advocates. About the Author: Joel Book is Director of the Integrated Marketing practice for DiaLogos, Inc., a Boston-based management consulting firm. He helps organizations plan, implement and manage information-based and technologyenabled strategies that optimize marketing effectiveness, accelerate business growth and strengthen customer relationships. This article appeared in the July 1999 issue of Boston Business Journal. Contact Information: Joel Book Director, Integrated Marketing Practice DiaLogos, Inc. 401 North Wabash Avenue, Suite 620 Chicago, IL 60611-5642 [email protected] 312.470.2532 (Tel) 312.645.0317 (Fax) © 1999 by Joel E. Book 4 Integrated Marketing for CRM