CRM Is the Cheapest Form of Marketing

Customer Relations Management (CRM) is an essential component of marketing but many people – even marketers – see it as a separate and non-related entity.

A while back, I shared in my post Why Customer Service is Even More Important these days an unpleasant experience at a well known electronics store. I was a willing customer determined to make 2 electric fan purchases, and no one bothered. There is no use spending good money in marketing, advertising and promotion in the background and to have people in the front line destroy all the goodwill created.

It is frustrating to find that so many companies chose to ignore this. In fact, customer service is the cheapest way to build long term trust and credibility and create repeat businesses among current clients. Customer relations management is indeed a marketing discipline, and should not be seen as an expense or an operational cost. I know I have been quoting Peter Drucker very often but there’s so much truth in:

“Marketing and innovation are the two chief functions of business. You get paid for creating a customer, which is marketing. And you get paid for creating a new dimension of performance, which is innovation. Everything else is a cost center.”

Much of the marketing investment of any marketing campaign are made in:

• creating the message
• pushing these messages to the targeted markets and
• turning prospects into new customers

After a prospect becomes a client, awareness marketing makes much less of an impact on his decision to buy again. The reason being that the client is influenced by other factors. Did the product meet his satisfaction level? Did he find it tedious to drive 1.5 hours just to buy the product? Was he upset at being put on hold for 15 minutes? Did he find the online order form a breeze to use? Loyalty marketing becomes very important for repeat (aka loyal) customers. Yet only a small budget is allocated for loyalty marketing.

Marketers usually spent as much as 80% of marketing dollars on awareness marketing to create visibility and new customer acquisition. If a new customer has a problem with the product and has to spend 45 minutes getting someone to talk to him, do you really think that a creative, or even sexy, campaign can convince him to buy again? A consumer usually will be a one-time sucker only. Who wants to be a fool twice?

Many large multinational companies have outsourced their call centres to foreign lands in view of lower manpower cost. Complaints from their customers – mostly on the difficulty in understanding a different ascent – convinced some of the companies to move their call centres back home. It’s not worth spending good money on marketing and have it washed away with poor customer service. Damage Control and Crisis Management will suck up more time and resources to undo the “bad things” and get back into the customers’ good book again.

There are 2 ways to improve customer service:

Place CRM under the command of the marketing head. He can build CRM into his marketing efforts. Marketing and Customer Service can thus leverage on each other.

Educate and enlighten those who are in Customer Service to see themselves as Brand Embassador and regard them dutifully as so. If you keep referring them as “support”, they will not see themselves as an important component of marketing. We need more than one pillar to create a sturdy bridge.

We all like our marketing efforts to be good, fast and cheap. Start by having a strong customer relations management and you soon realize that it is one of the cheapest forms of marketing.

Read Related Posts:
Why Customer Service is Even More Important these days?
Secret Shopping Service on the Prowl

[tags]cheapest form of marketing, customer service, customer relations management, marketing, advertising [/tags]