Customer retention is key to growing and sustaining a business. The old marketing adage being that it costs 5 times more to generate a sale from a new customer than it does to generate a sale from
an existing customer.
In their study across different industries, Reichheld and Sasser Jr. (1990) found that even a small improvement of 5% in the customer retention rate boosted profits from 25% upto 85%.
Contacting the right customer with the right offer, through the right channel at the right time is one of the benefits that a CRM solution can bring to a business as recognised by Buttle(2009), Swift
(2000) and many others. Little acknowledgment is given to the 'right time' component of this statement. The assumption seems to be that all CRM solutions operate in real-time and are fully
integrated, however, the reality is that many The old marketing adage being that it costs 5 times more to generate a sale from a new customer than it does to generate a sale from an existing
customer. CRM solutions still operate in a batch mode with limited integration.
We believe that the best CRM approach, is the one that looks to create a conversation with the customer, knowing their usage and behaviour. For us the modeling and campaign management functions
enable the organisation to make a decision about what to offer to the customer next. This is the Speed of Decision.
However, simply identifying what to offer the customer next , is not the end of the process. The decision has to be communicated to the customer and if there are data latencies that exist in
this process, then by the time the customer receives the marketing communication, the communication may not be relevant to the customer.
When there is a problem with the Speed of Communication, the effects on company profitabilty can be huge, because potentially:
- The business is giving away revenue when it does not need to.
- The business is losing customers, because of a lack of timely communications.
- The business is incurring costs when it does not need to.
- The customer feels alienated by incoherent communications.
Considering the reliance on batch CRM solutions to communicate campaigns to the customer, it is remarkable how little attention is given to the speed at which an organization can communicate to a
customer after a customer event/non-event. There is a lot of focus on the time to market, but this tends to be focussed on how quickly a new product can be brought to market or how quickly a new
campaign can be created from the initial briefing stage. These metrics have very little relevance to the customer, they are simply an internal measurement of how effective the business is at creating
a product or a campaign. Increasingly, successful organisations monitor the latency between the time of the customer event/non-event that forms part of the campaign targeting and the time the
customer receives the campaign. Our Speed of Communication construct improves response rates to your marketing comunications and helps to improve customer experience. email: firstname.lastname@example.org for more details.