What Customer Relationship? Do Short-Term Tactics Preclude Long-Term Profitability
According to Scott Hornstein, international author, lecturer and consultant, the rubric of “customer relationship management” offers two promises. The first is to enable marketers to find those that are ready to buy right now and close the sale as quickly and efficiently as possible. The second is to create a repurchase preference among existing customers.
Scott observes, “Marketing strategy and investment is solidly behind promise number one. Should we pick the low hanging fruit? Absolutely. If we don’t, someone else will.
“It also seems that most companies have yet to warm up to promise number two. Do companies bombard their customers with ongoing repurchase solicitations? Absolutely. Are these finely targeted? Not usually. Look in your mailbox — are companies targeting you or trolling?
“Instead of a commitment to the individual, companies turn the numbers. Why should we pay attention to one customer when we can broadcast to MILLIONS? Why else would we be satisfied when less than 1% of our universe buys, and 99% throws us in the trash. A popular phrase is, send it to everyone — just one more sale will pay for everything. Such shortsightedness generates customer displeasure, which is a precursor to disgust — counter-productive to the creation of repurchase preference.
Scott adds, “When a customer purchases your product or service, they go away for a while. They use your stuff and it satisfies them or it does not. Perhaps they have a question or a problem. I call this interim period ‘change’. Many companies call this interim period ‘annoying’. In fact, some companies banish their existing customers to the other side of the world.”
That’s where these companies are missing the boat. They’ve paid to acquire the relationship, but they’re not amortizing the investment. Many companies are obsessed with the short-term to the detriment of the long-term. What we sold today is the only thing that counts. So we manufacture drive-by relationships, over and over again.
Customers seem to like the second promise of customer relationship management — that a company would value their business and invest in a “relationship.” They are vocal in their displeasure when the promise is hollow. They are loyal — and more profitable — when the promise is kept.
- Siebel Systems: CEO Steps Down Michael Lawrie stepped down today from his position as CEO of Siebel Systems. Lawrie had been hired as CEO less than a year ago. His resignation occurred after the company's recent release of disappointingly low first-quarter results. Long-time Siebel board member George Shaheen replaces Lawrie as CEO. Shaheen, former CEO
- Ten Things the On-Demand CRM Vendors Don’t Want You to Know FrontRange Solutions - Press Release DUBLIN, Calif.--(BUSINESS WIRE)--Though many companies are jumping on the on-demand CRM bandwagon – attracted by the benefits of tighter control of data and costs – many are also jumping off. A recent article titled “Ten Things the On-Demand CRM Vendors Don’t Want You to Know” examines
- Customer Relationship Management: 62% More Expensive to Attain a New Patient than to Retain an Existing One Cutting Edge Information Press Release According to a new report by pharmaceutical business intelligence leader Cutting Edge Information, it costs a pharmaceutical company, on average, 62% more to attain a new patient than to retain an existing one (http://www.PharmaIndustryCRM.com). Cutting Edge Information's report "Pharmaceutical Customer Relationship Management," shows
- More CRM Awards in the News SPSS Inc. Frost & Sullivan, as revealed in its recent analysis, North American CRM Analytics Markets, has selected SPSS, Inc. as the recipient of the 2005 Product Innovation Award for its pioneering role in predictive customer relationship management (CRM) analytics. ... "The scope of predictive analytics is broadening as enterprises seek to
- Pharmaceutical CRM Draws on Seven Key Factors Cutting Edge Information Press Release Pharmaceutical companies, struggling to forge meaningful relationships with patient and physician audiences, look to customer relationship management (CRM) to get the job done. Establishing one-on-one relationships with key customers is a goal for most companies. In the pharmaceutical sector, however, government regulations and public