Over the last few years, there has been a lot of buzz about CRM or Customer Relationship Management. Large, sophisticated marketers have spent millions of dollars to automate processes that help them to focus marketing efforts on customers. Many of the same techniques can be implemented by any organization that has a customer database.
To be useful for marketing, a database must have more than just customer names and addresses. It must include sales data such as dates of purchase, dollar amounts of purchases, types of products/services sold, etc. More sophisticated databases track profitability of customers, dates of promotions and types of offers responded to.
By having a rich store of data about customers, an organization can identify, segment and target their promotions to customers based on their business objectives. Because an organization’s objectives may be different at different times, the definition of “Best Customers” changes with it. A rich customer database enables an organization to focus on segments of opportunity, no matter what the objective. These could include
*Most profitable customers
*Most growable customers
*Seasonal customers
*Promotionally responsive customers
*Cross-selling opportunities
*Upselling opportunities.
Even customers that have not purchased for six months or a year are more likely to purchase than prospects. However, it’s just important to identify the most costly customers. These customers, often the lower 10% to 20% of customers, may never be profitable and should suppressed from active solicitation.
None of these segmentation techniques require an expensive CRM system. All of these segmentation ideas can help any business create more efficient promotions, boosting both response and review. To implement them, an organization needs nothing more than a marketing database and some careful thought.
Ron Jacobs is president of Jacobs & Clevenger, an ad agency specializing in direct, database and digital marketing. He is also co-author of Successful Direct Marketing Methods, the best selling book on the tools and techniques of direct marketing.
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