Earlier today I came across this post on Performix Integrated Marketing in which they highlight a recent article that Michelle Eggers of SAS Institute wrote about the importance of implementing marketing metrics and Customer Lifetime Value in your business.
Here’s a brief summary of the article as described by Performix:
- Look at the processes your marketing department is using. Are they ahead or behind schedule on jobs? Efficient, or chaotic? Keep a grasp on the people part of the process to be able to increase productivity.
- Distinguish between measuring campaign performance (e.g.. how the cross-sell campaign did online in the last 3 months) and look at the OVERALL effectiveness of all marketing programs, direct and traditional or broadcast media. You need to have the data on how all are performing in order to develop the right media mix.
- Develop and focus on broader business metrics that are not specific to any marketing program, like: sales growth, market share, total sales and total profits, Are they aligned? How do they interact?
- Look at the customer: except for managing marketing processes, all of the above relate to the customer. Are they affecting the customer positively or negatively? Create customer metrics, for things like: products (owned) per customer, customer profitability, customer satisfaction, net-adds, and customer lifetime valiue.
Does your business fully understand CLV?
William Brand recently posted six ways for you to derive value from your CRM in the coming year, even with the current state of the economy.
1) Emergence of the social customer
2) The imperative that CRM strategies deliver business value
3) The requirement to fully cost justify CRM investments
4) The necessity to reduce risk of CRM initiatives
5) The need to get more value from customer information
6) The battle to redefine vendor pricing and licensing agreements
In this news report, they discuss the merits of CRM. Since the conception of CRM systems, much has changed. In 1997, 39% of contact centers said they “had a single view of the customer” with 45% planning to follow their lead within 2 years. By 2007 this number had dropped to 34%. As Stephen Loring, a business development manager for customer interactive solutions stated:
“The rise of the Internet, and the use of different channels such as IVR and Web self-service has disrupted the unified 360 degree view of customers in CRM. At the same time the payback period for CRM installations is too long for many of today’s business managers.”
This has lead people to question the usefulness of CRM. In response Pete Marston, a Forrester Research Analyst had this to say:
“If you have customers won over you need to maintain those relationships, on the marketing side you need to get people interested in your product or service by understanding their buying behavior is, and then on the sales side you understand what the customers’ needs are. The various CRM tools help you carry out these functions.”
What is your take on this debate?