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Ogilvy Mather Ogilvy Mather * Ogilvy Interactive Team Customer Relationship Management (CRM) Vladimir M Jordanov December 2nd, 2000 Oglivy Interactive Beijing Boot-camp * Customers? Who are these guys? * What is CRM? In-depth analysis of customer behavior and attributes. Applying of the achieved knowledge in the formulation of marketing campaigns, strategies and treatment plans. More than just a set of technologies – it is a process. * Why CRM? Company existence – quest for profit. Three ways to increase the profitability of the customer base Acquire more customers Optimize the value of the existing customers Retain the right customers longer Acquiring new customer cost 5-10 times more that retaining the existing one Loyal customers will will buy more and are willing to pay premium prices 20/80 rule – 20% of the customers generate 80% of the revenue * Why CRM? (continued) Service leaders enjoy the following advantage over their low-service competitors: They grow twice as fast. They experience a 6% annual growth vs. a 1% share loss (they take customers away from their competitors). They can charge 10% more from their products and still take customers away. They enjoy 12% vs. 1% average return on sales. Industry statistics show that 68% of customers walk away because of poor customer service. * Evolution of CRM Mass Marketing Target Marketing CRM * Mass Marketing Replaced the intimacy of direct sales One way communication Wide geographic distribution Lost is the personal touch with the customer Mass marketing was enabled trough the technological improvements in TV, radio, printed press * Target Marketing Direct mail, telemarketing Receiving customer response Lack of specific data, average response rate Islands of information * CRM Next evolutionary step, back to intimacy Customer loyalty build on: Understanding of customers wants, needs and values Interactivity with the customer in the way customer prefer * CRM Cycle Assess Who are the customers – demographic