RELATIONSHIP MARKETING without CRM

Circulation Management, June 1, 2003

Byline: THOMAS S. KRAEMER

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) systems are tremendous strategic marketing tools that manage campaigns via every touch point: Web, email, telephone, direct mail and face-to-face sales. As I've written in CM's pages before (see November 2002, page 46), the main purpose of an automated CRM system is to integrate customer records from all business-to-business publisher product segments - magazine subscribers, event attendees, Web site registrants, email newsletter subscribers - and inform circulators if a magazine subscriber is a Web visitor, went to a company trade show, has a budget for purchasing particular products or services, and responds well to email. The system then interacts with that customer, generating customized marketing messages based on his or her characteristics and buying behavior.

While there are only a handful of publishing companies with deep enough pockets to adopt a full-scale CRM system, publishers of all sizes and economies of scale can benefit from CRM technology no matter what their budgets. With senior management's blessing, they can build cost-effective, consolidated customer files that yield similar results through manual intervention and data manipulation.

CHANGING PERSPECTIVES

Underlying CRM is a relationship-marketing philosophy that recognizes that each marketing campaign is part of an ongoing customer dialog. Promotions don't happen in a vacuum: Magazine issues are received, Web pages visited and sister products purchased. Since everything a company does can influence - or dissuade - a customer from making a purchase, CRM systems identify patterns of customer behavior around all promotional activity. And they cluster customers by their communications' preferences so that campaigns can be generated based on those preferences.

Before the development of any relationship-marketing program can begin, circulators must change the way they think about circulation. What does this mean? Instead of thinking about masses of subscribers responding to promotions, they should think about one subscriber's response to a single promotion. This change from mass to individual is an important aspect of relationship marketing - often called one-to-one marketing. Every interaction has the potential to be different based on factors associated with the customer, available company products and company goals at a specific point in time. Real-time marketing is another term often associated with relationship marketing, because offers are generated at the time the customer interacts with a company product.

EVERY CUSTOMER IN ONE PLACE

CRM systems allow for such targeted marketing because they integrate all publisher records into an overall customer base. Circulators are able to examine that base over time, noting customer purchase trends. A CRM system doesn't replace traditional fulfillment, customer service or email newsletter distribution systems, or perform each one's specialized functions, however. Rather, it pulls data from them, homogenizes that data and links customer activity to identify target customers, select and tag customers for promotion, track response and analyze results.

The front end of this consolidation is simply a merge/purge process. And that's where circulators without CRM systems can start. A consolidated customer file may be accessible through a publisher's fulfillment interface. A merge/purge or fulfillment house can often pull customer data together for publishers, as many now offer advanced relationship-marketing support in addition to their core business services. It makes sense for such vendors to become information hubs, since they generally support 75-to-85 percent of publishers' circulation files. Service bureaus have the technology in place and are experts at combining data from different sources to build consolidated files, so the cost to do so will be much less than that of customized CRM systems. Alternatively, publishers may choose to maintain a consolidated file in-house, at a much higher cost, in terms of man-hours and dollars.

Keep in mind that consolidated files will not offer all the bells and whistles of a dedicated CRM system - such as real-time capabilities, automatic learning and quick response to customer activity. And unlike CRM systems, which are updated with customer information automatically, consolidated files must be updated manually on a regular basis. The advantage to the manual approach is the lower pricetag. And for many circulators in this weakened economic environment, the extra elbow grease may be worth it.

Let's look at some CRM system building blocks and see how their capabilities can be replicated using a consolidated customer file.

BUILDING CRM FUNCTIONALITY INTO A CONSOLIDATED CUSTOMER FILE

* Tagging

Often, publishers' brand extensions fragment because their source systems are functional. For example, event attendees are captured and retained in an event management system or in a registration-management subcontractor's server, while subscribers to a publication are maintained separately at a fulfillment bureau. Even though the products are part of the same brand and may be heavily cross-promoted, this functional separation fragments customer knowledge within the brand. CRM systems bring all customer information together and automatically establish tags - one-byte flags or short codes that represent specific characteristics - to help identify groups of like-minded customers and track their responses to different campaigns.