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Agrimarketing : November December 2006
November/December 2006 AgriMarketing 45 It has been estimated that over half of all customer relationship mar- keting (CRM) initiatives are aban- doned within the first three years of implementation. Yet we have all heard of companies that embraced CRM strategies years ago that are still going strong today. Why have some organizations been successful when others have not? Call it what you will --- CRM, rela- tionship marketing, database market- ing ... whatever --- there are three basic things you need to develop cus- tomer-focused, results-driven sales and marketing programs: (1) data about your customers and prospects (2) a system for managing and access- ing that data, and --- most important of all, (3) a clear and consistent vision of what you want your customer rela- tionship program to accomplish. Data: A problem plaguing many organizations isn't that they don't have enough data, it's that they have too much! And most of what they have isn't worth a whole lot. With all the consolidation and change taking place in agriculture, data collected as recently as a couple of years ago may be out of date. So if you are embark- ing on a new direct or relationship- marketing initiative, the first thing you need to do is discard every bit of data that isn't immediately action- able. It will make the rest of your task a lot easier. What's actionable data? Some bit of information or insight about a cus- tomer or prospect that will ultimately lead you to a measurable result --- preferably a sale. Actionable data varies by organization, but it is more than just a mailing list containing names and addresses. If you are an equipment manufacturer or dealer, old warranty information is almost always a great source of leads for future up- selling or cross-selling programs. If you sell feed, seed, or chemicals, knowing how many head of livestock or acres someone has is a great starting point. Keep in mind that customer data, even product purchase informa- tion, that is more than two to three years old, probably requires scrutiny. While you are sorting through your data to determine what to save, what to toss, and what to maintain, be sure to consider all the possible sources and users of customer data within your organization. Account- ing, credit, sales and marketing are all repositories for customer infor- mation --- and each group will likely want some say in how "their" data is handled. By taking a customer-cen- tric approach and asking yourselves what information a customer would expect you to know about them, regardless of which department they called, you can avoid potential issues with departmental "Data Silos" down the road. Systems: After you have your basic data set compiled, or have at least defined what customer intelligence you would like to have, you need to determine the best system to keep that data up-to-date and accessible to the people who need it. Here is where a lot of CRM initiatives derail ... because many folks mea- sure how good their system is with the number of records the computer contains or the amount of time or money spent on programming and development. Wrong. Ultimately, the decision of what system to use to store and maintain your data should be driven by how you intend to access it, and by whom. Determine how the data in the system will be refreshed, and how frequently that will occur. Gen- erally speaking, the bigger the com- pany, the more complex (and costly) your system requirements will be. However, there is a growing number of large sales and marketing organi- zations that have abandoned seven- figure, enterprise-level CRM systems in favor of newer, more agile PC or Web-based applications. These days, Internet usage is pretty common, and access to infor- mation at various levels (national, regional, or local) can be easily man- aged through user passwords. Another advantage of this kind of system is that administrators and managers can usually track who is using the system, how often, and for what purpose. Vision: This should really be your starting point. If your organization is unable to come up with a concise description of the goals and expecta- tions associated with your relation- ship marketing program, forget about data and systems until you can. Because unless everybody is on the same page and shares a common vision, you are probably just wasting time and money. Relationship marketing is much more than just compiling a mailing list and some data points and seg- menting it into different groups. It represents a commitment to main- taining consistent, two-way commu- nication with your current and prospective customers in order to gain a deeper understanding of their needs and wants. This is hardly a new concept, but what is new is that best practices have evolved and information systems have become much more affordable and accessible. All that is missing are customers or prospects who want to have a relationship with you. AM DIRECT/RELATIONSHIP MARKETING UPDATE RELATIONSHIP MARKETING: GETTING BACK TO THE BASICS by Jed Lafferty Jed Lafferty (JELafferty@ comcast.net) is an agri-business consultant with a particular emphasis on data- driven marketing strategies.