Customer Marketing / CRM ROI Testing
Yes, it's true. You can test your business and customer base
for responsiveness to Database Marketing or Analytical CRM-driven
techniques - and you don't need a data warehouse to do
it. Doing a test before diving into database marketing or CRM
will cost a lot less in the long run, because after the test, you will
know the answers to questions like these:
- What are the values of my customers and how can they be
- How responsive are my customers to data-driven marketing
- Does the 80/20 rule apply to my business and customers? To
- How much can I spend on a "solution" and still get a
reasonably fast payback?
- What type of software functionality do I absolutely need, what
functionality would be nice to have, what can I do without?
- How do I measure and report on the ROI success of data-driven
marketing? What is likely to be my ROI on his activity?
For the test, we will craft a short-term plan of attack based on your
resources, looking for the best "big idea" for creating an
immediate impact on profitability. Then we will execute a test
of this idea, and measure both the direct results of the test and
other customer metrics leading to a conclusion: a fact-based report on
the ROI you can expect from data-driven customer marketing
techniques. We will also keep an eye on
the long-term picture, making sure anything we do in the short-term is
something you can use in the future.
If you are brand new to data-driven customer marketing and want
your staff to be involved in the Test, consider scheduling a
Database Marketing / Analytical CRM Roundtable session first to
get everybody up to speed.
How It Works
1. Customer - You provide an overview of your business and
customers, any customer reporting you might have, and a snapshot of a
customer record to let me know the kind of information you keep on a
2. Data - get the data into a format we can use.
If you have a data warehouse or some smart programmers who can easily
extract data from operational systems, I can specify all the
requirements for this step. If you don't have this capability, I
can provide it by having an expert in ETL (Extract, Transform and Load)
create a temporary solution.
3. Reporting - we do a snapshot analysis of your customers,
discovering segments, profiling current / future value, and
determining a test approach in conjunction with marketing.
4. Test - run the test, either through offline direct contact
through the mail / phone, or online through a web site / e-mail, or
5. Analysis - run results and the ROI models to determine the
propensity of the customer to respond to database marketing techniques
and the potential ROI of using this approach.
6. Deliverable - Provide a final report summarizing the test,
interpreting the results, and making specific recommendations on how
much can be spent pursuing the data-driven customer approach while
still generating a specified ROI. I will also provide you
direction on software functionality you will need to drive profitable
programs - not specific software packages, but minimum requirements to
accomplish your ROI goals.
That's it. The Customer Marketing / CRM ROI Test can be
completed with direct involvement of IT and marketing staff in a
"teaching mode" or as a turn-key operation with the barest
minimum of time involving your staff. Using this testing
approach is the most reliable way to ensure you only implement the
customer marketing / CRM programs you can generate an acceptable ROI
for. At the same time, you will begin to understand your
customers in ways you have never had access to before.