Customer relationship management (CRM) is in the ascendancy. It’s no secret that the current financial climate has shifted many marketers’ priorities onto retaining the customers they have, rather than chasing new ones. Last week, a survey of marketers in the UK found that CRM delivered the best ROI of any form of marketing.
That trend is repeated in Asia. For example, the focus of adidas’ marketing investment in China post-Olympics has moved to building a better CRM platform .
“As clients prioritise during the economic crisis, CRM activities have been disproportionately less affected,” agrees Justin Billingsley, CEO of Saatchi & Saatchi Greater China. “Clients need to show how outflow spend matches inflow revenue. CRM has a distinct advantage over other media forms in terms of accountability.”
What is striking about the latest CRM initiatives are the types of brand involved. Sectors such as retail, travel and finance have long been focused on segmenting customer data to refine their marketing. Now sectors such as fast food and FMCG are doing the same.
Mohammed Sirajuddeen, CEO of Rapp Asia, says his agency has seen McDonald’s in Singapore among the brands using CRM, gaining “immediate” results by building a database from its online and phone delivery service, then identifying high-value customers.
The rise of digital channels is one of the key drivers. Brands that previously had limited access to customer data can now gather information through the likes of websites and email newsletters.
Sirajuddeen notes that CRM has become especially popular in India and China, where services such as home-delivery, involving face-to-face interaction, are less prevalent. Friso, a Chinese milk-powder company, is targeting middle- and upper-class mothers using online CRM tools.
“It’s a win-win situation for most parties,” adds regional director of MEC Interaction Rafis Kadir. “CRM and customer loyalty go hand-in-hand. And with that, you spend less on customer acquisition on mass channels as you can activate, up-sell and cross-sell.”
But are Asian agencies able to cope with hardcore data processing? After all, outside the most mature markets the region does not have a strong legacy of direct mail and other forms of data-based marketing. Sirajuddeen argues that clients and agencies in Asia still fail to cover the basics when it comes to CRM. He recalls an airline that tried to gather data, but didn’t even ask respondents whether they had a passport and how frequently they travelled; “700,000 records were completely worthless,” he recalls.
Also, where should CRM specialisation lie? Rapp is selling itself as a purely data-driven agency; meanwhile, digital agencies also see the opportunity in building CRM capabilities. Recently, Isobar’s wwwins Consulting announced the launch of a CRM platform tracking social media. Media agencies too have been building up their data practices.
“OgilvyOne, Wunderman and Rapp are strong in this area as they have data analysts and CRM consultants in-house, plus the infra-structure such as backend servers and database systems,” says one source. “Many agencies are trying to say they have it all, but when it gets down and dirty, they do not have the right resources.”
CRM and customer loyalty go hand-in-hand. And with that, you spend less on customer acquisition on mass channels as you can activate, up-sell, cross-sell products and services to your base to increase your revenue.”
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This article was originally published in 13 August 2009 issue of Media.
