Data: the lifeblood of any CRM programme

There are many platforms on which to host your company's data. Remember, until you start using your data effectively, all it really is, is a list with some limited information.

The first step is to choose where to keep your data. Dependent on the number of records you have, or intend having, you could keep this on a simple Microsoft Excel spreadsheet. If you have a large database, or perhaps have decided to go with a loyalty programme of sorts, then you will need a database built specifically for your purposes.

Sound strategy

At this junction, there should be a sound strategy in place that will ensure you know why you are communicating, to whom, and ultimately what you want to achieve through the dialogue and interaction with the customer base.

There are a number of methods to enhance data, and generally speaking, any interface with the customer should allow for some additional capturing of details. Every touch point is an opportunity to learn more about your customer.

Another mechanism is through data enhancement questionnaires. These can either be online (sent via email) or offline (mail packs) to your customers.

Response rates generally increase if you give the customer a few methods with which to respond. He or she should be given the choice of replying via mail (in which case, supply a business reply paid envelope), directly online, or fax. The least expensive route is obviously that he returns via email/online, as this information can then be uploaded directly onto the database.

Increases the response rate

Incentivising the response increases the response rate. Keep the questions simple; don't ask for information you are unlikely to use. If you ask whether he plays golf, he is likely to expect future invitations to play in golf days!

Consolidation of data into the back-end system will then allow you the opportunity to develop your segments and keep your customers.

A well-known business in Johannesburg has the “leaky bucket” syndrome. It spends its marketing efforts pouring new customers into its database, and losing twice as many from its existing base. It's not a massive base, could easily be managed without expensive software solutions, and could be mined against transactions to ensure its existing customers return (it even knows the Pareto principle works exactly for it - 92% of its profits come from the members on the base). It would cost a fraction of its expenditure on TV and print to make a few basic enhancements to its database to understand and engage with the customer better. This would yield insights and opportunities on how to further mine the database.

Translating into all-important sales

Frequency, recency and monetary analyses lead to further insights required for astute CRM practices within any business. Profiling the customer with this information will lead to regular, rewarding and relevant communication that is in itself recognising of who your customer is, building brand loyalty, advocacy of your brand - all translating into those all-important sales.

In today's economy, stakeholders have rightly become more demanding that marketers deliver measurable ROI. Consumers are already becoming more fickle and if they do not have a relationship with your brand, the chances are that they will start flirting with your competitors, if they haven't already.