28 May

CRM is Moving On

A week or so ago I saw a demonstration of one of the better CRM systems, specifically designed for travel companies.  What impressed me is how sophisticated customer relationship management has become.

Searching on Google for ‘CRM in travel’ I came across an online article written in 2002.  To my surprise, I saw that I was quoted in the article.  I said at the time, “My definition of CRM is a corporate culture change supported by skills and systems which focus products, people and processes on the acquisition and retention of customers in a way most appropriate to their value.”  I went onto say, “Database marketing makes a useful contribution to CRM but you still have to think hard about how it can be usefully used.”  I was clearly considering the distinction between managing the touchpoints between you and your customer – customer relationship management in its widest sense - and plain outbound marketing communications. 

Interestingly, talking with the technologists who demonstrated their CRM system, they mentioned the huge variance in travel company understanding of what CRM is all about.  Many still think it is just about database marketing.  This is an important element but there is much, much more.

Database marketing is about customer segmentation.  Customers who tend to buy five star accommodation from you should receive email newsletters about upmarket hotels and resorts.  Customers living in Scotland will be more interested in learning about flights out of Glasgow and Edinburgh than London.  Simple stuff but very effective.

However, CRM is moving on.  With our customers increasingly interacting with us online, we have the ability to capture sufficient detail of information that a customer could potentially be in a segment of one.  This is exemplified by Amazon that does such a great job of personalising its product offers.

What are the core ingredients of successful 21st Century CRM?

1.      Information gathering – Every interaction, every touchpoint that a customer has with your business is an opportunity to gather information.  From the first visit to your website allowing you to drop a cookie to start tracking the customer’s movements around your site to when customers are logged in and shopping or speaking with your call centre and then travelling on a trip that you sold, there is a massive amount of data that can be collected and turned into information.

2.      Planning – This might be the hardest part to do well.  There is so much scope for outbound pro-active customer communications, website personalisation, product customisation, tailoring of call centre conversations, managing all the touchpoints with the customer, that to do a really comprehensive job is difficult.

3.      Execution – The technology needs to be in place in order to execute.  Disparate systems may require integration so that they work together cohesively.  Information has to be stored and applications need to be set-up to act on this in the ways that have been planned. 

4.      Tracking – Lessons can be learned.  At the planning stage, tactics will have been conceived and, when executed, they will need tracking to see if they are successful and can be refined or have failed and should be abandoned.

So what can go wrong?  Plenty.  A poor capability to gather and store information will result in missed opportunities.  A lack of understanding of what is possible with CRM might result in tactics that just do not make the most of the information gathered.  Execution might be lacklustre with customer communications not designed to show a travel company at its best.

 My biggest concern, though, is whether our travel company executive teams can keep up?  In many cases, yes, but for those who cannot, their businesses are going to suffer.  With the cost of new customer acquisition ever-rising, I see CRM as the new frontier for business success.  CRM is moving on.  I hope your business is too.