How to produce revolutionary eCRM

Everyone wants to get eCRM right of course. But given that there are something like 40 different definitions of what eCRM is, just knowing where to start can put the kybosh on the grandest of ambitions. In 2003 some colleagues decided that what we really wanted, given increasing investment in digital, was to prove that relationships built and nurtured online actually delivered commercial results. And that's what we set out to do.

Today, eCRM in my view is simply the science of creating lasting digital-channel relationships that can be measured commercially. In other words, our ability to measure the results of tactical campaigns is all very well, but we need to attach results to our engagement with a specific customer over the course of the life of that engagement - which ideally should last much, much longer than a tactical campaign or two! So, how do the best practitioners go about it? Here are a few of the critical steps in creating an eCRM programme.

Understand what data you hold

Most marketers have a wide variety of different pots of data – transactional, email marketing, website traffic, in-store, loyalty club, competition entries, addresses with forgotten provenance. The first thing that has to be done is to find a way to make the data consistent (for example making sure “Forename” is matched up to “First name”). Next it needs to be centralised. This might be as straightforward as giving it to an agency who will give back a rationalised database containing everything they were given. You’ll probably find that a huge amount of the data doesn’t have a useful name attached to it (web traffic, or perhaps records that only contain first names).

You’ll almost certainly find that much of the data is out of date, or plain wrong (petitions signed Mickey Mouse!). You’ll also see that you probably have an awful lot of it.

The first task is to look at the data and start looking for patterns. You can do this in-house if you have a data team, or an eCRM or data agency can do this for you. Essentially they are looking for a way to segment the data into reasonable groups. For example, these groups might (if we focus on customers) include:

• Customers who spend more than £10, £20, £30, £40
• Customers who buy on particular days of the week
• Customers who respond to discounts versus those who respond to added extras
• Customers who have visited the website once before purchase versus those who visited four times.

That’s pretty straightforward. From this basic data we can probably derive a few insights which might be useful. For example, the above might show us that there is a correlation between the number of visits to the website and the value of purchases.

And there may be a correlation between the transaction value and how many times a customer has been contacted with what kind of call to action. Ideally the data will show relationships between a customer’s average transaction value (ATV) and the length of time they’ve been a customer.

So we’ve started to derive insights that can inform our strategy.

The data you already hold will probably show you some surprising things. One retail client had data that showed an ATV that was higher than expected – and almost every customer we looked at had a transaction value well below the average. Eventually we found a tiny segment of a few people who, every time there was a 50% discount offered on a DVD, would buy a thousand and eBay them for a profit. It gave us an unexpected marketing angle – we could promote specific titles to this specific segment without broadcasting it to everyone and wasting one of our (limited) contact opportunities – meaning we could send everyone else an offer that would be perfect for them instead.

So understanding what data you hold is critical. Eventually the holy grail of eCRM is a ‘“single customer view’”, where there’s just one database that all the sales, marketing, web and long-term data is fed into. For many that’s nigh-on out of reach, and in our experience of working with household name brands it’s not necessary in order to have a hugely successful eCRM programme generating massive revenues.

Turn the insights into a strategy

I’ve already mentioned some of the benefits of understanding the data – often it tells you what you need to do. In one of the above examples if four visits to the site makes for higher ATVs, then the marketing activity should concentrate on driving four visits. OK, that’s a bit simplistic perhaps, but you get the idea – eCRM basically works on this principle. Look at the data, see what it tells us to do, find out why (a whole subject in itself, which I won’t go into here), then establish a marketing programme that gets people to do more of it.

So we identify the different segments, and what each delivers commercially over time, say a year, and eventually a lifetime (this is called the ‘Customer Lifetime Value’, or CLTV). Then we prioritise. There’s little point in spending 10% of the eCRM budget targeting 10% of the base if that 10% only contributes 2% of the revenue. The segmentation tells us what to do. If we have limited resources, then broadly speaking spend the money on the segment with the highest CLTV!

And execute

Email is the cheapest way of reaching lots of different segments with relevant tailored messages at precisely the best time, as shown by the data.

It’s easy to allocate different creative executions based on the segmentation rules, and it’s straightforward to transfer data to email suppliers (unless you’re going via an eCRM agency who will manage the selection and broadcast process for you). It’s also – critically – easy to see the results in real time. Opens and click-throughs are OK as indicators, but properly integrated analysis is is central to any serious eCRM programme, and there are specialists in providing this kind of straight-through tracking. Ideally of course you’re tracking from email to sale and repeat purchase, and adding this information to the central database so you can see long-term trends and adjust your eCRM programme accordingly. This gets your by-segment ROI, and your CLTV, and informs refinements to the segmentation and comms strategies.

Great eCRM incorporates email, community hub sites, tactical campaigns (to grow specific segments or to fulfil business needs, like filling up under-booked hotels), sometimes even mobile. It’s tested, constantly, and honed until it produces reliable results time after time. It actually removes uncertainty and takes the guesswork out of marketing. Great eCRM can have a fantastic effect –like McCain Foods who changed engagement rates amongst brand resistors from 14% to 63% in under a year, or the improvement in ROI of 32% for The Sun’s Fantasy Football game this season. Done well, eCRM revolutionises marketing.

An abridged version of this article appeared in UTalkMarketing

eCRM - where on earth to start?

There are a few clear benefits to eCRM. Firstly it removes confusion and uncertainty for marketers in recession. There are proven methods, and they generate testable results, so marketing budgets can be allocated on a strict ROI basis. Secondly, solid eCRM programmes build relationships with consumers that can be both brand engagement-based as well as transaction-based. For example we've taken a 14% click-through rate from McCain "brand resistors" and transformed it into a 63% click-through rate in ten months.

The interesting thing for me as someone constantly trying to work out what's next, is that eCRM is a platform, not a channel. It's definitely not email marketing, although it uses it. It's not a technology, though it uses many technologies. What it is – and this is reflected in how it's practised – is a principle. ECRM comprises understanding (data and analytics), insights (informs planning and ideas), relevance (segmentation, targeting, timing) and testing. Notice I didn't use channels anywhere in there; I believe channels are simply the function of targeting.

And the channels can be anything – email (cheap as chips, immediate), SMS (cool but with ethical issues), microsites (essential in my view), e-commerce (handy if you want direct ROI!) and so on. We also use social media, online sales promotion, SEO, you name it – as long as you can directly track it.

All great. Sometimes though you have to start somewhere, and for many clients getting us in to take over and drastically improve an email marketing programme is the best way. Quick wins can generate millions in sales, or massive changes in engagement – as I mentioned in the case of McCain Foods. Speaking of which, we're counting down to the launch of a huge new initiative for them this autumn, providing consumers with a truly segmented brand experience and a new platform for a (properly integrated) eCRM programme.

List of Vistage members on Twitter

I think it's high time someone started this - a vague attempt was made on Vistage View but as a discussion forum it doesn't serve as a directory.

So, please add:

- Your Vistage Group
- Twitter handle (e.g. @felixvelarde)

to this list by adding a comment below... if we can gather some momentum, we'll compile a directory or make this list available to Vistage View to take over :)

This month I've met a couple of really interesting companies who sort of dovetail with what we do in eCRM. Several weeks ago I was at an email round table event for Revolution Magazine, with some highly knowledgeable people both client-side and provider-side. It was fascinating to hear how people view the current state of email marketing, and its future. Topics ranged from managing ISP reputation scores to behaviour-based automation, drivers like client profits and critical success factors like usable design. Everyone in the room was agreed on the critical importance of good segmentation.

I followed up with two of the companies sharing the conversation. One provides straight-through analytics - one of the Holy Grails. The usual way of reporting on eCRM programmes involves extracting information from a variety of separate databases, then stringing together email tracking, mobile, web and e-commerce stats. In a huge step forward, they build a bespoke (free) database behind a fantastic dashboard, which means we can have genuinely end-to-end customer tracking underpinning the eCRM programme, without interfering with existing databases or adding unnecessarily to the cost. The other company sits right at the other end of the process. They make sure emails get delivered and read, through a combination of technical expertise and negotiating power.

We're going to try and bring both companies into what we do, as they'll help us tighten up delivery and tracking. Essentially, while we know that what Underwired does - segmentation strategy and eCRM campaign development, creative and management - drives revenue on a huge scale, there is always much room to improve the technological wiring in such a way that we can improve revenues even more. It's a combination of properly coherent, end to end attention to detail. Where we get the opportunity, bringing together the right partners to support the strategic and creative work will mean incremental revenue for clients in its own right.

ECRM gathers pace, and we're seeing engagement rates of 63% with previous 'brand resistors' and CTRs of 50%+ as a norm. And it feels like summer might be excellent too.

Moshi Moshi Brighton, a tale of wee and warm sushi

Yum, Moshi Moshi in Brighton - quick run down from London straight after work, membership card in hand and all ready for a 50% discount... what could be better? Well, let me tell you how it really was.

We'd booked a table for three at 8.30. The manager, tousled and hassled, told us the couple before us was still finishing up. In fact, he came back 15 minutes later to rant that they were being deliberately obstructive, taking forever to finish their drinks just because they'd been told to leave. Told to leave? Irrespective, the table next to theirs was unoccupied, but in need of a wipe. We waited. We were eventually seated. That was when I noticed a very faint smell. Of wee. Maybe, we thought, it was something else. It was fairly faint.

We ordered. Quite a lot was unavailable (tuna, in a sushi restaurant). Limp, warm fish started turning up (the starter arrived after we'd started in on the sparse sashimi platter). The wine, a very decent Breaky Bottom, was excellent, but the Sapporo was tepid. The waiter's IQ was tepid too, barely breaking double figures.

A table behind us came free, was quickly filled with four guys; the manager called across the loud and trendy music, "It's OK, this corner used to smell of p*ss, but it doesn't any more!" Next he was spotted munching food while he cleared away plates.

We tried one of the dishes off the conveyor to see if was any less awful than the special - warmer, limper, greasier. By this time the three of us had had enough. Bob and I decided we needed some decent grub, so we grudgingly paid ("Would you like to leave a tip?" "Nope.") and headed out. As we passed the manager and two waiters lounging on the steps outside having fags, I couldn't resist. "Still smells of **** mate." Ended up at The Regency on Brighton sea front, where we had a delicious haddock and chips, twice. Should've gone there to begin with - and I would strongly advise, touch not Moshi Moshi in Brighton with a barge pole, The Regency fish shop is spotless, professionally run and perfectly served.

Tentatively approaching Podcasts

I went to a seminar the other day organised by AAR (yes, we did their website) and presented by Dawn Sillett, a brilliant creative psychologist who does a variety of in-company workshops to improve creativity and engagement.

One of the take-outs from the seminar was that everyone has a different way of taking in and assimilating information. When we do presentations, a third of the audience may want to see diagrams and to visualise, say, customer journeys. Another third may listen intently and create a model in their heads based purely on what they hear - they might sit in a meeting with their eyes closed and a finger pointed at their ear. Another might want to get a gut feel for the people, and if they trust you, trust you to get it right.

Dawn wondered out loud how many of us had a website that caters for all three of these types of people. And it's true - we do the visual thing very well. And our eCRM website does the 'feel' thing pretty well too - people we've spoken with say they get a good impression of the people at Underwired from the way the site presents our characters.

The one thing we don't do at all is present ourselves in an auditory way. No music (though the eCRM website seems to really scream out for it!), no sounds, no podcasts.

So I've started to play with recording some of the articles I've written recently. It's hard - I've never recorded anything deliberately before, and I keep muffing it up. Someone once told me I give speeches like Captain Kirk acts - and I guess it's transferring into the podcasts. When I've got one that people here like, I'll add it to the Underwired website and you can let me know what you think - good or bad! Add a comment if you have any tips, or sign up to our email list if you want a nudge when the first recording is online.

A draft to illustrate an idea by @stevecunningham

So what is #vistagenow?

#vistagenow is a proposed Twitter hashtag that Vistage members can use to propagate an urgent business issue they would like other members on Twitter to address straight away. This may be useful tactically (just before a critical meeting) or strategically (needing a wide range of views to help inform corporate decision-making).

Replies may be short, but will likely include pointers to websites or Vistage View resources that may help. If you want to deepen the discussion, you can start a new topic in the Vistage View forums, but you should also share the link on Twitter using the hashtag so that Vistage members can find out what happened next!