Next up for CRM? Customer Retention Through Contextual Messaging - InformationWeek

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Data Management // Big Data Analytics
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Scott Robinson, IT Consultant
Scott Robinson, IT Consultant

Next up for CRM? Customer Retention Through Contextual Messaging

The rapid evolution of CRM has initiated a rush of new marketing processes and practices; combining multi-channel messaging with analytics is a promising new direction.

Few business sectors are faster to exploit growth in mobile and cloud technology than CRM. We can scarcely go a month without reading about a new trend or emerging process in customer management. Social CRM (bidirectional interaction with customers via the Internet) is upon us; social media monitoring (listening in on what customers say to each other about your brand) has become standard operating procedure. And, the merger of CRM and IoT is now underway.

But a less flashy, more labor-intensive practice is gaining steam and yielding big ROI: the individuation of messaging to customers. The once-unthinkable challenge of marketing to customers with virtual one-on-one content presentation is now doable, thanks to the growing ubiquity of analytics and the increasing sophistication of social media platforms -- even when customers number in the millions.

Two techniques, leveraged in concert with one another, enable that virtual one-on-one connection: hypertargeting and microsegmentation.

Hypertargeting is the delivery of highly refined content to highly specific sub-groups in a customer population. The more specific the sub-group, the more refined the message. The idea is to craft content for customers in such a way as to make it seem intimate -- a personal communication, which makes the customer feel special.

Microsegmentation is the method by which the sub-groups to which hypertargeting is applied are defined. CRM has gotten better and better at this, as more and more data pours into the process. The original foundation was parsing populations by demographics. It's effective, but general. Next came personal profile data, served up by social media, identifying everyone's favorite this or that. Finally, as analytics have burrowed more deeply into CRM, patterns of behavior have expanded from buying histories to online travel patterns. In short, it's possible to know an individual customer as well as or better than they know themselves (as a customer).

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Neither hypertargeting nor microsegmentation are particularly new -- MySpace launched its earliest implementation of the former almost a decade ago -- but we're only now reaching a point where the in-house capacity to crunch numbers well enough to fully optimize them has become a standard. Hypertargeting, to be effective, relies on accurate microsegmentation, and that requires serious analytics savvy. You can't just pull it off a shelf, you have to fully understand what the numbers are saying.

The horsepower of this approach, effectively applied, is significant to begin with; but now it's greatly amplified by the proliferation of channels by which CRM can track the customer. We're well beyond email at this point, and into embedded content in social media, mobile apps, and direct text. This opens up an additional selective axis -- context -- by which the message to the customer can be more refined still, depending on the channel they're surfing when contact happens. An ad popping up on a customer's RSS scroll is different in kind from one that goes straight to their phone.

Scott Robinson
Scott Robinson

This potent pattern analysis serves up yet another powerful feature of customer management, one that traditionally has been frustratingly opaque: products aren't the only thing with life cycles; customers have them, too. The shifts in online behaviors that occur as customers age can be carefully scrutinized, revealing differences microsegment by microsegment that can be leveraged for predictive purposes. Put another way, it's possible to have tomorrow's messages to customers crafted today, and to target them just as effectively.

The downline ROI for all of this CRM goodness is big gains in customer retention. A customer that's feeling the love will stick around, and it's far cheaper to keep an existing customer than to cultivate a new one. As the Internet has leveled playing fields across countless industries, the competitive edge has shifted from having the cleverest marketing to strategic investment in the long-term relationship - where a little time and attention go a long way.

Scott Robinson is a 20-year IT veteran, a consultant to industry and government in the US Midwest. His areas of focus are enterprise architecture, analytics and team management. He has also written extensively about the Beatles, and lectures frequently on Paleolithic culture.


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