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Building a CRM using Opt-In Permission based emailViews: 232
Dec 23, 2006 4:14 am Building a CRM using Opt-In Permission based email

Matthew Roblee
Customer Relationship Marketing (CRM) is about maximizing long-term profitability through the intelligent use of information. The information is used to enhance and to create superior relationships with customers.


Relationship marketing, to my mind, involves customizing and developing the offer that you make. As a result, you also develop your dialogue with the client to maximize the value to them. It is more sophisticated than the traditional marketing process; it makes customers feel valued because it responds to their individual circumstances - in effect, it is marketing with a memory.

The key phrases associated with relationship marketing are:
* Customer life-time value - looking at income, cost and profit over the full period of the relationship rather than just on annual basis

* Data-warehousing - the collection together into one place of information from many places

* Data-mining - the process of searching for nuggets of valuable information that can provide ideas for enhancing value or for extraordinarily persuasive communications


1. What are the drivers in the market? Can you deliver increased competitive advantage by creating higher levels of loyalty?
2. How many customers does the business have? Is it clear what a customer is?
3. What is the retention level? If extremely good, it makes relationships marketing less compelling.
4. Do customers buy from more than one supplier? Do they have to? How good is our 'share of the customer'? How will RM improve it?
5. Do we have the IT/marketing/accounting skills to run a more than competent RM program?
6. Do we have the money to invest in the program?
7. Do we have the right data? Where can we get it from?
8. Are we already doing a good job for the customer? Can we also improve on this?
9. Does the company have a customer ethos that will maintain and sustain any improvements?
10. Are our existing campaigns well-executed?


Customer life-time value is at the heart of relationship marketing. Data-warehousing and data-mining are the tools used in bigger businesses.

In traditional marketing each client is valued on a year-by-year basis, focusing of profit per annum. This approach created a gap between the measurement system and the real world. In the real world it may take some time to make a customer profitable. Remember, customers do not stop and start with the financial year. It may take several years for your investment in a relationship to pay-off.

Customer life-time value is a way of considering the customer across their anticipated life as a customer of the company. It acknowledges that the investment a company makes in acquiring a new customer would probably not be repaid with the first purchase or even the first year of purchases!
# LIFETIME VALUE OF A CUSTOMER CALCULATOR On average, a new customer will buy from the business for ____ years.
# And, on average, a new customer will generate ___ orders per year.
# The average order value is $___.

So, Lifetime Income from a new customer is:
# ___ years x ___ orders pa x $___ order value = $___.
Therefore, with an average Gross Margin of ___%,
# A new customer will generate a Lifetime Gross margin of $___.


Until you know what a potential client might be worth to you, you cannot accurately decide how much you spend trying to acquire them. You can start a CRM marketing campaign today and see an immediate response rate from the first week. If you would like more information on how to build a CRM using 100% Opt-In Permission based email, feel free to let me know.

Private Reply to Matthew Roblee (new win)

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