CRM and database marketing

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My first role out of University was in the Marketing Department of a laboratory chemical company. I was the Product Manager responsible for a range of special reagents used in a variety of instrumental analytical techniques.

Each month the IT department delivered a stack of monthly reports comprising several reams of faint dot matrix computer printout. These reports showed last month’s sales, budget and prior year by quantity and value for every product family and were the “metrics” of our business.

In common with most companies in the 1980’s the IT department managed a large mainframe computer which handled all the company’s order processing, billing and warehouse stock management systems. It was staffed by a cadre of computer specialists whom to my non IT ears, spoke in another language.

By chance one day I asked if it would be possible to have a printout of my product range sales to show sales by customer, by individual product and sorted according to our various salesmen’s territories. I was interested to see who was buying what products and what if anything I could learn from this data.

The request was considered by the company’s Computer Committee. A special program was written and about a month later I had a pile of A3 sized computer printouts to wade through.

Very soon I started to spot that customers who were buying reagents A and B, had to be interested in reagent C; and that those buying products D, E and F would have a need for our new range of high purity solvents.

Armed with several highlighters and a biro I set about annotating the printouts to give our salesmen better direction to enable them to sell more of my product range to customers buying only one or two of my product lines. Within a few months sales were up, the salesmen earned more commission and I was hooked on the power of database marketing.

My rudimentary paper based CRM system was so successful that the company could no longer produce high purity solvents fast enough to match the rate of order growth. And that was the next lesson I learnt, always make sure operations can ramp up output before you stimulate demand. A good problem to have!

In these days of sophisticated CRM systems, notepads, PCs and spreadsheets, it is hard to believe how revolutionary this approach seemed at that time. And yet I still come across companies who have no CRM system, don’t mine their customer sales data and generally wait for customers to come to them.

CRM systems today should be at the heart of how you manage your customer relationships, driving and controlling all aspects of the customer sales and service experience. There are plenty of CRM systems to choose from but I would start by asking whom in your network uses CRM and then by going to see how their company benefits from using it.