» uk-netmarketing: roundup: 15-09-2000

Managing customer relationships
UK-Netmarketing Weekly Round-up - September 15, 2000

The post Internet stock plunge world has left many companies with reduced marketing budgets and a sharper focus on their existing customers. Stacks of companies have appeared on the scene, specialising in Customer Relationship Management (CRM) and 1-to-1 marketing. It can be a confusing area with a plethora of methodologies and more than a smattering of buzzwords. Unsurprisingly, it's a topic that crops up pretty frequently.

Ben Thompson asked the list, "... are many firms actually focussing on retaining their customers? We continually hear of viral marketing and refer a friend schemes that encourage new customers to 'appear' but are many firms following the advice in the post offices adverts on trying to retain the customers they already have. If so any ideas where to look for figures or why firms aren't doing it?"

Terry Kendrick responded pointing out the potential downsides of obsessing over CRM, "They are Retaining, CRMing, 1to1ing and exchanging body fluids with their customers. Some read all the marketing hype and then desperately retain anything they've sent an invoice to. I've seen them quote all the theory and then assume it applies to them. They have strategic intent to retain 80% of their customers because they've been told it takes five to fifteen times as much effort and money to get a new customer as it does to retain an existing customer. They sometimes don't check to see if they have a profitable customer base to start with ... and then they sheep-like spend lots of money to retain these existing customers when they aren't profitable now and are inherently non-profitable. Sometimes you have to chuck your customers and get new ones."

Phil Barrett highlighted the need to have your website in good shape, "Whether it's more economical to retain customers than to churn and burn your customer base depends, in the short term, on how much your website and your business will cost to fix versus how expensive your marketing campaign needs to be. In the long term, you have to concentrate on repeat buyers or you wont HAVE a business to fix. If you do sensible, user-focussed design and testing as you build your site, you won't need to fix it, of course because you'll have got it much closer to being right first time. It's not rocket science. There's a book called Cost-justifying Usability by Randolph G. Bias and Deborah J. Mayhew. The cost of the book itself may appear to need some justification. It is excellent and may be of some help..."

A discussion that's been raging over recent weeks has tackled the issue of brands, their importance online and their impact. Lois Grayson demonstrated the enormous power that brands can yield, citing Coke as an example.

He wrote, "... it was so immediately powerful it changed the image of Father Christmas; he appeared in up until late Victorian times as a kind of green/brown garbed woodman type character until Coke created the red/white bearded jolly rotund chap that's now our traditional image. All with one simple ad! That's why Coke's Christmas campaigns exude so much confidence. Cynics might say that they no longer believe in branding (or Father Christmas) but that's just so much urban edge shit - a fashionable position assumed for effect rather than a deeply held opinion. Or so I reckon."

Will Rowan, added, "Mark Prendegrast's 'For God Country and Coca Cola' (an unauthorised but authoritative history of the company, see pp181) cites 1931 ads by Sunny Sundblom as the origin of a coca cola red Santa. How long before Ferrari red turns into Marlboro red?"

Meanwhile Paul Canty suggested more brands could get into the Christmas spirit. He replied, "Hah... - maybe we could get affiliates in on the action too ... How about Santa wearing his red outfit, Diesel branded of course, Marlboro cigarette in one hand and a bumper KFC chicken bucket with twirly fries in the other. Then he could have a break... have a Kit-Kat. Quick, phone his agent..."

It is said that Christmas gets earlier every year, and it appears the UKNM list is no exception!

The list represents a broad cross-section of the new media industry and many of the subscribers have set up their own businesses or are thinking about it. This rather handy pool of knowledge is a boon for those who are about to take the plunge.

Andrew Smith asked, "Given the number of folk in this forum who are about to or have already started their own business, I'm trying to get some anecdotal evidence about the key things that people have found to be the biggest headaches in getting going e.g. writing a business plan - if you've never done one before, where do you start? How long does it take? How do you find out about all the forms and regulations needed when starting e.g. Companies House, VAT, etc."

Adam Atkinson replies, "Business Plans? Go to any high street bank. Each one will have a template programme. Fill in the gaps. Work from there. That's what I (and many others I know) did."

Xav Adam offered some further advice, "Put the processes in from day one - and make sure they'll scale up - you'll (or your client will) be too busy when up and running to back track and reorganise in retrospect. I've seen friends go 6 to 12 months and then have to sort out a mountain of confused paperwork when they should be focussing on other things."

Nikki Pilkington listed out her 7 biggest headaches: "1) Finding a bank to back me when the Internet was still a dirty word. 2) Realising that although all i wanted to do was design and market websites I also had to be accountant, bookkeeper, office cleaner, PR person, IT person, computer support, etc. 3) people not taking me seriously and therefore not paying 4) filling in small claims forms 5) knowing the procedure for claiming in small claims court 6) writing contract to ensure payment had to be made 7) learning how to become an employer - and find that fine line between too strict and too nice ... as you can see, mostly things to do with money"

There is also help and information from the government. Nuala Whelan, posted, "the DTI provide a full start up package for new businesses. This outlines all the forms needed. Local Business Links also put together starter packs as well as Accountancy firms who are of course desperate to get tucked in to a start-up (business plan dependent ironically). Loads of info so you should not really miss anything out. What usually goes wrong is the ordering of events and the timing within that, nobody tells you that bit. The feeling that something is being missed out will never go away and ultimately some little thing is bound to be - oops."

The down turn in tech stocks and general belt-tightening throughout the new media industry means every buck spent on marketing has to be accounted for, now more than ever.

Ian Williams asked, "One of my client's sites has thousands of sites that link to it. Most have not asked if they can do so - as a result we don't know who they are. Is there a way of auditing which sites have set up links?"

David Mill suggested, "http://www.linkpopularity.com", whilst Ben Hunt added, "Yes, go to Altavista and type in link:www.yourclientsurl.com". Alternatively, Neil Durrant offered, "As long as the sites linking to you have been spidered then searching www.google.com using - link:www.YourClientsDomain.com will give you the list your after. Likewise a similar search on competitors domains yields useful information if your looking more potential link partners ;)"

Rajesh: Redij-Gill came up with a different solution, "Your clients Web logs (generated automatically by Apache, IIS etc. Web servers) can generally include a referring URL ... So for everyone who visits your site, the site they came from can also be tracked. By trailing through the logs or using Web metrics/reporting software (e.g. Webtrends), you can list all referring sites over a given period. Saves the manual effort of having users state where they're from ..."

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