By Marie Marra

One reason to allocate more marketing budget on customer retention, as opposed to customer acquisition, is simply spelled ROI (Return on Investment) or ROAS (Return on Advertising Spend):

It costs 10 times more to find a new customer than it does
to keep a present customer satisfied.

That’s from Nadjii Tehrani, a customer relations management specialist with Customer Inter@ction Solutions.

That 10-times factor at the marketing bottom-line is the savvy manager’s motivation to value customer care through personalized communications. CRM Tehrani suggests simple, often non-tech personalization strategies:

• Lesson learned from successful telemarketing — Tailor the message and response to an audience of one, rather than using one-script-fits-all replies. This, Tehrani notes, is the definition of database marketing.

• Database marketing – A form of “mass customization” that, although it sounds like a contradiction, simply means personalizing messages to show value or benefits to the individual.

• Conducting Customer Relationship Management in the customer’s preferred mode.

“In the digital age, it might be easy to shirk real customer care. Instead of responding to all customer inquires via e-mail or digitally, it would be wise to find out the customer’s preference. In other words, if the customer prefers to be contacted by e-mail, then and only then can we respond to his or her customer service matters via e-mail.” (Nadjii Tehrani)

The last tip, above, is interesting applied to the latest news from an Internet Pure-Play Company.

Clash of the DVD Titans

Blockbuster and Netflix are in a competitive war for mind-share and market dominance in entertainment rentals/sales. Blockbuster’s competitive strategy has been to offer both Internet and bricks-and-mortar film orders and returns, and to undercut the competition with lowered pricing.

While Netflix operations are solely web-based, Netflix increased value-adds to its customer service, including an online instant film viewing service and adding social networking features to its site. Since Netflix is an Internet-based Pure Play company, with no bricks-and-mortar presence, the Netflix announcement of midAugust took many online business watchers by surprise:

Netflix dropped its “unresponsive” email-based customer service department and replaced it with “actual people.” That applies Nadjii Tehrani’s CRM principle of personalizing communications!

The second unexpected Internet Pure-Play action from Netflix came in the announcement of on-shoring its customer services. Specifically, the 200 “actual people” staffing Netflix’ now-dissolved email service department work in Portland, Oregon, not offshore. (According to Netflix, Oregon has the “friendliest-sounding voices” in the U.S.)

Last bit of CRM wisdom from Netflix: It’s human-only Customer Service Department is open 24/7 and is found only one click away from the “Help” page.

Future installments of this B2B Marketing Tips article will focus on Personalization Techniques to customize PayPerClick Search Marketing Campaigns … a far more digital approach to what Tehrani called “mass customization.”