Relationship Marketing in Manufacturing

DataBase Marketing, Driller Q & A, Marketing thru Operations, Newsletters

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Q: Do the principals in the Drilling Down book apply to manufacturing? I was first introduced to Relationship Marketing in an MBA course years ago. I have been looking for an opportunity to test these ideas and now find that chance in this job (I was and still am a foot soldier, but now have more responsibility in these areas).

Manufacturers typically look at the highest revenue-producing customer, then pull out the manufacturing directory and start calling every company in the same business. Not really marketing. Can CRM be used to mine the data we need to be predictive and focused on the value of customers and retention?

A: Sure, same core issues and metrics apply:

1. Retention: Identify best customers, determine order cycles, set up a report that tells you who “should have” ordered but did not based past on past history, either market to them or send this info to sales, depending on the value of the customer.

2. Recapture / Defection: Identify best customers who have stopped purchasing and find out why, take action aligned with the value of the customer. You may not get these customers back, but you will learn critically valuable information that will help you retain customers in the future – is there reason in common why these customers left you? Was there a common Salesperson? A common Product line? A common type of Machine used? A common Material? Take these findings back into Operations and find out if the issue can be corrected.

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Off the Marketing Richter Scale

Brand Management, Customer Experience, DataBase Marketing, Marketing thru Operations, Web Analytics

Man, what a month in Marketing land.

First, you have one of the largest Ad Agencies in the world admitting their business model is broken, because agencies are not in charge of the fundamentals of Branding – service, innovation, engagement, and execution.  I would add the same thing could often be said of the client side; MarCom people spend way too much time on “Com” and not enough on “Mar” – is it time for a realignment?

Then, in an even more spectacularly unexpected move, you have C-Level folks at 2 gargantuan Advertising Agencies (though both part of WPP) co-writing an article declaring that Brand and Response are the Same.  Here’s the opener: “the value that brands bring to a company’s total business value is exaggerated.”

Holy Branding Batman, that’s one heck of a thing to say for an Ad Agency, know what I mean?  But they are absolutely right, the nature of a Brand has changed, this ain’t the 1960’s.

This is how they get to “the singularity”:

“What was once sales is now enhancing the brand expe­rience, because through direct marketing technology and strategies, a brand can reinforce its ability to listen, customize and learn from the consumer. This is not just direct marketing, its direct engagement with every potential customer, sometimes at the moment they’re introduced to the brand.  In fact, in a world of compressed consumer decision-making, direct response is now a potent form of brand­ing.”

I love it when you talk that way.

Let’s be clear on this.

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Sales or Profits?

Analytical Culture

Seems the previous post (Best Seller Gone Bad) really hit home for people; perhaps we should drill into  this a bit.  So:

1.  Is the impact of your work evaluated against Sales or Profits?  (example)

2.  Do you think this evaluation approach is correct for your job and company?  Why? 

3.  Would you change this evaluation method if you could?

4.  What is holding you back from trying to make this change?

Personally, I always choose Profits if I can; the leverage is so much higher than Sales.  It’s much easier to generate $5 in Profits than $5 in Sales for any given $1 in budget, because there is generally so much waste in the Marketing system.

Update: OK, how about answering this question – when your work performance is evaluated, what percentage of this measurement is based on qualitative factors?  quantitative factors?