Katy Raines

CRM – just get started!

Hovden, Sept 2013

About me

Music Graduate, Cambridge University

Spent 15 years running Marketing departments in UK theatres

Consultant since 2004, specialising in Customer Loyalty and data-driven marketing

Clients include Royal Shakespeare Company, Opera North, The Lowry, Symphony Hall Birmingham, Wales Millennium Centre, Ulster Orchestra

Now working with USUS on 4 year project to improve CRM effectiveness

CRM – Just get started!

A reminder of CRM

The changing marketing environment

The CRM cycle

What CRM Can deliver

The USUS project – what we’re learning

CRM – how to get started (if you haven’t already)

A reminder of CRM

1. Not all customers are equally valuable

2. It costs 5 times more to acquire a customer than keep an existing one

3. Customers have different needs, which need to be reflected in your marketing communications with them

Frequency1. All customers are not equally valuable

2%

4%

26%

68%

8+ times per year

5-7 times per year

2-4 times per year

Onceper year

60%

25%

15%

% of bookers in 1 year

% o

f inco

me in

1

year

Retention2. Keeping customers costs 5x less

Lost / lapsed customers

Retained customers

New audiences

Segmentation 3. Customers have different needs

2%

4%

26%

68%

These people have different needs

From these people

% of bookers by frequency band

Ulster Orchestra, Belfast

‘Old’ model Were sending all their customer the same thing –

a large 32-page season brochure, costing £1 per issue

Return on investment 1.6:1

‘New model’ Sent different customers different things For 90% of the customers this meant sending

them LESS information, but more RELEVANT Return on Investment increased to 21:1

The changing marketing environmentDigital explosion = Consumers bombarded with content

Growth of tools and sites to ‘aggregate’ and make sense of content for consumers to digest

Expectation of content matched to need and preference

NB. This is no longer a ‘nice to have’ – it’s essential!

email content - relevant

Tailored to match my previous purchasesGeneral

message to everyone

Web content - relevant

And what about Social Media?

CRM / Direct Marketing

Organisation

Customer

Organisation

Customer

Sends direct messages

Broadcasts messages

Social Media

‘tunes in’ at various points

They are different tools for different purposes

The results

Opportunity – to build loyalty and affinity by reflecting their needs back to them with relevant (and personalised) content

Threat – customers will ignore your content as it isn’t relevant, and you will lose them

The CRM cycle

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

50%

The CRM cycle – building blocks

Purchase

PurchasePurchase

Purchase

What can you do to welcome

new customers?

What can you do

when they go?

What can you do to increase the

frequency they buy from / visit you?

Can you recognise a

new customer?

Do you know a customer’s purchasing patterns?

How do you know when

someone has lapsed?

New customer

Frequency

Lapse

My local farm shop – seasonal produce

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

Enquiry

Regular updates via email and social media:- Asparagus

season was 3 weeks early in 2011

- Fruit season was non-existent in 2012

- Vouchers for redemption to monitor

Requests to update mailing list preferences

New customers invited to join the ‘veg-watch’ list – to be informed when different produce available

New customer

Frequency

Lapse

The CRM cycle – another stage

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

Enquiry

French Gite aimed at young families

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

Enquiry

Fantastic re-purchase rates: 1/3 of families came back at least one more year – many every year for 5 years

Built-In lapse rate – when kids >6

Nothing done with enquirers who didn’t book

New customer

Frequency

Lapse

The CRM cycle – French Gite

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

Enquiry

Hotel near Legoland Resort, Windsor

Purchase

PurchasePurchase

Purchase

New customer

Lapsed customer

Frequency

Enquiry

Pre-visit email with all details about

my stay Post-visit email to check on my experience

What a good CRM programme can deliverIncreased frequency from existing customers

Keeping more customers year on year

Reduced marketing costs and improved return on investment

Brand affinity and loyalty

Improved customer insight to aid business planning and programme/product development

Building a picture of the customer

The Customer

Purchasing behaviourFrequencyRecencyTypes of product Response to

commsPurchase

ClicksTimingType

Attitudes and preferences

Stated comms preferencesStated product preferences

Feedback / comments

ProfileGeography

Demographics – age, income

etc.

Social media behaviourRe-tweets

Likes

Customised communications

Picture of the

customer

Product choices

Timing of comms

Type of comms

Symphony Hall Birmingham

The Customer

600 events per year

Mostly ‘one night’ shows

2200 seats

over ½ million audiences each year

Symphony Hall Birmingham – challenges

The Customer

Too much ‘choice’ and information for the customer

Wide range of events

Events changing daily – often going on sale at late notice

Customers are annoyed if things sell out before they’ve heard about them

Symphony Hall Birmingham

The Customer

‘Old’ model – one size fits all Were sending all their customer the same thing –

a large 32-page season brochure, every 2 months

Return on investment average 1.5:1

‘New model’ Sent different customers different things First round of communications for Classical Music Return on Investment increased to 9:1

Logo

Classical Rock/Pop/Entertainm

ent

Jazz, Folk, World, Roots

Family

LogoClassical Rock/Pop/Entertainm

ent

Jazz, Folk, World, Roots

Family

Symphony Hall Birmingham

The Customer

‘Old’ model – one size fits all Were sending all their customer the same thing –

a large 32-page season brochure, every 2 months

Return on investment average 1.5:1

‘New model’ Sent different customers different things First round of communications for Classical Music Return on Investment increased to 9:1

USUS CRM Project 2012-2015

Working closely with 6 USUS members who want to focus on CRM Kino Sør Kilden Dyreparken Kragero Resort Canal Street Jazz and Blues Festival Grimstad Bys Museums

Reporting back and showing progress to USUS Cluster as we go along

Building a picture of the customer

The Customer

Purchasing behaviourFrequencyRecencyTypes of product Response to

commsPurchase

ClicksTimingType

Attitudes and preferences

Stated comms preferencesStated product preferences

Feedback / comments

ProfileGeography

Demographics – age, income

etc.

Social media behaviourRe-tweets

Likes

Dyreparken

Booking systemWebsite /

CMS

On site services

Email software

Social media

Hotel bookings

The Customer

Customised communications

Picture of the

customer

Product choices

Timing of comms

Type of comms

Customised communications

Picture of the

customer

Product choices

Timing of comms

Type of comms

Kragero Resort

Data analysis of booking database:

Identified Key segments:

Has it worked?

Business

Leisure

Spa Golf Families Couples

Different email content to each segment

USUS CRM Project 2012-2015

What are we learning?

How can you benefit from our learning?

How can you get started, or move on to the next stage?

USUS CRM Project 2012-2015What are we learning?

Data

What works?

Seeing the bigger picture

What are we learning about CRM?1. Data It starts with good customer data capture

We can learn a lot just from looking at the data

2010 2011 2012

63%73% 70%

12%11% 10%

25% 17% 20%

Canal Street Jazz & Blues FestivalResidents Day trippers Overnights

CRM: Just Get Started1. Data

What data do you already have about your customers? Enquiries? Bookings? Value? Preferences?

How do you use this data now? To understand more about your customers and inform

your marketing activity (eg. Canal St) To target them with more relevant marketing

communications (eg. Kragero Resort, Kino Sør)

CRM: Just Get Started1. Data

How could you improve your data collection? Quantity Quality

What are we learning about CRM?2. Learning what works We need to know what has worked

We need a ‘baseline’ position

In many cases we don’t have the systems / processes in place to do this

It doesn’t have to be complicated

CRM: Just Get Started2. Learning what works

Baseline position

Comparison

Has it worked?

CRM: Just Get Started2. Learning what works

Can you measure the effectiveness of your marketing activity?

Can you compare the success of different activities?

What could you put in place to do this?

How would you create the ‘baseline’ measure(s) to compare against?

What are we learning about CRM?3. Seeing the bigger picture We need to understand how CRM can deliver

on business performance

We need to SHOW others (internally) why a CRM focus will pay off in the LONG term

CRM: Just Get StartedSeeing the bigger pictureTypical business measures

Total Sales (NOK)

Total Customers

Total Marketing Spend

Business Performance

CRM: Just Get StartedSeeing the bigger picture

Business PerformanceMarketing

EffectivenessCustomer Engagement

Are we selling more / growing?

Is our marketing spend achieving more?

Are our customers more engaged with

us / our brand?

CRM: Just Get StartedSeeing the bigger picture

Total Sales (NOK) % sales from

retained customers vs new customers

Total Customers % customers

retained vs new

Business Performance

Total Marketing Spend

Marketing ROI (return on investment)

Marketing Effectiveness

Customer Frequency

Customer Retention

Customer Engagement

Example – Business Performance

Customers Sales incomeAverage £

per customer5500 £345,000 £62.73

35%

65%

IncomeNew Customers Retained customers

70%

30%

CustomersNew Customers Retained customers

New Customers Retained customers

£31.17

£136.36

Average £ per customer

Example – Marketing Effectiveness

2008-09 2009-210 2010-1111.00

11.50

12.00

12.50

13.00

13.50

14.00

Marketing ROI

Marketing ROI

Total income

Total marketing spend

Example: Customer EngagementFrequency

2%

4%

26%

68%

8+ times per year

5-7 times per year

2-4 times per year

Onceper year

60%

25%

15%

% of customers in 1 year

% o

f inco

me in

1

year

Example: Customer EngagementRetention

2010-11 2011-12 2012-13

% retention 43% 29% 30%

Average over 3 years = 34%

CRM: Just Get StartedSeeing the bigger picture

Total Sales (NOK) % sales from

retained customers vs new customers

Total Customers % customers

retained vs new

Business Performance

Total Marketing Spend

Marketing ROI (return on investment)

Marketing Effectiveness

Customer Frequency

Customer Retention

Customer Engagement

+ by campaign + by segment

CRM: Just Get StartedNext steps

How you can benefit from the USUS project: Follow the progress of the case studies –

presentations at future USUS events

How you can get started or move forwards Take a ‘self-assessment’ of your CRM capability Complete our ‘CRM Basic’ Toolkit Talk to your USUS Account Manager

Thanks!

Katy Raines

Partner, Indigo-Ltd

www.indigo-ltd.com

katy.raines@indigo-ltd.com

twitter: @katyraines