CRM/Marketing Automation vs Traditional Marketing

There, did I drop enough buzzwords on you at once?

For those wondering what I’m talking about, I’m talking about keeping track of your customers, and setting up marketing items that target your leads at specific timed intervals and after customer initiated events.  In other words,this is about communicating with your customers in a way so you remain relevant to them, and to offer them products or services when they need them.

First, I’ll break down a couple of the words I listed above, for those that don’t know what they mean.  A CRM is a Customer Relationship Management (usually followed by the word software or system).  Basically, it’s like a Rolodex of information regarding your past or potential customers, with as much information as you can fit.  It is edited every time a customer makes a connection with your company, and tries to maintain a grasp on where he or she is in the purchase cycle.  Marketing Automation is a system that reaches out to your customer or potential lead based on parameters that are inputted into it, (hopefully from some CRM).  These are two different systems, that when paired together work really well.  A campaign is based on what you want to advertise.  It has a start, middle, and end, based on the intended outcome.  Several campaigns can run at the same time.

Okay, so now that we went over the definitions, we can focus on the actual business use.  The easiest way to wrap your head around this to think about a more traditional marketing avenue first, like a print ad in a magazine. When you put an ad in a magazine, you are aiming at anyone who reads that magazine.  Your creative needs to be attractive to the demographic of the magazine subscription base. It’s great for attracting brand new customers.

Now, an advertisement generated by a Marketing Automation tool tied to a CRM is going to look at specific groups of customers, and target them based on an experience they had.  So, for example, you are running a furniture store.  An advertisement from a system like this would send an email out to customers who recently bought a couch, and offer them a discount on a matching recliner.  Or, if you ran a flower shop, it would send you a reminder to buy your Valentine’s flowers in advance, promoting a specific product based on the customer’s last purchase.  It is a personalized, direct ad sent only to customers that you know.  One that allows you to diagnose the effectiveness by using analytics based on real numbers.

Of the two, the more traditional advertisement, in this case, the magazine ad, is hoping to attract business based on a whimsical need.  You hope that the person reading the ad will need your product or service at that moment, and take advantage of the offer.  A CRM ad is targeting a customer that you are pretty sure needs some level of service, based on past experience with that customer.  It is much easier to calculate an ROI (return on investment) on this type of marketing.