Long-Term Fix
WHAT IT COST to keep a customer, and what’s it worth over the long haul? These are two of the most important questions DMers can ask themselves these days.
We hope to help answer those questions-and more-in Customer Contact Management, our new editorial section (see page 44).
Appearing in every issue of DIRECT, Customer Contact Management will focus on the practical elements of managing a relationship marketing program, everything from front-end marketing to call center management. We’ll also cover accounting issues and long-term strategy.
DIRECT’s most recent readership survey shows that DMers still spend more on acquisition than retention-the ratio is roughly 60-40. But that 40% represents a lot of money-maybe $61 billion annually, if you apply those percentages to projections made by WEFA last year.
That doesn’t mean all companies are operating at state-of-the-art levels. Almost 70% of those who answered the question in the DIRECT survey said their firms do not have loyalty programs, and only half compute customer lifetime value.
As agency head Ron Jacobs has written, “Too many organizations have gone for the short-term fix, rather than buying into the long-term changes necessary to implement a customer-focused approach.”
So what’s our plan?
The journalistic side of Customer Contact Management will be handled by staff writer Richard H. Levey, who has been making a name for himself in database circles over the past year. Richard will be on the prowl for good case histories and trend stories.
Hershel Sarbin-the former CEO of our company, now working with Marketing 1to1/Peppers and Rogers Group-will contribute a column, filled with case histories of companies pursuing interesting retention strategies. (His introductory column appeared in our Sept. 1 issue.)
We’ll offer advice columns on fulfillment and customer care, along with periodic updates on specific market segments. In this issue, you’ll find an excellent piece by Arthur Hughes on “The Loyalty Effect,” a groundbreaking work on relationship marketing by Frederick Reichheld.
We won’t support any particular school, and will not promote any of the brand names applied by companies to their marketing philosophies. We will, however, welcome contributions from all sources.
Forgive us if our articles sometimes cross over into other disciplines. We’ll be working as hard as you are to get it straight.
Above all, we’ll try to cut through the hype. We’ll revisit the firms we profile to see if their efforts (often announced with great fanfare) are continuing, and if they’re paying out.
If you have ideas you want to contribute (or just feel like telling us we’re nuts), please e-mail yours truly at [email protected].
