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In 2020, the pandemic exposed the problems of the marketing strategies of Russian companies. The flaws related to the digital sphere have become noticeable. That is why businesses, when working with a client, were forced to act blindly to survive in the new normal of 2021.
Companies that collect and process customer data, implement proven hypotheses and recoup the investment in customer relationship management. These companies receive additional revenue from CRM marketing.
To prepare a strong CRM strategy, it is crucial to understand:
how to measure the results;
what metrics to use;
what goals to set for a specific area of business (market benchmarks).
Russian CRM marketing agency Out of Cloud works with various companies. Experts of the agency have identified key metrics and business results that can be achieved in different business fields.
In 2021, Out of Cloud released a study of CRM marketing in Russia. The team has analyzed the responses received from 200 Heads of CRM, Loyalty Programs Executives, and CMOs who work in various business fields.
After processing the information, the agency’s specialists identified 9 key metrics of CRM marketing that are used by different companies to assess its effectiveness:
The most important metric for B2C companies is CRM channels turnover, while in B2B it is the size of the customer base. The most low-priority metric for businesses from both sectors is the number of positive reviews from the customer base.
Regarding the size of the business and not the sector (B2B, B2C), the size of the base is a priority for the small businesses, for medium businesses it is the size of the customer base, and for large ones it is the size of the active customer base.
Customer reviews are also a lower priority metric for businesses of all sizes.
Attracting new customers is becoming more and more expensive, and high LTV can bring a business great revenue. Consequently, subscribers’ loyalty is of utmost importance.
Companies measure the results of marketing campaigns more often in terms of the size of their subscriber base rather than in terms of the revenue generated by CRM campaigns.
The efficiency of CRM marketing can be estimated using three metrics: the share of turnover from all CRM communications, the recoup of investment, and incremental effect.
ROI. During the interview, many respondents found it difficult to answer how the investment in CRM marketing recoups.
The CMO of a large Russian online retailer explained why they don’t use ROI when evaluating CRM campaigns. For the majority of large companies, CRM marketing is a collection of almost free channels. There is a cost per channel service, but there is no cost for the broadcast, therefore ROI always stays over 100%.
Survey respondents who do measure ROI recognize the full return on investment in CRM marketing: investments recoup up to 500%, and less often this figure reaches 1000%.
Share of turnover. In large and medium-sized businesses, the share of turnover from CRM communications ranges from 6 to 15%. A small percentage of respondents from large companies reported a figure of 31%.
The disadvantage of this metric is that it is not clear how much net revenue the business receives from the CRM itself.
Incremental revenue. To calculate the additional revenue generated by CRM marketing, one needs to compare the revenue generated by the two customer groups, one of them does receive brand communications and the other does not receive any of it.
The study showed that the Russian market is not very familiar with calculating the incremental effect. But as for the companies that do count additional revenue, they tend to show great results. To the middle-sized businesses, CRM marketing brings 6 to 10% of additional revenue, while large businesses register up to 5% of additional revenue.
Out of Cloud has selected 8 key fields of the Russian market and highlighted the results it has achieved on the projects. The results are presented in the table below.
Good marketing should be about data analysis, the quality of hypotheses, the speed of their implementation, and campaign adjustments. It especially applies to the realities of the new normal of 2021. This is exactly what helps businesses to reach their marketing goals.