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6/6/06 - Recruiting Versus Retaining Customers
Yesterday, I challenged readers to understand the ratio of investment in recruiting new customers versus retaining existing customers. The challenged prompted many responses around a common rule of thumb that finding a new customer costs more than retaining an existing one. Figures range wildly depending on the business model but new customer acquisition can cost upward of ten times as much as selling to an existing customer.
So today's challenge to you is to understand the cost of acquiring a new customer versus retaining an existing in the context of your business model. I realize that I've now given you two very large costing tasks in the last two days and I realize the effort will take much longer.
But understanding the cost ratio of recruiting versus retention and the current budget allocations associated with the two acts will provide powerful ammunition to make sure you are spending your customer focused dollars (euros, yen, etc.) properly. Today is a great day to start.
Gary Lemke, Publisher
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TODAY'S NEWS (more)
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Onyx announced that it has signed an agreement to be acquired by privately held M2M Holdings, the holding company that is jointly owned by Battery Ventures VI, L.P. and Thoma Cressey Equity Partners and whose primary asset is Made2Manage Systems, in an all-cash transaction valued at $4.80 per share, or approximately $92 million.
Verint Systems announced that the Santa Clara Valley Transportation Authority (VTA) is deploying its Mobile Video Solution to enhance security on buses operating throughout Silicon Valley.
Parature announced that Colorado vNet has implemented Parature's Customer Support Solution and use the Web-based software to provide customers with in-depth insight into their support requests, increase the efficiency of our Return Merchandise Authorization (RMA) process, and now have the ability to track and report on progress in these areas over time.
Sage Software announced that the Buffalo Sabres National Hockey League team has implemented Sage CRM to automate ticket sales, customer service and marketing activities. Over thirty Sabres employees access Sage CRM to manage sales and marketing programs including the Sabres Insider and SabresKidz Clubs.
ATG announced that New York & Company has selected ATG Commerce OnDemand to power its online storefront. ATG OnDemand offers the ability to create a more personally relevant, compelling and loyalty-building experience for customers - the same benefits customers realize with ATG's licensed solutions.
The State of Arkansas launched Operation KARE (Katrina Assistance and Relief Effort) at the Department of Information Systems (DIS) in order to assist the evacuees en route. To manage the monumental KARE effort on such short notice, the department needed a technology that was both familiar to workers yet flexible enough to be molded for special needs. It turned to FrontRange HEAT Service & Support and used it in an innovative way: to track people and their needs instead of the traditional IT problems. With HEAT, volunteers created profiles of evacuees and their needs based on incoming calls.
The Sant Corporation and salesforce.com announced the availability of Sant Suite for salesforce.com's AppExchange. Salesforce.com customers can now deploy Sant Suite in conjunction with their Salesforce implementation to automate the creation of sales proposals, RFP responses, presentations, and related documents.
Telefonica Publicidad e Informacion (TPI) and Amdocs announced the successful deployment of Amdocs' sales force automation (SFA) solution for directory publishers at TPI. Amdocs provided TPI with implementation and integration services to support the rollout and will also deliver ongoing maintenance services.
Virtual Management announced the addition of synchronization to their flagship product, the Electronic Virtual Assistant (EVA). A major product enhancement, the synchronization tool allows users to keep their online EVA contacts in sync with local desktop or PDA-based address books.
Bluespring Software announced that AccuData America has selected Bluespring's BPM Suite to manage its complex, quote-to-cash sales process.
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 FEATURE WEBCAST (more) |
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"Understanding the Voice of the Customer"
Roger Lee, Director of Consulting Services, etalk
A lot has been said about listening to the voice of the customer to ensure that your business is delivering quality service. But what about understanding that voice? Roger Lee, etalk Director of Consulting Services, discusses how call recordings can contain a wealth of information that go beyond simply gathering data for quality monitoring. This presentation will deliver practical tips for customer service organizations to begin leveraging the data within customer calls for strategic business initiatives that can be felt throughout the organization.
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| CRMAdvocate Stock Index |
| CRMSI | 48.08 |  | -4.07% |
| Dow Jones | 11,048.72 | | -1.80% |
| Nasdaq | 2,169.62 | | -2.29% |
| S&P 500 | 1,265.29 | | -1.81% |
| Top Gainers |
| Astea | 9.81 |  | 0.39 |
| APAC | 2.2 | | 0.10 |
| Selectica | 2.52 | | 0.05 |
| Top Losers |
| SAP | 52 | | -1.54 |
| SPSS | 36.5 | | -0.94 |
| Tekelec | 13 | | -0.87 |
| Complete Stock Index |
| As of close 06/05/06 | |
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Get Ready for the VoIP Tax - Lisa Pierce, an analyst at Forrester Research, said a VoIP tax has been in the works for a long time. "Voice over IP, by definition, is a voice service," Pierce said, "and the whole reason for the Universal Service Fund was to ensure the availability of voice services on an equitably built basis throughout the United States."(Contact Center Today)
|  | | Consumers Driving New Product Innovation - An alarming failure rate for new products has corporations looking to consumers to drive innovation in their markets, according to report released by Forrester Research. "In the consumer products industry, upwards of 85 percent of new products fail after a couple of years in the market," said the report's chief author, analyst Christine Spivey Overby. (CRMBuyer)
| | | Betting on Software-as-a-Service - While some might consider it too big a risk to depend on a third party to secure and maintain a mission-critical system, CIO Peter Ross feels confident in his decision. "I actually believe I've reduced my exposure by using software-as-a-service," he says. "But I did put a lot of eggs in one basket."(CRMDaily)
| | | IT Execs Race Against Time Along Gulf Coast - As the new hurricane season officially started last week, IT managers who experienced Katrina say they have taken steps to upgrade their disaster recovery capabilities. But many still have more work ahead of them.(ComputerWorld)
| | | One Cup of Coffee, 20 Experiences: Take a Tip From Starbucks - Until recently, I was not a coffee lover. In that way, I'm not very different from others in mainland China. China has a deep-rooted tea culture, and a few years back, no one would have foreseen a demand for paying $3 to $5 (in U.S. dollars) for cup of coffee. But things changed. Besides the rapidly growing middle class and the vast volume of foreign travelers and expatriates in China, the branding and the new experience that the giant coffee chain Starbucks brought here may be the most fundamental reason for this beverage-altering "miracle."(GCCRM)
| | | Lose One Customer, Lose Them All - I recently spoke at a conference attended by sales managers of a major oil company. The presentation started with a simple question. "In a recent phone conversation with one of the following organizations, a Customer Services Representative (CSR) told me to 'Go to H---.' Which organization was it?"(SmallBizResource)
| | | Banks to Offer Customers More Channels of Communication but Less Choice - Research shows a shift towards a strategy of increased channels without integration, despite growing demand for consumer choice(CRM2day)
| | | No excuse for CRM analytics excuses - With companies as cost-conscious as ever, proponents of CRM analytics must have answers for the critics. Gartner provides them.(SearchCRM)
| | | Blog-Based Analysts Shake Up IT Research - A new breed of IT analysts is sharing insights over the Internet, leaving traditional research firms trying to catch up using the same methods(InformationWeek)
| | | Call Center Reform - A widespread strategic reversal takes call centers away from cost cutting and toward - imagine! - customer service. Call centers of the future will be highly automated and globally dispersed, so they'll cry for the CIO's attention. Here's how several CIOs, such as Red Lion Hotels' David Barbieri, are meeting that future head-on.(CIO Magazine)
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"OUR TAKE"
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