The hidden cost of mass retailing. By Robin Tidd

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In past articles I have referred to 'cost per lead, cost of conversion, cost of maintaining customer relations and customer performance'.

When an organisation sells regularly or spasmodically to hundreds, even thousands of customers, the financial analysis and management of the sales resource and other costs is complex. Often a business has a mix of a small number of large customers and a large number of medium or small customers. If many customers are worth less than 10,000 per annum, resource management becomes critical. The cost of field sales, expenses, sales admin, telephone contact management and direct mail involving thousands is very much a numbers game. It may appear that sales are going up and the overall gross margin is there, but a small annual gross margin per customer may be w...

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By Anonymous
28th Nov 2006 16:20

Response to Robin Tidd's article
In my experience of the financial sector, institutions have made understanding their customers a high priority but for many there are still gaps in the information framework. This means that some companies struggle to understand the real value of an individual customer relationship.

We conducted some research with the Institute of Financial Services that found 77% of respondents believe that there are significant gaps in the ability to measure customer value and 92% of respondents stated that past CRM projects put too much emphasis on sales versus developing long-term value from the customer.

There’s now a growth in marketing applications which means that an increasing number of large financial enterprises will be investing in marketing resource management (MRM). However, organisations that fail to align MRM initiatives with corporate performance management investments or projects run the risk of creating a new silo of marketing applications that don’t link marketing activities with corporate objectives.

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