The Relative Functions of Branding, Marketing, and CRM
By Tom Dougherty
The single most important distinction managers must make in the segmentation of the target group for any brand is the distinction between prospects and customers. This is because these two groups play very different roles in the business-building program of the brand.
The Steps To Increase Market Share
There are two broad strategic activities involved in increasing a brands’ market share: increasing revenues and avoiding losing revenues the brand has already won. Creating preference for a brand will never increase its revenues if it does not keep growing its market share. In addition, a brand will never grow its market share if it keeps losing more customers (and therefore revenue) than it is winning.
There are two broad ways to increase revenues: converting more prospects into customers and getting existing customers to use more of the brand’s products or services. In addition, there are two broad ways to avoid losing revenues brand’s are already winning: avoid disappointing customers in the experience of the brand’s products or services and avoid disappointing customers in all of the other experiences they might associate with the brand of the above strategic functions, the first, that of converting more prospects into customers, is by far, most difficult.
This is because this function involves overcoming two monumental barriers: prospects are already engaged in using a competitor’s products or services and they therefore have little or no interest in any kind of relationship with a new brand.
Show Me The Money
The function of converting prospects into customers is primarily focused on the people who possess the money that is not yet being transmuted into your brand’s revenues. It is therefore, the most important function toward increasing the market share of the brand. Prospects have to be made to notice your brand and to see your brand as important.
They have to be made interested in your brand, desire your brand, and to prefer your brand to its competitors. Ultimately, of course, they have to be made to purchase your brand, which is when their money becomes your brand’s revenues. The remaining strategic functions, increasing current customers’ usage and the avoidance of disappointing them through their interactions with the brand’s products/services, are relatively easier.
This is because they involve dealing with people who, as existing customers, are already in a relationship with the brand and therefore have a higher degree of receptivity toward the brand. Indeed, with the advent of today’s interactive media, it has become easier to know customers individually by name, their geographic location, their contact preferences, their demographics, and their psychographics of values, interests and other preferences.
Transforming Prospects to Purchasers
Coming back to the first strategic function, that of converting prospects into customers, managers, quite literally, have to transform the prospects existing disinterest towards a brand they do not use into a relationship with that brand. (Read about switching triggers here)
This extremely difficult business challenge involves answering two key marketing questions, WHAT and HOW. The WHAT is answered through branding, and the HOW is answered through the use of marketing tactics – advertising, sales promotions, merchandising, pricing, distribution, packaging, and other marketing and communications media and activities.
Branding, CRM and Marketing — Advantage: Brand is overlooked
Branding is the most important of these. This is because it is the one that comprises the cluster of concepts and signals that have the challenge of overcoming the greatest barriers – those of their disinterest and pre-existing preferences and habits – between the brand (its products and services) and the prospect.
Branding answers the WHAT by giving the products and services a foundation upon which to sit, that provides the launch point for all other marketing activities. Branding gives products and services permission to be important in the lives of prospects, therefore making the products and services more meaningful to the target. The HOW or the disciplines and media of sales, advertising, sales promotions, distribution, pricing, merchandising and packaging, etc. — then have to deliver the brand to the prospect so that it can break through the barriers of disinterest and prior practice.
CRM Will Not Increase Market Share
CRM (Customer Relationship Management) should cover all the HOWs involved in maintaining and strengthening the relationship with the customer, once branding and marketing tactics have broken through and established the relationship. CRM must remain consistent to the brand, which lives on in the customer as a cluster of promises of self-definition, expectations and performance.
Just as the previously mentioned functions of sales; marketing, and communications must deliver the brand through media and locations, CRM must deliver and stay true to the brand through all the human and other interactions with the customer. It must be noted that CRM can also contribute indirectly to increasing revenues and market share as well. By fulfilling the brand promise to the customer via experiences so that customers are delighted enough to make the effort to recommend it to other people, CRM can also contribute towards increasing the brand’s market share.
Brand Management Requires Creativity
Every element of the functioning relationship with the customer including the ease of opening the package, the ease of use of the product, the performance of the product, the messages received by the customer, and the experiences of the customer with customer service staff, billing staff, credit control staff, collections staff, and vehicles bearing your brand’s logo.
It must not only avoid negative residue, but also be regarded as brand communications delivering all of the promises of self-definition, expectations, and performance the brand was built upon.