Customer Relationship Marketing: What Is It & Why Is It Essential To Your Business?
- Cara Wilson
- Jan 21
- 9 min read
Updated: Mar 31
Customers are the lifeblood of any business – without them, we simply wouldn’t exist. But are you truly putting your customers at the heart of everything you do? You might wonder what that actually involves. Beyond offering great products that meet their needs, it’s about understanding who your customers are and operating with a customer-centric mindset. By prioritising their experience from the very first interaction and throughout their journey with you, you can keep them happy, loyal, and engaged. This is the essence of Customer Relationship Marketing.
In this post, you’ll discover what Customer Relationship Marketing is, why it should be a core strategy for any business, and the essential components needed to get started.
What is Customer Relationship Marketing?
Customer Relationship Marketing (or CRM) is a strategy focused on building lasting relationships with customers. This is done by using personalised, data-driven communication to engage them at every stage of their journey with your brand. The goal is to foster loyalty and long-term business growth.
Here are the key components:
Utilising Data
One of the key parts of that definition is the term “data-driven”. The data you collect about your customers and their interactions with your brand is the foundation on which CRM is built. The data that sits in your database can indicate your customer’s preferences and behaviour, meaning you’re able to tailor your marketing campaigns and ensure they’re delivered at the right moments.
The topic of data can seem overwhelming and confusing. Some businesses may not be collecting any data or the right data. On the flipside, some businesses have so much data that they don’t know what to do with it. Whichever camp you fall into, sorting out your data and understanding what you have access to is fundamental to the success of your CRM strategy.
Personalising Communications
When you understand what data you have, this opens up the door to effective personalisation. Personalisation can be as simple using your customer’s first names in emails (although it is still alarming how many emails I receive that still get this wrong - e.g. “Dear Wilson” or “Hi Miss”). However, modern personalisation takes things further by using customer behaviours and preferences to deliver experiences that are not only relevant but also timely. This means responding to actions like browsing a product, abandoning a cart, or opening an email in real-time, creating interactions that feel seamless and tailored to each individual.
“90% of leading marketers report that personalization significantly contributes to business profitability” (ninetails)
Segmenting your Audience
Segmentation and personalisation are sometimes confused with one another but both are essential to your CRM strategy. While personalisation is all about the one-to-one style communication you can have with customers, segmentation is about grouping customers who may have similarities - think of this as more a “theme” for your campaigns. So for example you might want to create a segment of “frequent purchasers” and another of “one purchase only”. These segments are going to drive different marketing approaches and different messages.
Once you have your segment, you can then apply personalisation to make it individually relevant within that theme. Here’s something I wrote about Segmentation vs Personalisation that will give you a deeper understanding of how to apply it to your marketing.
CRM is Multichannel
While email usually sits at the foundation of customer relationship marketing, it is a multi-channel strategy encompassing email, social media, SMS and more.
Customer Relationship Marketing vs Management
Confusingly, both of these practices share the same acronym (CRM) so it’s not uncommon for the two to be used interchangeably. Customer Relationship Management focuses on the systems and processes for organising and managing customer data.
Here’s a breakdown of both so you have a better idea of how they differ from one another:
Customer Relationship Management | Customer Relationship Marketing |
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Why is Customer Relationship Marketing so Essential?
Here are five key ways Customer Relationship Marketing helps businesses to thrive in today's busy marketplace:
Builds Customer Loyalty
Like our personal relationships, customers tend to show loyalty to brands who demonstrate good communication, are trustworthy, respectful, and consistent. Receiving personsalised and relevant communication and offers makes your customer feel understood and appreciated - rather than just a £ sign to a sales person! Positive emotional connections to a brand are essential to long lasting customer relationships. Over time, these loyal customers are more likely to make repeat purchases and to act as advocates for your brand. This is super valuable as nothing does a better marketing job than positive word-of-mouth!
Improves Customer Retention
Keeping existing customers is far less costly than acquiring new ones. As part of your CRM strategy you can utilise automated messaging, feedback requests and targeted offers to keep your existing customers engaged, leading to a reduction in churn (i.e. the number of customers you lose). Ultimately this helps protect the bottom line!
Increases Customer Lifetime Value (CLV)
CLV is the total amount of money a customer is expected to spend with a business over the course of their relationship. Customer Relationship Marketing strategies are designed to maximise this value. The longer a customer stays engaged, the greater their lifetime value becomes. CLV is an essential metric for all businesses. It can:
help you understand how much to spend on customer acquisition
provide a way of segmenting your customers and tailoring your maketing i.e. you'll be able to identify your VIP customers from those who need a lot of nurturing
be a valuable guide for long-term marketing strategies
Enhances Customer Experience
As I mentioned earlier, personalisation is a key component of CRM and it's not just about personalising content. It’s about understanding and anticipating what your customers need before they even ask. By analysing data and recognising patterns, businesses can proactively offer solutions, recommend products, or provide helpful content that aligns with where customers are in their journey.
Think to times when you've gone through a buying process and you may have encountered a simple or helpful experience - did it make you buy again or recommend the brand?
“80% of consumers are more likely to buy from a company that provides a tailored experience” (ecommercebonsai)
Drives Continuous Improvement
CRM enables businesses to constantly refine their strategies. By tracking key metrics such as engagement rates, customer retention, and lifetime value, you can identify what resonates with your audience and adapt to their evolving needs. This ongoing process of measuring and optimising ensures your marketing efforts stay relevant, effective, and aligned with your business goals, driving long-term success. And it is particularly crucial in today's fast paced, tech driven world where things are changing rapidly and brands can easily be left behind if they don't have a sound understanding of how their customers engage with them.
What do you Need to get Started?
There are a number of important things you'll need to kick off your CRM strategy. They include the following:
Set Clear Goals
As with any marketing activity, you need to have clear and realistic goals in place before you start. These goals will guide your strategy and help you measure its success over time. Outline what you want to achieve - perhaps you're looking to increase customer retention? Or shorten the sales cycle? Your goals should align with your broader business objectives.
Access to Data
As you know by now, data is essential for delivering a personalised and timely customer experience. To create effective marketing strategies, you need to understand who your customers are and shape your approach based on the insights your data provides. Types of you data you'll want to consider using may include:
Demographic data: e.g. age, location, gender, language preferences, occupation
Sales funnel stage: e.g. visitor, lead, customer
Transactional data: this might include average order spends, total purchases, purchase frequency
Preferences: leverage preference centres (if available) to gather information about customers’ interests and communication preferences
Previous channel interactions: e.g. clicks, timing of interaction, lack of interaction will help you identify behaviour patterns, inform your messaging and highlight which channels are the most important for your strategy
These are just some examples to get you thinking and investigating what data you already have access to. If you don't have much data you'll need to start collecting it. But remember, only gather information that you’ll use and that is relevant to your brand, and always be transparent about how you plan to use this data for marketing purposes.
Technology to Power your Strategy
To implement an effective Customer Relationship Marketing strategy, you’ll need the right technology to support it.
Most of your customer data is probably already stored and managed in a centralised database. You'll need to ensure you have access to this so you can track behaviours, and gain insights to inform your marketing efforts.
Equally important is a platform that enables you to execute your multi-channel marketing campaigns. Whether it’s email, SMS, social media, or direct mail, your technology should make it easy to reach customers wherever they are and deliver consistent, personalised messaging across channels.
When choosing tools, look for systems that integrate seamlessly with your existing processes and offer automation features to save time and streamline your campaigns. Remember, technology should simplify your strategy, not complicate it.
Also remember that if you're just starting out, you don't necessarily need to pay for all of the bells and whistles straight away. It's wise to invest in a platform that gives you the flexibility to add features as you advance your strategy and skill-set. If you already have this tech in place, consider what you're utilising and what features may present untapped opportunities.
Cross-team Collaboration and Training
While this is a marketing strategy and therefore usually owned and managed by the Marketing Team, cross-team collaboration is essential to ensure alignment, data sharing, and effective execution. This means Marketing, Sales, Customer Service, Data & Analytics, Product, IT and the Leadership team all need to work together.
Making use of a RACI matrix is a good place to start so everyone knows their role.
This is also a good moment to mention that new strategies often bring new tools, so upskilling the relevant teams on how to use these effectively is another important consideration.
Understand your Customer Journey
As part of the strategy you'll map out your customer journey/lifecycle. This is an essential and helpful visualisation of your customers' experience. This means identifying each stage a customer goes through when interacting with your brand, from their first point of awareness to becoming a loyal advocate.
Once you’ve mapped out the journey, align your marketing efforts with these stages to deliver personalised and relevant messages that guide customers seamlessly through the process. Remember, the customer journey is rarely linear, so your CRM strategy should be flexible enough to adapt to individual behaviours and preferences.
Choose the Right Marketing Channels
The effectiveness of your CRM strategy depends on reaching customers where they are most active. Not every channel is right for every audience, so it’s important to select those that align with your customer demographics and behaviours.
With access to so many devices and platforms, it's important to understand which channels your customers are already using when they interact with your brand and how you are going to ensure they receive consistent and cohesive messaging wherever they are in their journey.
Summary
To have a successful CRM strategy, you must adopt a customer centric mindset and work to understand how your customers interact with your brand - from the moment they visit your website for the first time to when they have been a loyal customer for years.
To do this, you need to have access to the right data and the right technology. Both are fundamental to the analysis of your customer journey and to creating individually personalised communications that drive a deeper engagement with your audience.
While your strategy can be multichannel, you can simply start with email and think about how you can advance from there to deliver an improved customer experience.
Ultimately, you need to know where you are, to know where you’re going. Understanding the current landscape of customer interactions within your organisation is crucial to improving the experience. It’s not something one person in one team can do alone. It requires cross-team collaboration to bring to light the true picture.
I’ll be posting more blogs that dive deeper into the topics I’ve touched on in this post, so stay tuned! In the meantime, if you need help with your CRM strategy, feel free to drop me an email: hello@carawilsonmarketing.co.uk.