580 The Marketing Book
exclusive group, one in 25 of them rent a car 10
times or more in a year. This group, amounting
to one in 100 customers (0.2 per cent of adults)
is worth 25 times as much as the average
customer. These extremely valuable customers
provide car rental companies with a quarter of
their business.
Pareto and the database – American
car rental market
20 per cent of American adults rent a car at
least once a year.
Only 5 per cent rent a car more than once.
0.2 per cent rent a car 10 or more times.
This 0.2 per cent represents one in 100
customers.
One in 100 customers provide car rental
companies with one-quarter (25 per cent)
of their business.(Data from Peppers and Rogers, 1993)It would be cheaper to telephone these
customers personally to thank them than it
would to reach them all once with a TV
commercial.
Recognizing the value of these super-
customers, car rental firms offered loyal users
free rentals at weekends. But frequent business
travellers want time with their families. When
this idea failed, National Car Rental came up
with a better idea. Targeting the tired, stressed
and status-conscious business traveller, their
answer was the Emerald Club, having its own
aisle in National’s car lot at the airport. Members
could pick any car in the Emerald Aisle and
drive off, pausing only to have their card
‘swiped’ at the checkout.
National’s database enabled them to:
recognize how much more valuable their best
customers were than others;
discover how much business was at risk if
these customers were lost (it would take 33
average new customers to replace one lost top
customer);
recognize the circumstances of these
customers, i.e. frequent business travellers;
send Emerald cards to the right customers.Notice that the database is used to provide both
management information and the means of
communicating to customers.The customer marketing database serves two
functions:1 It provides management information.
2 It facilitates one-to-one customer
communications outbound and inbound.The customer marketing database not only
facilitates outbound communications but
enables customers to be recognized when they
telephone or visit the website. The contact
centre agent (operator) can call up the custom-
er’s transaction record on screen so that the
customer does not have to repeat information
that the company should already know.Data warehousing, CRM and e-CRM
In recent years, many large companies have
been dealing with the problem of integrating
data from a multiplicity of management infor-
mation systems. The ideal solution of bringing
together all relevant customer information into
one Customer Marketing Database System was
not available to these companies. The systems
they used in different parts of the business were
incompatible.
Considering the categories in Figure 22.6 –
Accounts, Sales, Marketing, Buying, Distribu-
tion, Customer service, Stock control and Credit
control – we can see these might all provide
information for the marketing database.