Continuous relationship marketing (CRM) is widely used in business-to-consumer marketing, where it has proved effective in a variety of industries including financial services, telecom, healthcare, and media.1 Yet most large companies have only recently begun to apply the technique in marketing to small businesses, even though there are more than 5.5 million firms of 500 or fewer employees in the United States. Annual sales between large and small businesses reached $9 trillion (or two-thirds of the nation’s total commerce) in 1996, and small businesses are often a large company’s most profitable customers, with a lifetime value three or four times that of the average consumer.
Until recently, firms had legitimate reasons to overlook CRM as an approach to small business marketing. The data often needed to drive a CRM program was poor or unavailable, and conflicts arose between the personal relationship sales and service channels that have long dominated business-to-business marketing and the new alternative channels that are frequently used to capture the full value of a CRM strategy. Resourceful and determined marketers are only now finding ways to overcome these obstacles (Exhibit 1).
What is CRM, and who uses it?
CRM is a data-driven approach that enables...