by Michael Totten

Created on: June 22, 2010

Before 2009, Toyota's customer retention strategy of 'Lean CRM' had been a model for the entire car manufacturing business. When it was time to replace a car, over 60% of Toyota customers returned to Toyota. The company's internal marketing bible, "The Toyota Way in Sales and Marketing," states that Toyota’s success depends on totally satisfied customers. Lean CRM reasons that the best way to totally satisfy a customer is to know what the customer wants even before the customer knows he wants it.

When Lean CRM was first implemented, Toyota already had a large collection of customer feedback and other information, which it had been gathering through regular customer touch-points after the initial sale. This library of customer information gave Toyota detailed insight into the customer lifecycle. It also gave Toyota an early heads-up to changes in individual customer behavior.

By responding appropriately to each of these changes, Toyota was able to increase its repurchase rate and sell more vehicles. At the same time, Toyota was able to reduce its overall marketing costs by as much as 80%, because Lean CRM marketing is tightly targeted and less marketing material is wasted. Lean CRM accomplishes this goal through 3 parts: customer pull, Toyota push, and customer DNA.

Customer pull

A customer is highly responsive to marketing information when he is just starting to think about buying a new car. All of Toyota's marketing guides prospective customers to the Toyota website, where they can research various cars. The prospective customer first becomes known to Toyota when he requests further information. Because this touch-point has been initiated by the customer, it is known as customer pull.

At this point, the request triggers an automatic check to see if Toyota already knows the customer. This information will determine how Toyota employees can best deliver Toyota-initiated touch-points.

Smart Toyota push

What Toyota already knows about the prospective customer will shape how Toyota communicates with that customer. Vehicle information which is sent out is tailored to the prospective customer's known preferences. Toyota may even offer a customized deal or pre-approved credit to the prospective customer.

Where the prospective customer is not previously known, Lean CRM uses statistical models and data analysis to determine which models are likely to be most appealing to each prospective customer, as well as the type of information each person is likely to value.

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