CUSTOMER RELATIONS
CUSTOMER RELATIONSHIP MANAGEMENT
DEFINITION OF CRM
A comprehensive strategy and process of acquiring, retaining and partnering with
selective customers to create superior value for the company and the customer.
About attracting, developing, maintaining and retaining profitable customers over a
period of time.
It relates to strategy, managing the dual-creation or value, the intelligent use of data and
technology, the acquisition of customer knowledge and the diffusion of this knowledge
to the appropriate stakeholders, the development of appropriate (long-term)
relationships with specific customers and/or customer groups and the integration of
processes across the many areas of the firm and across the network of firms that
collaborate to generate customer value.
IMPACT OF CRM ON MARKETING
Role of CRM in Marketing
When it’s used properly, CRM is integrated into a comprehensive marketing
strategy. If it’s treated as a stand alone solution, it lacks the synergy it needs
to deliver measurable results. As a business owner, it’s vital to understand
the role of CRM in marketing your products and growing your customer
base.
Customer Focus
Mission statements aside, many businesses are so focused on products and
processes that they neglect customers. When CRM is the cornerstone of your
marketing strategy, you are forced to refocus your messaging on customers.
Market Data
CRM is a tool for collecting real-world market data about your customers.
With adequate collaboration, your marketing personnel can then use that
data to coordinate campaigns that are in tune with target markets.
Customer Relationships’
What CRM is all about. But the process of building customer relationships is
what marketing should be about, too. Marketing efforts that leverage CRM
have the net effect of incorporating the goal (I.e. relationships with
new/existing customers) into the beginning of the marketing process.
Tracking
CRM lets you track effectiveness of your marketing campaigns. The feedback
and sales metrics that emerge from CRM data capture can quickly and easily
identify the marketing strategies that were big hits with your customer base.
Brand Loyalty
Another benefit of CRM is that it helps you maintain an emphasis on
improving brand loyalty and customer retention. Too often marketing efforts
over-emphasize the acquisition of new customers at the expense of the
existing customer base.Since it is significantly easier to retain a current
customer that it is to acquire a new one, CRM should be an easy sell for your
marketing department.
Deeper engagement
Customer engagement is a key element in branding and loyalty initiatives.
CRM has the potential to take your company and your products deeper into
the lives of your customers in ways that traditional marketing or advertising
resources can only dream about.
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CUSTOMER RELATIONSHIP MANAGEMENT
CRM vs. TRADITIONAL MARKETING
Traditional marketing focus on the four P’s (price, product, place and promotion) for
increasing market shares through increase in the volume of
transactions between seller and buyer.
Customer relationship management focus on using strategies, procedures, tools and
technology for promoting the relationship between the seller and
customer so as to increase sales revenue, profitability and customer
satisfaction.
KEY COMPONENTS OF CRM
1. Sales Force Automation
most essential components of CRM. This is one such component that is undertaken
by the maximum business organizations. It includes forecasting, recording sales
processing as well as keeping a track of the potential interactions.
2. Human Resource Management
it involves the effective and correct use of human resource and skills at the specific
moment and situation. This requires to be make sure that the skills and intellectual
levels of the professionals match the tasks undertaken by them, according to their job
profiles.
3. Lead Management
refers to keeping the track of the sales leads as well as their distribution. The business
that are benefited by this component of CRM the most are the sales industries,
marketing firms and customer executive centers.
4. Customer Service Customer
relationship management emphasizes on collecting customer information and data,
their purchase information and patterns as well as involves providing the collected
information to the necessary and concerned departments. This makes customer
service an essential component of CRM.
5. Marketing
one of the most significant component of CRM and it refers to the promotional
activities that are adopted by a company in order to promote their products. The
marketing could be targeted to a particular group of people as well as to the general
crowd. Marketing involves crafting and implementing strategies in order to sell the
product. CRM assists in the marketing process by enhancing and improving the
effectiveness of the strategies used for marketing and promotion.
6. Workflow Automation
a number of processes run simultaneously when it comes to the management and
this requires an efficient cost cutting as well as the streamlining of all the processes.
The phenomenon of doing so is known as Workflow Automation. It not only reduces
the excess expenditure but also prevents the repetition of a particular task by
different people by reducing the work and work force that is getting wasted for
avoidable jobs. Routing out the paperwork and form filling are some of the elements
of the process and it aims at preventing the loss of time and excess effort.
7. Business Reporting
CRM comes with a management of sales, customer care reports and marketing. The
customer care reports assist the executives of a company to gain an insight into their
daily work management and operations. This enables one to know the precise
position of the company at any particular instance.
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CUSTOMER RELATIONSHIP MANAGEMENT
8. Analytics
process of studying and representing the data in order to observe the trends in the
market. Creating graphical representations of the data in the form of histograms,
charts, figures and diagrams utilizing the current data as well as the one generated in
the past is essential to achieve a detailed understanding and study of the trends.
Analytics is an extremely significant element of CRM as it allows to make in-depth
study to information that is required to calculate the progress in the business.
CUSTOMER ACQUISITION
Customer Acquisition Management is the set of methodologies and systems to manage
customer prospects and inquiries generated by a variety of marketing techniques.
Customer Acquisition is the process of acquiring new customers for business or
converting existing prospect into new customers. Acquiring a customer depends on how
effectively the organization is able to build a comprehensive relationship with that
customer.
COST FORMULA
CAC = TE/NC
CAC means Customer Acquisition Cost
TE means Total Expense (attract,engage and convert new customers)
NC means Number of New Customers acquired
Or
Customer Acquisition Cost = Costs Devoted to Acquiring New Customers / Number of New
Customers
CUSTOMER RETENTION
Customer Retention strategies. They may help you if you implement them.
1. Treat your customer with respect
In every aspects of life especially when it comes to having your customers continue to
do business with you, your client or customers must be treated with due respect. You
should also give the attention they need. When they are happy, they do more
business with you. They tell their friends. You make more money. It really is that
simple.
2. Listen to what your client needs
The relationship between you and your clients is essential. As an entrepreneur, you
must be open to modifying your relationship according to what will serve the
customer most. Your relationship should be nurtured and cultivated with acceptance,
so that you are skilled in listening to what matters to your customer. Listening to
what your client needs is one customer retention strategy that will be enable you to
generate and keep more customers as you grow. That is the key benefit of customer
retention.
3. Implement a client retention program
Incorporating a client retention program into your company is one of the best
strategies for keeping your clients in your services. Above all, a customer retention
program and a reliable customer retention strategy create a huge advantage, not just
CUSTOMER RELATIONS
CUSTOMER RELATIONSHIP MANAGEMENT
for you, but for your clients as well. Customer retention helps to promote your
products and services, and it also enables customers to rely on your services in the
long term, instead of worrying about how long you will be in the business for.
Customer retention management programs like these encourage your client to stay
with you and prosper from a mutually beneficial relationship. This is also a great way
to meet your expansion goals by offering an opportunity for customers to benefit
from the growth of your business.
CUSTOMER ENGAGEMENT
While maintaining customer is one factor, developing new loyal customers is another
factor that should be looked into regarding customer retentions management. This means
that we are looking for new ardent customers that can turn them into brand advocates that
can carry the brand or the company to a new whole audience through word of mouth
marketing or referrals.
CUSTOMER DE-SELECTION
Unknown to many, businesses should also be wary of customers that can bring down
the company’s overall value. Not all customers are good for the organization as some may be
too disruptive, costly, tenuous to retain. So it also important part of customer retentions to
select customers is some situations.
THE VALUE OF CUSTOMER
Loyal customers are more valuable than others because of the overall value they
bring to the company. Customer Loyalty also brings more income by turning the customers
themselves as brand advocates or evangelists the push the brand beyond its marketing reach
at zero cost.
Reasons for losing customers (Reasons for Failure)
1. Negligence of their concerns
2. Fraudulent claims such as false advertising
3. Failing to meet customer standard or expectations
4. Service incompetence
5. Wrong pricing
6. Blaming them
7. No method of communication with customer
8. Lack of marketing
9. Not replying to customer inquiries
10. Discrimination
11. Insensitive Marketing
