CRM or Customer Relationship Management simply means the methodology or the process of building stronger relationships with existing customers. This can be helpful for any business specially in knowing their customer’s needs and behavior. Many businessmen take this for granted and stay under the impression that once they have served a customer, he or she, will stay with them. But this is where they go wrong. Then after a couple of years they open their old customer’s files and are left wondering where they suddenly disappeared. A customer can desert you on many grounds including you not caring enough for them or because of an unresolved complaint. In fact, these 2 are the biggest reasons for the customers to shift to competitor’s products.
Here’s why CRM success is important:
CRM Gives a 360 Degree View of The Customer
Statistics prove that: a. Repeat customers spend 33% more than new customers.b. Referrals by old customers are 107 % more than new customers. Maintaining existing customers is extremely crucial and its not secret now. 80% of marketing budget is allotted to CRM in most big companies. Every part of your organization which is related to the customer should be integrated. A 360 degree approach or the end-to-end customer management also takes into account the following things:
Executive management contact with key accounts
Customer support functions, such as a help-desk customers may call for technical support
Customer service functions, such as billing and accounts receivable
CRM Is a Mindset And a Philosophy
CRM is not a tool, although many aspects of the customer relationship can be automated using packaged or customized software solutions. In fact, CRM is just a part of the equation that includes changing business practices to focus more on customer needs and re-organizing databases so customer data is made available easily.
Implementing CRM Requires Patience
Most businesses start expecting results soon. But it is required that they understand that a CRM software solution can only give them an estimate as to how much time will it take to implement the change. The reality is that it takes much longer than estimated for the people to get used to the change. CRM cannot take place overnight.
CRM= Customer Analysis
Any marketing strategy which loses out on the “CRM” aspect is sure to be a failure in today’s business world. Customer is the GOD for the company. It is important to carry out a detailed analysis to find out the buying habits and the reasons of their decision making. For eg. – You may find out that a particular group of customers is interested in buying a set of products. Then when you get a new customer with the same buying characteristics, you can try to up-sell something that goes along with it as well.
CRM For Optimizing The Timing of The Sales
When going into depth, CRM can actually help you customize the sales cycle for the individual customers so that you have the best chance of completing the sale. The customized sales cycle is flexible to meet the needs and motivations of the individual customer and is based on tracking the results of similar customers in the past.
CRM For Future Customers
Holding back the rights of CRM can be very dangerous for a company’s existence. UPS went through a low phase during 1997 because of a strike. Their major customers were forced to shift to the competitors. Ay this point, UPS only had one thing in mind “Win back the customers or die”. After successfully clearing off the strike, UPS sent an apology letter to all the customers accompanied with personal phone calls expressing their apology for the inconvenience caused to them. This helped them gain 87% profits following the year strike took place. So until and unless the existing customers are made happy, new ones will also not stick.
It is quite clear the role that CRM carries with itself. A company’s future depends on the way it deals with its customers. The customer should never be in a situation where he/she is left wondering “Why did the owner not call or send an apology for the inconvenience caused by him?” A well designed CRM can cut down the costs in long run by more than 50%. This can further help the businessman to identify potential sales opportunities. Suggestions and comments are welcome!
Ahh CRM. One of my favorite subjects. You bring up great points. Perhaps something you could expand on is how changes in technology effect CRM methods and implementations. I am a big believer in web based CRM systems because users never have to be in one place to learn about and manage relationships with customers.