A business can generate profit only when it has a committed and faithful following of customers. In the cut throat environment of modern times, a Customer Relationship Management (CRM) system then emerges as a valuable tool to help build customer loyalty. CRM as the acronym suggests is all about managing the customer. If the customer is managed in an effective manner, the profit on a continuous basis is the logical by-product.
It does not matter whether your business is small, or you are running a large business, the longevity of your business hinges on the information you acquire about your customer. Profits can be maximized first and foremost on a continued basis by having returning, satisfied, customers. It can be done only through a personal touch.
Why is this important? It has been estimated that it costs more than 6 times as much to acquire a new customer than to retain an existing customer
This personal touch can be ensured through maintaining a database on the needs and preferences of your customers. Building a relationship of trust and understanding by knowing their needs and wants will help you and your customer develop a long term relationship, or more importantly, partnership.
One way you can build confidence with you customer is to give them first exposure to a new product, before it is opened for the general customer. As a matter of fact it has emerged as one of the most valuable tools in the hands of modern business outlets. Organizing personalized, pre-launch offers for committed customers, where the personalized touch makes their whole experience a pampered trip, builds a commitment within the customer to not only your products but your business relationship as well. The customer, who has been pampered in this manner, turns out to be a direct sales agent for your new campaign introducing this product, they in effect become part of your marketing team. New customers, brought in through this effort, become ‘pre-qualified’ through the efforts of you existing customers.
It is through the advent of CRM that it has come to light that nearly 65% of the customers…you are right the numbers are high…leave a business if they are not provided the kind of services they have become accustomed to. So here the CRM comes into play. The data base generated through CRM can be used in numerous ways:
Data that is generated through CRM can be shared across other units of the company and lessons so drawn can help in increased profits in other business outlets as well.
If the customer is a regular, as provided by your data base, then you can offer him some privileges at the time of billing for instance (discounts, credit terms, payments plans, etc…), and make him feel pampered as compared to other walk in customers.
When regular customers consistently order a given product, it may be possible to be proactive about your relationship and build an automatic order process whereby the customer does not have to initiate an order, but it is automatically sent when it is determined that they need new supplies. This requires trust not only on the part of the customer, but also on your own staff who must fulfill that order.
Ultimately, there are two separate, but related, goals to a CRM solution:
Build a database of information that can be used to generate increased profits for your organization
Cut down the attrition rate of customers from your business.
CRM helps in building a long term relationship with the client. This long term relationship is the foundation on which future profits can be built.
CRM is like ready mixed concrete on the move, if stopped it can destroy the whole project; but the constant churning of the concrete, the constant moving forward will ensure a project that meets the needs of the customer.
In the case of a business, the continual gathering of information, and acting upon it, will help us build a successful and profitable relationship with our customer.
CRM is the catalyst that provides this churn.
James Stephenson is an IT and Business Consultant with over 25 year of experience.
His firm specializes in helping small to medium sized businesses use their information technology and business resources effectively.
He can be reached through his websites and blogs at:
http://www.scc-i.com
http://www.ctrinformationmarketing.com
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