Customer Relationship Management| LGMW01/10
Customer Relationship Management – Marketing Management
A firm’s marketing efforts are comprehensive strategies that encompass the marketing mix, segmentation, targeting and positioning, branding activities and integrated marketing communications, all targeted towards various consumer groups, both organisational and end consumers. These consumer-centric strategies have resulted in tailor-made marketing communications that work to attract, maintain and expand the consumer base. In this context, it is of utmost importance for firms to build a strong consumer base, keep them engaged and build loyalties through various customer-centric programs such that existing consumers are engaged, and new consumer relationships are forged.
According to Search CRM, customer relationship management (CRM) refers to practices, strategies and technologies that companies use to manage, record and evaluate customer interactions in order to drive sales growth by deepening and enriching relationships with their customer bases. Business Dictionary also defines customer relationship management as a management philosophy according to which a company’s goals can be best achieved through identification and satisfaction of the customers’ stated and unstated needs and wants and a computerized system for identifying, targeting, acquiring, and retaining the best mix of customers .
In its very essence, customer relationship management assists a business in profiling prospective customers, understanding their needs and wants, and building lasting relationships with them by offering them tailored or most suited products and enhanced customer service. It functions as an integrator between back and front office systems to create a wide database of customer details, past purchases, and technical support. This database is used to present a consolidated and unified face to the customers; it aids in improving the quality of relationship between the company and its customers.
Customer relationship management refers to practices, strategies as well as technologies and systems that are used by companies to manage and analyze customer interactions and customer-centric data throughout the customer lifecycle. This is undertaken with the goal to improve business relationships with customers, enabling customer retention and loyalty, and driving sales volumes. In this context, CRM systems are designed and implemented to create a database of customer information acquired through different channels or points of contact between the target consumers and the firm â€“ company or product website, direct or telephonic contact, web chats, direct mail, marketing collaterals, social and digital media. CRM systems equip sales staff with detailed information about customers – personal information, purchase history, buying preferences, feedback and concerns.
An effective CRM strategy is based on four pillars, and coordination between them is of the utmost importance to ensure CRM goals are met.
- Technology: this includes the technology required to support CRM such as software and hardware, digital and social media engagement platforms, comprehensive database systems to store customer information and so on. It involves the Integration of various company-customer touch points to deliver a single, real-time and data-backed view of each customer. It assists in development of the ability to sell what and when the customer is ready to buy according to ExpertAssignmentHelp.
- People: the users and information builders, their skills, abilities and attitudes constitute this pillar. It also involves empowering them, creating a self-serve capability and identifying the needs of the employees such that they can add value to the organisation
- Process: This pillar includes all the processes used by the firm to access and interact with customers to generate and convert new leads into new users. It also works to collaborate across customer and non-customer tiers, distribution channel intermediaries and suppliers to achieve the ideal value generation for each customer
Tiers of Non-Customers
- Knowledge and insight: Using knowledge about consumer buying patterns , consumer behaviour and industry trends to effectively reach out to and engage with the right set of customers
- Loyalty programs: Probably the most popular of CRM techniques, loyalty programs are widely used in the retail sector. Through loyalty programs, firms gain information regarding customer contacts, demographic profile, preferences and so on. Using CRM software, businesses can tie customer purchases to loyalty programs, and gain insights into what they are most likely to purchase and subsequently, tailor offers and schemes to these customers. In order to ensure repeat purchases, loyalty programs come with reward points that cumulate each time a consumer completes a transaction. These points can be redeemed against future purchases. The loyalty programs are best reflected via customer tiered programs. Retail chains like Target Australia use Coles reward cards to supplement their loyalty program
- Direct interactions: Another great way to build lasting relationships with customers, direct interaction involves face-to-face or digital interactions with customers at various points of contact with the company. This way, the firm has first-hand knowledge of what the customers want, their buying preferences and so on. It results in increased brand loyalty and generates positive word of mouth, as customers feel valued and taken care of. The customer-facing staff of Woolworths, Tasmania are encouraged to engage with customers during their shopping experience, to be able to address any issues, and create an favourable brand positioning
- Feedback: Soliciting customer feedback helps a firm identify its shortcomings; collecting feedback gives companies an insight into what customers seek from them. This will help in addressing the issue promptly, and forging fruitful relationships with the customers
A good CRM system is a well amalgamated system of people, technology, business outlook and customer engagement, backed by sales, marketing, support and feedback mechanisms. These help in creating engaging relationships with existing customers, identifying and acquiring new customers, encouraging repeat purchases and maintaining brand loyalty. The benefits of an effective CRM program include
- Identifying and categorising leads: A CRM system can help companies identify and add new leads with ease, and have them categorised accurately. A firm can create customised pitch documents in a lesser response time. Comprehensive, accurate, centrally held and data backed insights about customers and prospects will enable sales staff to effectively engage with the right set of consumers
- Increase in referrals from existing customers: A better understanding of customers will result in greater cross-selling and up-selling opportunities, and better customer service. This will result in satisfied customers, who are 33% more likely to become repeat customers
- Improving products and services: Data-backed and comprehensive information gives firms unprecedented insights into what customers say and feel about them so that they can improve on offerings, spot issues and rectify them quickly.
Other articles under blog series of “Marketing Management”
- Marketing environment
- Consumer behavior
- Organisational buyer behavior
- Market segmentation, targeting and positioning
- Branding and product development
- Marketing plan
- Customer relationship management (CRM)
- Consumer buying process
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