Customer Relationship Management Success Starts Here

Approaching customer relationship management with the right perspective is very important if your ultimate goal is to achieve success through high ROI relationships with your customers. This can happen only when you find a strategy that works to lengthen the customer lifecycle and thereby increase potential future customer value to your business. There is a strong case to make that listening to your customer, either by directly asking them, or watching their behavior, and then delivering what they want and when the want it, is the key to the improvements you are looking for.

Higher Margins With Existing Customers

Believe it or not, there are businesses out there that focus almost solely on finding new customers. I guess if you're selling a novelty item, you only get one chance. The Pet Rock comes to mind from my childhood, as do Mood Rings. For some reason I never felt a need to purchase another one. But imagine if Pet Rocks wore out, and it was something we needed. What would that be like?

Many businesses know what this is like. Whenever there is a profit involved, competitors will find a way to compete with you. And this drives your cost of acquiring new customers up! So for most business owners, keeping customers loyal is a great way to keep customer acquisition cost low on average. Each repeat sale only costs you what it takes to retain them. Make sense?

The key to customer relationship management is figuring out what you need to do to keep them, and that's not always so easy.

The Information You Need To Plan For Customer Loyalty

Every business is different and has different types of customers with different media for selling products and services. Many businesses sell directly online, others have retail outlets and others still have partner channels. Understanding your customers wants and needs varies differently across such channels.

Online consumer marketing has many similarities to catalog marketing. Relationship marketers will study customer activity using recency and frequency models to determine who to send a message to, what the message should be and when to send it. I talk about this a bit in my customer tracking page.

Companies that sell thru partner channels may employ other means by working with their partners, but activity monitoring (if they actually know who the end customer is) can work here is well. In fact, the resellers are customers too, and their loyalty is paramount to success as well.

Some businesses will execute focus groups and/or do customer surveys so they get an understanding of what their customers want from them. Web 2.0 has allowed many companies, the ones willing to do so publicly, to allow customers to interact directly over the web in a public and collaborative way. This sort of information is highly valuable to a customer-centric busines.

Deploying Your Customer Relationship Management Plan

Once you have gathered your customer information you can begin the process of developing a customer relationship management plan. My CRM strategy section covers this in more detail, but the essence is to focus on the following areas:

• Identify the financial goals of your business
  
  
• Identify the risks of this initiative, both short and long term
  
  
• Identify what you will measure, how you will measure it and how you will evaluate the results
  
  
• Identify how you will use your results to make the appropriate changes to your initiative over time

It sounds pretty simple, but remember that it will likely take a great deal of effort to do this right. But, in the long run it's worth it. It's almost like having a crystal ball because you will know what to, who to do it for, and when. And that will keep your costs low, your margins high and a happy, loyal customer base.

Return to CRM Definition From Customer Relationship Management

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