Guide to Customer Relationship Marketing

Guide to Customer Relationship Marketing.

Leonard Berryin 1983 first coined the concept of relationship marketing. He considered it to consist of attracting, maintaining, and enhancing customer relationships within organizations. In the years that followed, companies were engaging more and more in a meaningful dialogue with individual customers. In doing so, new organizational forms as well as technologies were used, eventually resulting in what we know as Customer Relationship Management (CRM).

Relationship marketing is concerned with relationships that exist between any two stakeholders of a business. It involves relationship building with both external customers and internal customers. In an organization, relationship marketing can be at one of the following five levels — basic, reactive, accountability, proactive, and partnership levels. One-to-one marketing essentially involves knowing about each possible need of the targeted customers and developing tailor-made solutions for them. To implement one-to-one marketing, the marketer needs to identify the target customers, differentiate them into groups, interact with each customer group, and provide customized products and solutions in a cost-effective manner. This can be done using the technique of mass customization.

The success of the business largely depends on your relationship with the customer, the caliber of the sales and marketing personnel and the effectiveness of marketing campaigns. Customer Relationship Management (CRM) is the overall process of Marketing, Sales, and Service & Support within any Organization.

Customer knowledge, customer loyalty, and customer switching are three important concepts in CRM. The components of customer knowledge can be classified into three broad categories.

They are Knowledge about the customer, knowledge to support the customer, and knowledge from the customer. Customer loyalty can be either affirmative loyalty or reluctant loyalty. The level of affirmative loyalty is influenced not only by traditional factors, such as customers, product offerings, employees, and measurement systems, but on emerging practices such as electronic customer care. Eight different reasons have been identified for customer switching. They include (a) core service failures, (b) service encounter failures, (c) price failures, (d) inconvenience, (e) employee response to service failures, (f) attraction by competitors, (g) ethical problems, and (h) involuntary switching. The first five reasons in this list can be addressed with CRM techniques.

Implementation of CRM includes customer knowledge management, technology adoption and implementation, and performance measurement.

The customer knowledge management process is  cycle with four inter-related steps developing a customer-focused strategy; developing the customer buying process; implementing actions, tactics, campaigns; and customer learning.

 Technology implementation has become the key to CRM implementation in an organization as huge volumes of customer data can be stored, managed, and retrieved using the latest technologies. CRM Software Tools can be categorized into operational CRM tools and analytical CRM tools. When the performance measurement of the CRM activities is done using a carefully defined basket of metrics, it helps in managing and controlling the CRM initiatives in the organization. In the future, large enterprises are expected to opt for CRM applications, which have pre-built interfaces with standard ERP applications, while the small and medium business enterprises may continue to use stand-alone CRM applications. The usage of CRM is expected to evolve from ensuring operational efficiency (in customer handling) to yielding strategic benefits — through real-time customer segmentation, and co-creation of products with customers.

The main difference between RM and CRM is that the first does not acknowledge the use of technology, where the latter uses Information Technology (IT) in implementing RM strategies.

CRM software is used to support processes of storing information on current and prospective customers. Information in the system can be accessed and entered by employees in different departments, such as sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Details on any customer contacts can also be stored in the system. The foundation behind this loom is to progress services provided to customers to use the information in the system for targeted marketing and sales purposes. CRM is used to know your customer inside out, his behavior, buying patterns, then tuning your sales, and marketing efforts to attract the maximum customer base.

 A business manager is battling these questions with today. With a proliferation of brands in every market and with product differentiation becoming a scarce commodity, everyone is trying to build and nurture relationships with his or her customers. Moreover, concepts like loyalty, satisfaction, attrition, and retention have become hot topics with the business community.

The three phases in which CRM support the relationship between a business and its customers are to.

Acquire. CRM can help a business acquire new customers through contact management, selling, and fulfillment.

Enhance web-enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of one-stop shopping.

Retain. CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.

Marketing Automation

Target the best customers, manage marketing campaigns, and generate quality leads.

Sales Automation

Support the selling process from lead qualification to closing the business.

Sales force automation (SFA) software is a type of program that automates business tasks such as inventory control, sales processing, and tracking of customer interactions, as well as analyzing sales forecasts and performance. Businesses may have a custom version developed specifically for their needs, or choose from among the increasing number of sales automation software products. Sales automation software is sometimes called sales automation

Customer support Automation

Resolve customer issues after the sale responsively and professionally. The ultimate goal of Customer Service and Support Automation is to increase customer value while reducing the cost of doing business. As an integral part of CRM, Customer Service and Support allows organizations to manage business relationships effectively to improve and sustain customer loyalty and retention while reducing overall business expenditures. It allows businesses to identify issues, understand customer needs, track all interactions, and gain performance metrics.

Product Catalogue and configuration automation

Automate product configuration, catalogues generation, and online sales.

CRM initiatives fail, not because loyalty is difficult to build but because of a variety of other reasons—perhaps there was no buy-in from the employees, perhaps the expectations were too high or maybe it was just misunderstanding technology for a concept.

Marketing

CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone, and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect Relationship Management (PRM) solutions, which track customer behavior and nurture them from first contact to sale, often cutting out the active sales process altogether.

 Customer service and support

Recognizing that service is an important factor in attracting and retaining customers, organizations are increasingly turning to technology to help them improve their clients’ experience while aiming to increase efficiency and minimize costs. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems. The core for these applications has been and still is comprehensive call center solutions, including such features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities.

Analytics

Relevant analytics capabilities are often interwoven into applications for sales, marketing, and service. These features can be complemented and augmented with links to separate, purpose-built applications for analytics and business intelligence. Sales analytics let companies monitor and understand client actions and preferences, through sales forecasting and data quality.

Marketing applications generally come with predictive analytics to improve segmentation and targeting, and features for measuring the effectiveness of online, offline, and search marketing campaign. Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating buy signals, marketers can see which prospects are most likely to transact and identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole.

These types of analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other service and support channels, in order to correct problems before they affect satisfaction levels. Support-focused applications typically include dashboards similar to those for sales, plus capabilities to measure and analyze response times, service quality, agent performance, and the frequency of various issues.

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