What is CRM?

CRM is a business strategy that aims to understand, anticipate

and manage the needs of an organisations current and
potential customers
It is a comprehensive approach which provides seamless
integration of every area of business that touches the customernamely marketing, sales, customer services and field support
through the integration of people, process and technology
CRM is a shift from traditional marketing as it focuses on the
retention of customers in addition to the acquisition of new
customers
The expression Customer Relationship Management (CRM) is
becoming standard terminology, replacing what is widely
perceived to be a misleadingly narrow term, relationship
marketing (RM)

Definition of CRM

CRM is concerned with the creation,

development and enhancement of
individualised customer relationships with
carefully targeted customers and customer
groups resulting in maximizing their total
customer life-time value

The purpose of CRM

The focus [of CRM] is on creating value for the
customer and the company over the longer
term
When customers value the customer service
that they receive from suppliers, they are less
likely to look to alternative suppliers for their
needs
CRM enables organisations to gain
competitive advantage over competitors that
supply similar products or services

Why is CRM important?

Todays businesses compete with multiproduct offerings created and delivered by
networks, alliances and partnerships of
many kinds
Both retaining customers and building
relationships with other value-adding allies is
critical to corporate performance
The adoption of C.R.M. is being fuelled by a
recognition that long-term relationships with
customers are one of the most important
assets of an organisation

Why did CRM develop?

CRM developed for a number of reasons:
The 1980s onwards saw rapid shifts in
business that changed customer power
Supply exceeded demands for most products
Sellers had little pricing power
The only protection available to suppliers of
goods and services was in their relationships
with customers

What does CRM involve?

CRM involves the following :
Organisations must become customer focused
Organisations must be prepared to adapt so that
it take customer needs into account and delivers
them
Market research must be undertaken to assess
customer needs and satisfaction

Strategically significant customers

Customer relationship management

focuses on strategically significant
markets. Not all customers are equally
important

Therefore, relationships should be built

with customers that are likely to provide
value for services

Building relationships with customers

that will provide little value could result in
a loss of time, staff and financial
resources

Markers of strategically significant customers

Strategically significant customers need to satisfy at
least one of three conditions (3):
1. Customers with high life-time values (i.e.
customers that will repeatedly use the service in
the long-term e.g. Nurses in a hospital library)
2. Customers who serve as benchmarks for other
customers e.g. In a hospital library consultants who
teach on academic courses
3. Customers who inspire change in the supplier

Information Technology and CRM

Technology plays a pivotal role in CRM
Technological approaches involving the use of
databases, data mining and one-to-one marketing can
assist organisations to increase customer value and their
own profitability
This type of technology can be used to keep a record of
customers names and contact details in addition to their
history of buying products or using services
This information can be used to target customers in a
personalised way and offer them services to meet their
specific needs
This personalised communication provides value for the
customer and increases customers loyalty to the provider

Information Technology and CRM: Examples

Here are examples of how technology can be used to create
personalised services to increase loyalty in customers:
Phone calls, emails, mobile phone text messages, or WAP
services :
Having access to customers contact details and their service or
purchase preferences through databases etc can enable
organisations to alert customers to new, similar or alternative
services or products
- Illustration: When tickets are purchased online via
Lastminute.com, the website retains the customers details and
their purchase history. The website regularly send emails to
previous customers to inform them of similar upcoming events
or special discounts. This helps to ensure that customers will
continue to purchase tickets from Lastminute.com in the future.

Information Technology and CRM: Examples

Cookies
A cookie is a parcel of text sent by a server to a web
browser and then sent back unchanged by the browser each
time it accesses that server. HTTP cookies are used for
authenticating, tracking, and maintaining specific information
about users, such as site preferences and the contents of
their electronic shopping carts
- Illustration: The online store, Amazon, uses cookies to
provide a personalised service for its customers. Amazon
requires customers to register with the service when they
purchase items. When registered customers log in to Amazon
at a later time, they are greeted with a welcome message
which uses their name (for e.g. Hello John). In addition, their
previous purchases are highlighted and a list of similar items
that the customer may wish to purchase are also highlighted.

Information Technology and CRM:

Examples

Loyalty cards
the primary role of a retailer loyalty card is to gather data about customers.
This in turn leads to customer comprehension and cost insights (e.g. customer
retention rates at different spending levels, response rates to offers, new
customer conversion rates, and where money is being wasted on circulars),
followed by appropriate marketing action and follow-up analysis
Illustration: The supermarket chain, Tescos, offers loyalty cards to its
customers. When customers use the loyalty cards during pay transactions for
goods, details of the purchases are stored in a database which enables
Tescos to keep track of all the purchases that their customers make. At
regular intervals, Tescos sends its customers money saving coupons by post
for the products that the customers have bought in the past. The aim of this is
to encourage customers to continually return to Tescos to do their shopping
CRM software- Front office solutions
Many call centres use CRM software to store all of their customer's details.
When a customer calls, the system can be used to retrieve and store
information relevant to the customer. By serving the customer quickly and
efficiently, and also keeping all information on a customer in one place, a
company aims to make cost savings, and also encourage new customers

Face-to-face CRM
CRM can also be carried out in face-to-face interactions
without the use of technology
Staff members often remember the names and favourite
services/products of regular customers and use this
information to create a personalised service for them.
For example, in a hospital library you will know the name
of nurses that come in often and probably remember the
area that they work in.
However, face-to-face CRM could prove less useful when
organisations have a large number of customers as it
would be more difficult to remember details about each of
them.

Implementing CRM

1.
2.
3.
4.

When introducing or developing CRM, a strategic

review of the organisations current position should be
undertaken
Organisations need to address four issues :
What is our core business and how will it evolve in the
future?
What form of CRM is appropriate for our business now
and in the future?
What IT infrastructure do we have and what do we
need to support the future organisation needs?
What vendors and partners do we need to choose?

Benefits of CRM

Benefits of CRM

Benefits to consumers

Drivers of successful CRM

Customer Value

Customer Satisfaction

Customer Satisfaction

Customer Retention

Customer Retention

Customer Retention

Relationship building

Building customer relationships is one of the nine

customer retention strategies you can use to improve customer
service and reduce customer churn.

Sam Walton, founder of Walmart was famously quoted as saying,

The goal as a company is to have customer service that is not just
the best, but LEGENDARY. Sam Walton

Those words couldnt be closer to the truth in todays competitive

business world and it is now more important than ever to build
customer relationships that add-value to the overall customer
experience.

A study by White House Office of Consumer Affairs found that 80%

of U.S. consumers say they would pay more to ensure a superior
customer experience.

Unfortunately for most businesses, they are making lots of customer

retention mistakes
They dont know how to create a customer experience that improves
customer service and increases satisfaction.
One of the fastest ways to improve customer service and reduce
customer churn is through building customer relationships that are
strong and sticky
Here are six tactics to assist organisations in building customer
relationships:

1. Communicate like a human-being

Sometimes, when Im speaking to a glassy-eyed, toneless customer
service representative, I cant believe the Japanese have finally
succeeded at making robots look so human+
Whats funny is many businesses make the mistake of training
employees to memorize greetings, sales pitches and apologies, when
all customers really want to do is communicate with you
When speaking with your customers, try to get face-to-face, make sure
you use their names, make jokes and be polite but conversational.
Avoid looking like a zombie and actually empathize and emote with
customers.
When using multiple communication channels, make sure the channels
are organized and reliable.

Every interaction with a customer is a great opportunity to focus

on building customer relationships
Think about it from your own personal experiences for a second.
When you start engaging with a company more than 10 times, you
naturally start building a loyal relationship with them
Its like anything in life. You build connections with people you spend a
lot of time around, whether that is your friends, work buddies or family.
Same applies when building customer relationships, it takes multiple
interactions
Always make communication as seamless as possible,
acknowledging, acting on and following up feedback where necessary
Todays customers are no longer passive and they want to be
listened to. Exceptional communication will improve customer service
and give you that point of difference from your competitors.

2. Learn about your customer

Building customer relationships is much like building rapport as a
salesperson. Just like a good salesperson, you need to know your customer.
You must remember the clients name, their needs and wants, what kind of dog
they own and so forth
The key to learning about your customer is to continue the conversation
after the transaction. After the sale, do a little research on them.
Connect on LinkedIn, find commonalities within your industries,
connections, job roles and more. Start thinking about ways you can add
value to them, whether that be through referrals, forwarding blog posts or
offering training sessions
In todays world the easiest way to differentiate your business is by the
customer experience you deliver, not the products you sell. Continuously
learning about your customer every time you meet will extend your customer
relationship beyond hi, how is your dog, and will go a long way to improving
customer service.

3. Live for customer complaints

Negative feedback and customer complaints give you the opportunity to hear what your
customers really think about your service. Complaints help you improve your service, give
you a chance to redeem yourself and, keep potentially toxic reviews from hitting social media
Thats provided you know how to handle and monitor customer complaints
One should actually like to look at customer complaints in a positive sense. You want
customers letting you know that you stuffed up. The last thing any business owner wants is
a customer keeping all their problems inside, telling a bunch of people and generally being a
nuisance
You want the opportunity to fix your customers problems. If they want to share their
painful experience with you, its your job to listen respectfully and pick out what you need to
know about the issue, and fix it quickly.
70% of complaining customers will do business with you again if you resolve the
complaint in their favour. When rectifying the situation, offer a heartfelt apology, thank the
customer for bringing the issue to your attention, and promise only as much as you can deliver
Be realistic about the solution to avoid disappointing your customer again, and then
work quickly to repair the problem. Building customer relationships is a two-way street, and
working through the problem areas together will make your bond stronger than it was before
the complaint began

4. Stay in regular contact with customers

The key to building customer relationships is to keep your eye on the ball
Every interaction with a customer should be treated as an opportunity to
monitor and build that relationship
Tell all your employees to treat every customer engagement as if you are
going to ask for a referral afterwards. It puts customer service in
perspective and goes a long way to delivering a superior service
By keeping in regular contact, you can track customer sentiments towards
your business, and rectify problem areas identified through your regular
communication
Its a frustrating truth that 96% of unhappy customers dont complain
when theyre unhappy, and 91% will simply leave and never return

4. Stay in regular contact with customers

Here are some ways you can stay in regular contact with customers:
Follow up with customers after meetings by phone, email, or even
social media
Send customers friendly reminders to show that you are
Forward through blog posts and videos that would be valuable to your
customers
Send customers a monthly email to keep them up to date with whats
going on at your company. Include product news, company news and
links to interesting content

5. Build trust with customers

Just like we have a committed , rewarding relationship with
a friend , a dog or a hamster , a customers trust and
commitment is built in the same manner
Commitment is as an essential ingredient for successful
long-term relationships
Developing a customers commitment in business
relationships does pay off in increased profits, customer
retention, willingness to refer and recommend
Relationship marketing literature suggests customer
satisfaction and trust as major determinants of commitment

5. Build trust with customers

The Impact of Satisfaction, Trust, and Relationship Value on
Commitment
Here are three tips to build trust in your customer relationships:
Show compassion in your actions affecting the relationship
Be honest, credible and keep your integrity (if you say something,
make sure you do it, on time!)
Show you have the competence to act for the mutual benefit of your
relationship
Its essential to exhibit these characteristics, because trust diminishes
the perceived risk and vulnerability in a partnership, leading to
increased customer satisfaction and reduced churn
If you dont act in your customers best interests, lie to hide your flaws
and make heaps of dumb mistakes, your customer will realize you cant
be trusted, and abandon your business relationship

6. Practice inbound marketing

Traditional Outbound Marketing has focused on going to where customers
live and interrupting their day to show them your products and services (i.e. TV
ads, blanket emails)
When you practice Inbound Marketing, customers come to you. Its commonly
known as pull-marketing as opposed to push-marketing and is a great tactic to
help with building customer relationships
This can be achieved by creating really valuable content that solves your
customers real-world problems. Use mediums like blog posts, videos, eBooks
and whitepapers. Share your content on the web through social media and by
engaging in relevant online communities
Inbound marketing costs 62% less per lead than outbound marketing and is a
generally considered a lead generation tool . It can actually help you build stronger
customer relationships. It keeps the conversation going by feeding customers
useful content

Building customer relationships

improves customer service
Can you afford to lose a customer due to poor
customer relationships?
By focusing on these six tactics, you can start
building strong relationships with your customers
that extend beyond the bare product or service
You can improve customer service that builds
sticky customer loyalty and reduces customer
churn