The term Customer Relationship Management (CRM) has been around for many years but it is often misunderstood what CRM actually is, and the business benefits it can provide. A common misconception is that CRM is a technology, but this is only one part of the overall strategy. In fact, CRM incorporates every aspect of the business including organizational culture, people, processes and technology to identify, acquire and grow high-value customers.
However, the following are some reasons why you should use effective customer relations strategy on how to keep customers happy.
Improves relationships and reduce defection
Usually, CRM involves aspects including people, culture, processes, and technology. These all need to be interlinked to create a customer led business with the focus being on providing an outstanding customer experience. Ensuring that the entire organization is geared towards servicing the customer will lead to improved relationships with them and also reduced defection. This includes making sure your staff are empowered to deal with customers to a high level of service and that processes are in place to make sure this can happen.
Maximize up and cross-selling
Generally, the CRM effectively requires the businesses to engage and also interact with all their prospective customers and also to identify customer’s needs, and purchase behavior. These details can be stored centrally in the customer relationship management system, meaning that all sales staff has visibility of this information. When done correctly, giving staff the correct training to spot an opportunity, this will allow businesses to maximize the up and cross-selling potential of a customer.
Identify high-value customer and prospects
An effective CRM strategy will allow you to identify the groups of customers which provide the most profit to the organization. With this information, businesses will able to make sure that these high-value customers are serviced as effectively as possible to ensure a strong relationship and also to make them happy.
A better understanding of your customer’s needs and behaviors will allow you to identify the right times to market to your customers. If they upgrade their mobile phone every two years, for example, it might be a good time to contact them 3 months in advance of this date. As CRM gives insight into the most profitable customer groups, this information can also be applied to target similar high-value prospect groups. By targeting high-value prospects, at the right time, marketing resources are optimized. Concentrating on only valuable prospects will also ensure that you don’t waste time on customers that are less profitable, or worse, cost your business money.
Maximize customer lifetime value
At the initial point of sale, a customer is usually less profitable due to the acquisition costs associated with that customer. The longer they are is with the business, the more profitable they become the resources to up and cross-sell are reduced due to the existing relationship with the customer. Customer lifetime value is maximized as CRM helps improve and therefore lengthen the relationship with a customer while maximizing the revenue generated from up and cross-selling.
The above are some of the reasons why you should use effective CRM strategy in order to make the customer happy.