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CRM - What, Why and How?

  
 


If you are serious about identifying, attracting, winning, developing or keeping the kind of customers that are the most lucrative to you, then you are by definition, talking about customer relationship management (CRM). In fact, every business interested in repeat business should be investing in CRM.
 

 

 

 

 


Serious about identifying, winning, developing or keeping your most profitable customers? Then you are already interested in customer relationship management. All repeat businesses should be. Some common arguments:

“Customer Relationship Management is a fad, a piece of hype”

Well it is true, many waffle about it rather than provide practical methods for CRM, but it has been going on for thousands of years!

“Customer Relationship Management has nothing to offer my company”

It is often implemented without sufficient business focus and then delivers poor financial payback or customer value.

“Customer Relationship Management is risky”

It can be risky if handled badly. But so is crossing the road with a blindfold on – that is the equivalent of doing CRM without focussing on proper methodology. Not all CRM projects have to be expensive, lengthy or risky - the best options to invest in are often inexpensive and deliver quick wins within a structured long term strategy. It’s all in the approach.

Investing in CRM can massively increase profitability:

 

Existing customers frequently spend five times more than new customers.
 

Satisfied customers refer a few new customers but dissatisfied customers tell several people to steer clear.
 

Over 90% of dissatisfied customers who leave go without saying a word.
 

It costs five times as much to acquire new customers than to retain existing ones.
 

Increasing customer retention by 5% can increase overall profitability 25% – 95%.
“I haven’t got time to look at customer issues – that’s for the good times”

Not really. In a highly competitive, slow growth economy, how important are the following:–

 

Identifying your most profitable and biggest loss making customers?
 

Retaining the most profitable customers?
 

Retaining your best revenue / profit generating people?
“Times are tough – I need to cut costs”

Absolutely. Marketing, sales and customer services are significant percentages of total costs. But it’s no good cutting customer service costs if repeat orders drop by a 1/3. Done well, investing in customer relationship management can improve revenues AND cut costs.


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