Customer Relationship Management seems to have become the Buzzword of the Year…for the past several years. However, buzzword or not, CRM is relevant to your business — because it’s relevant to every business.
So, what is CRM and why does it matter to your business? Google CRM and you can find hundreds, if not thousands, of definitions and perspectives. The definition my clients have found most useful is:
A data-driven approach to delivering personalized customer interactions across all touchpoints, with the aim of establishing an ongoing dialogue and relationship that maximizes value for both parties
Now that’s a pretty complicated definition, but CRM really comes down to knowing your customers and designing your interactions with them to enhance your company’s results. The key components:
- Data-driven. CRM doesn’t work if you don’t know your customers. You need enough information about your customers to know their behaviors and preferences (how often do they purchase, how much do they spend, what channel do they prefer, etc.). That said, CRM is not simply technology.
- Personalized. Over time, each customer will have a unique set of interactions with you; there’s no one path for all customers.
- Across all touchpoints. CRM enables you to recognize a customer across all channels, so your interactions – whether for sales, support, events, etc. – acknowledge and reflect their history with and value to your business.
- Ongoing. CRM should enable you to create a true relationship with your customer, enabling you to attract and retain customers more effectively, yielding lower customer acquisition costs and higher lifetime value.
- Maximize value for both parties. You can design and execute customer interactions flawlessly, but if they’re not providing value to your customers, you still won’t keep them. CRM-focused businesses recognize that the purpose of a customer relationship is for both the enterprise and the individual to receive as much value as possible from every interaction.
So this can still sound pretty theoretical – what does CRM look like in practice?
- Customers receive differentiated treatment, based on their preferences and value to your business. CRM technology allows your business to make different online offers to different customers on the fly, based on the pages they visit, their location in your store or neighborhood, or past purchases.
- Customers receive consistent treatment and recognition whether they’re in a store, buying online, or accessing customer support. They can be recognized by name, their past transactions can be acknowledged, and you can make the same offers to them across every channel.
- You sell more product at full price and/or incur lower costs. You’ll know which customers buy at full retail price, so you don’t offer unnecessary discounts. Targeting communications based on customer preferences saves you money – no more sending unnecessary catalogs or placing useless online ads.
- Customers feel appreciated and understood. When a customer receives a relevant article from you or is given the opportunity to buy a limited-edition item, or when customer support asks about their satisfaction with a prior purchase, they know that your business recognizes and appreciates them as an individual.
Remember that CRM is a business strategy, not simply a piece of technology or a database. Implemented properly, it can make your business more successful by allowing you to build lasting relationships with your customers – before your competitors do, instead.
For more information, please contact us.