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Customer Relationship Management 1

Customer Relationship Management 1

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Published by asifanis

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Published by: asifanis on Jun 09, 2010
Copyright:Attribution Non-commercial


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The evolution of customer relationshipmanagement: From a market of millions to a millionmarkets of one.
Today, consumers are more educated, better informed, more technology savvy, and hence, moredemanding in the products and services they buy. Couple this with increased competitive offerings in themarketplace, with little or no differentiation, and what many marketers face is a new reality whereconsumers have more purchasing power than ever before.So how do you attract profitable customers? How do you hold on to your customers who are buying fromyou today but are showing signs of defecting to the competition? And how do you figure out whichproducts and services you should bundle together to increase customer profitability? These are thechallenges that business managers face today.For example, a communications services provider identifies a segment of high profitable, technologysavvy, upper income customers and prospects. It then studies their behaviour, and better understands thetypes of services they want. The company next bundles a convenience package of products and servicesunder a single name, a single marketing campaign, and what's more, a single bill. They would veryeffectively meet that segment's complete communications needs and foster customer loyalty.Enter Customer Relationship Management or CRM. Chances are you've heard about it, and perhaps your  company has a CRM program in place. It's really not a new idea, in that any good company, over theyears, has had to figure out how to build relationships with its customers that lead to brand loyalty. Whatseems to be new is that there is an emerging set of tools, especially data information-based tools, thatnow allow organizations to capture and analyze the large volumes of detailed data needed to better understand their customers. The end result: you are able to treat different customers differently.The goal in CRM is to evolve from a mass marketing model, which was spurred on by a product-centric marketing structure, to dealing with each customer as if they were your only customer. This is a new wayof thinking for many companies with thousands, even millions, of customers. Managing customer relationships successfully means learning about the habits and needs of your customers, anticipatingfuture buying patterns, and finding new opportunities to add value to the relationship. Successfulcompanies make the relationship something the customer values more than anything else they couldreceive from the competition. Your company can do this by looking at your experience with customers,not only with transactions and demographics, but also with every interaction, including a web site visit, a
phone call to your call centre, and a response from a direct mail campaign. By building the data andinformation technology architecture around the customer, you can ensure that they enjoy a seamless andrewarding expe rience when doing business with your company.So how do you manage each customer relationship individually? As a marketing organization, you needto build a system which allows you to track, capture, and analyze the millions of customer activities, bothinteractions and transactions, over a long period of time. With this knowledge, you can thencreatepromotions,develop new products and services, and design communication programs that attract, reward and hence retain your customers. But what's fundamental is that only through operationalexcellence and technology leadership can your organization predict and maximize the value of eachcustomer relationship.For example, a bank can use data warehousing and data mining technologies to learn from the millions of transactions and interactions with their customers and anticipate their needs. Based on consumer behaviour and attitude patterns identified, the bank can then determine a highly effective segmentationplan whereby customers are scored or flagged based on predetermined criteria. For example: what wouldbe the risk of leaving the bank to go to the competition, which communication channel do they prefer,what is the probability the customer will buy a service or product. This knowledge then helps the bank todevelopmarketing programsthat make sense to each customer segment, support cross-selling andcustomer retention programs, help the staff understand how to maximize the value of each customer'sinteraction with the bank, and deliver a consistent branding message by aligning products and serviceswithin each channel.To sum up, the key ingredients to creating a successful CRM system include:* An enterprise data warehouse that captures all of a customer's history including purchases,preferences, and promotions.* Customer interaction channels that allow you to reach your customers more effectively and efficiently,where and when they want to be reached.* A data warehouse that enablescustomer servicepersonnel real-time access so they can use it tointeract with their customers.* A long-range budget, upper management support, and appropriate resources.* Segmentation of customers by profitability.Customer Relationship Management through data warehousing is really about taking a long-termapproach to building relationships with customers. Back in the good old days, the butcher, baker, or 
banker would know their customer base from seeing them on a daily basis and learning their preferencesbased on the relationship they shared with the customer. CRM is really about using the powerful toolsdata warehousing and data mining technologies have to offer, not only to achieve the personalrelationships businesses once had with customers, but even to predict and serve their future needs!
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Customer relationship management
Business benefits of CRM
Implementing a customer relationship management (CRM) solution might involve considerable time andexpense. However, there are many potential benefits.A major benefit can be the development of better relations with your existing customers, which can lead to:
increased sales through better timing by anticipating needs based on historic trends
identifying needs more effectively by understanding specific customer requirements
cross-selling of other products by highlighting and suggesting alternatives or enhancements
identifying which of your customers are profitable and which are notThis can lead to better marketing of your products or services by focusing on:
effective targeted marketing communications aimed specifically at customer needs
a more personal approach and the development of new or improved products and services in orderto win more business in the future

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