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C R M as a strategic marketing tool
Customer Relationship Management (CRM) is the marketing management practice of
identifying, attracting and retaining the most valuable customers to sustain profitable growth
Customer Relationship Management is also the process of making and keeping customers and
maximizing their profitability, behaviors and satisfaction.
Today Customer demand open equal access, real time specialized information, convenient
access, information portability, process & logistics transparency, pricing transparency, global
pricing, ability to set prices, choice of distribution channels and control over their information
Maintaining relationship is the key to success of your business. By doing that, your first-time
customer can become a repeat customer, thereafter a client, then an advocate and finally your
partner in progress.
However the worst point is that at any point in the above process, he could disconnect from you
and therefore, it is all the more important to reiterate the relationship with him.
From your loyal customers, in addition to getting the base profit, you can also earn from reduced
operating cost, increased purchases and getting plenty of referrals.
We also understand from the realistic observation on customers that it costs ten times more to
sell to a new customer than to sell to an existing one. When the odds of selling to a new customer
are 15 percent, the odds of selling to an existing customer are 50 percent. And a typical
dissatisfied customer will tell 8 to 10 people about his or her bad experience. It is also true that
eighty percent of complaining customers will do business with the company again if it quickly
takes care of the problem. 45% of customers switching suppliers cite customer service issues as
the reason for the switch.
The 80-20 principle is valid in sales & marketing too. 20% of the customers deliver 80% of
revenues and many times, more than 100% of profits. Existing customers deliver most of the
revenues. However more attention – and money– is often spent on non-customers. It is therefore
important to identify the most valuable customers (MVCs) for the success of the business.
A small net upwards migration of customers can deliver a dramatic improvement in business
performance. 5-10% of the small customers can move immediately to the top. But an upward
migration only happens when customers are very satisfied. But even reasonably satisfied
customers defect.
Marketing and sales are charged with influencing customer behaviour but other departments
involved with customer processes also influence on customers – for better or worse.
What we need to accept is that Customer success equals business Success
Conclusion
The attempt here have been to describe the importance of following CRM practices for
acquiring, retaining and growing customers for sustained success for companies and how it could
be automated as an application practice with the help of organization’s IT infrastructure. The
whole infrastructure combined with the knowledge that it brings forth, guide the destiny of
companies in this extremely competitive world. CRM forms the biggest strategic asset that the
companies can have for effectively implementing its marketing plans.