Customers

Meaning:
Customer is an individual, group of individuals or an organization who receive or may
receive goods, services, products or ideas from another individual or a company in return of value
which can be money or anything of equivalent value.
Importance of Customer:
a. Customer Experience:
These days the customer experience is one of the most important parameters in the world.
The customer experience doesn't start after buying a product but it starts from the moment
customer notices a product. The customer can take decision based on positioning, packaging,
colors, branding, sales approach, store experience or any other parameter. All form part of the
customer experience.
b. Customer Satisfaction:
Customer experience need to convert into customer satisfaction. A customer needs to be
sure and satisfied before and after buying a product. If any of the parameters are not in favor then
the customer dissatisfaction may happen and current or subsequent sales might not happen.
c. Customer Support:
Customer might need service and support at any point in the sales and after-sales cycle.
Customer service has become of the pillars of successful businesses highlighting how important
the end customer is.
Types of Customers:
1. Potential Customer:
Kind of person who is very likely to buy the product or service offered by the business.
E.g. a customer looking for an apartment in a particular area becomes a potential customer for the
local realtors who would have a flat which will suit the requirements of the customer. The customer
might end up buying the apartment. Potential customers can present an opportunity for the business
to sellers and after qualification can convert into a quote stage and eventually result in an order or
a sale.
2. Loyal Customer:
Those who are loyal to one business and repeat the purchases irrespective of minor changes
in parameters like price, quantity etc.

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3. New Customer:
The customers who have used the product or service for the first time from a particular
organization. Such customers can be switching from a competitor brand or may be new entrant
into the market.
4. Discount Customer:
Those who only buy or use the offering because it was on discount or offered a cashback.
These people are more likely to switch brands easily if prices reduce unlike loyal customers. E.g.,
a customer who takes a different flight based in the discounts offered though the preferred airline
brand was different based on past travels.
5. Former Customer:
Those who were once buyer of one business and became buyers of a new business because
of some reason. These people would still be potential customers as they have already tried the
product or service once.
6. Internal Customer:
One who is connected to your organization and is internal to your organization. These for
example are your shareholders, employees & other stakeholders.
7. External Customer:
An external buyer is a buyer of your services and products but external to your
organization. An example of your external consumer could be people buying your products in the
marketplace.
8. Intermediate Customer:
Those who purchases the goods for re-sale e.g. retailers. The customers are part of a longer
supply or value chain.
Customer Value and Satisfaction:
Customer value is the difference between the total benefits expected from a product/service
and the total costs incurred to obtain that product or service. On the other hand, customer
satisfaction refers to the difference between the actual performance experienced by a customer and
the expectation of the customer.

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Methods of measuring Customer Satisfaction:
1. Direct Method:
Directly contacting customers and getting their valuable feedback is very important.
Following are some of the ways by which customers could be directly tabbed
a. Direct Marketing;
In-house call centers, complaint handling department could be treated as first point of
contact for getting customer feedback. These feedbacks are compiled to analyze customers’
perception.
b. Customer Feedback:
Getting customer feedback through face to face conversation or meeting, Feedback through
complaint or appreciation letter and direct customer feedback through surveys and questionnaires.
2. Indirect Method:
The major drawback of direct methods is that it turns out to be very costly and requires a
lot of pre compiled preparations to implement. For getting the valuable feedbacks the supplier
totally depends on the customer due to which they loses options and chances to take corrective
measure at correct time. Hence there are other following indirect methods of getting feedback
regarding customer satisfaction:
a. Customer Complaints:
Customer’s complaints are the issues and problems reported by the customer to supplier
with regards to any specific product or related service. These complaints can be classified under
different segments according to the severity and department. If the complaints under a particular
segment go high in a specific period of time then the performance of the organization is degrading
in that specific area or segment. But if the complaints diminish in a specific period of time then
that means the organization is performing well and customer satisfaction level is also higher.
b. Customer Loyalty:
It is necessarily required for an organization to interact and communicate with customers
on a regular basis to increase customer loyalty. In these interactions and communications it is
required to learn and determine all individual customer needs and respond accordingly. A customer
is said to be loyal if he revisits supplier on regular basis for purchases. These loyal customers are
the satisfied ones and hence they are bounded with a relationship with the supplier. Hence by
obtaining the customer loyalty index, suppliers can indirectly measure customer satisfaction.

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Retaining Customers / Customer Retention
It is the process of engaging existing customers to continue buying products or services
from your business. It’s different from customer acquisition or lead generation because you’ve
already converted the customer at least once.
Strategies in Retaining Customers:
1. Set expectations early and often:
2. Communicate results on a regular basis
3. Create a roadmap for the future of the relationship
4. Make memories around your shared successes
5. Ask for feedback and act on this information
6. Keep a record of communication and any past problems
Customer Relationship Management:
Customer relationship management includes various strategies and techniques to maintain
healthy relationship with the organization’s existing as well as potential customers.
In simple words, customer relationship management refers to the study of needs and
expectations of the customers and providing them the right solution.
Evolution of CRM:
1. Door to Door Marketing:
Initially, there were door to door sales forces to approach the customers.
2. Mass Marketing:
Then, Mass Marketing replaced the intimacy of a direct sales force.
3. Targeted Marketing:
Later, Target Marketing evolved. Use of direct mail and telemarketing.
4. CRM:
Latest is Customer Relationship Management, the next step is evolution. A concept
supported by latest technologies.
Need & Importance of Customer Relationship Management:
1. Better service to customers:
CRM provides more avenues for customers to communicate and explain their needs to the
organization through numerous contact points. Customers get increased satisfaction and a feeling

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of being special and important because of the increased personalization of services and
customization of goods offered to them.
2. Customization of market offerings:
Companies can customize a product or service depending on the data available with the
firm. The firm can facilitate customer-company interaction through the company contact centre
and web site. Such interactions help develop customized products.
3. Reduction in the customer defection rate:
CRM emphasizes on training and development of the employees to become more customer
oriented. Due to CRM training and development, employees show care and concern towards the
valuable customers; therefore, the customer defection rate may be reduced to a great extent.
4. Increase and improvement in long-term relationships:
Some firms treat their customers as partners. Firms solicit the help of the customers to
design new products or to improve their services. If the customer gets involved with the firm, they
are more likely to remain with the firm.
5. Competitive advantage:
The firms that adopt CRM get competitive advantage in the market. They can face the
competition with much ease. Competitive advantage helps in generating higher returns on
investment.
6. Building and maintaining corporate image:
The image of the firm also gets enhanced. Loyal customers become evangelists. The
evangelists spread a good word about the company and its products. This enables a firm to get
additional customers to its fold.
7. Higher return on investment:
Due to CRM, a company gains a position to generate higher returns on investment. This is
because of the repeat purchases on the part of the loyal customers. The company also makes money
through cross selling. The higher return on investment increases the shareholders’ value.
Advantages of CRM:
1. Enhances Better Customer Service :
CRM systems provide businesses with numerous strategic advantages. One of such is the
capability to add a personal touch to existing relationships between the business and the customers.
It is possible to treat each client individually rather than as a group, by maintaining a repository

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on each customer’s profiles. This system allows each employee to understand the specific needs
of their customers as well as their transaction file.
2. Facilitates discovery of new customers:
CRM systems are useful in identifying potential customers. They keep track of the profiles
of the existing clientele and can use them to determine the people to target for maximum clientage
returns.
New customers are an indication of future growth. However, a growing business utilizing
CRM software should encounter a higher number of existing customers versus new prospects each
week. Growth is only essential if the existing customers are maintained appropriately even with
recruitment of new prospects.
3. Helps the sales team in closing deals faster:
A CRM system helps in closing faster deals by facilitating quicker and more efficient
responses to customer leads and information. Customers get more convinced to turn their inquiries
into purchases once they are responded to promptly. Organizations that have successfully
implemented a CRM system have observed a drastic decrease in turnaround time.
4. Simplifies the sales and marketing processes:
A CRM system facilitates development of better and effective communication channels.
Technological integrations like websites and interactive voice response systems can make work
easier for the sales representatives as well as the organization. Consequently, businesses with a
CRM have a chance to provide their customers with various ways of communication. Such
strategies ensure appropriate delivery of communication and quick response to inquiries and
feedback from customers.
5. Makes call centers more efficient:
Targeting clients with CRM software is much easier since employees have access to order
histories and customer details. The software helps the organization’s workforce to know how to
deal with each customer depending upon their recorded archives. Information from the software
can be instantly accessed from any point within the organization.
6. Enhances customer loyalty:
CRM software is useful in measuring customer loyalty in a less costly manner. In most
cases, loyal customers become professional recommendations of the business and the services
offered. Consequently, the business can promote their services to new prospects based on

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testimonials from loyal customers. Testimonials are often convincing more than presenting
theoretical frameworks to your future prospects. With CRM, it could be difficult pulling out your
loyal customers and making them feel appreciated for their esteemed support.
7. Builds up on effective internal communication:
A CRM strategy is effective in building up effective communication within the company.
Different departments can share customer data remotely, hence enhancing team work. Such a
strategy is better than working individually with no links between the different business
departments. It increases the business’s profitability since staff no longer have to move physically
move while in search of critical customer data from other departments.