by Jeff Yowell
Jeff Yowell is founder and CEO
of DATACORE Marketing. He can be reached at (816) 471-0605 or email him at jeff_yowell@datacorpmarketing.com
Bull market or bear, fair weather or foul, there is no bad time for companies to focus on learning more about their customers. Here's one surprising lesson: studies show that in a typical company only 32 out of every 100 customers will still be doing business with the company three years later.
What causes this flight? A better deal? A loss of interest? Can any proprietors say for sure that they know where their customers come from and where they go? To improve your customer retention, consider making customer relationship management (CRM) part of your marketing plan, no matter what the economic season.
Know Your Customers
CRM is a customer-focused strategy that drives profitable growth by giving customer value. The goal of CRM is to be so tuned-in to your customers that they wouldn't consider going anywhere else. CRM enables your company to remain very close to your customers. It's an alliance that allows you to observe and respond to customer concerns more quickly and efficiently.
In practicing CRM, you'll find that customers continually offer insights on how they wish to be treated and satisfied. When a company responds to that wish, the customer feels appreciated and the relationship is reinforced.
Cultivate Profitable Customers
Each customer is unique. Customers may purchase the same products or services, but each one buys for a different reason. Tapping into these reasons through CRM will help you determine which customers will be more profitable in the long-term.
This is very important at a time when senior managers are struggling with cutting budgets and trying to find the patience for long-term paybacks associated with many CRM programs. In truth, knowing your customers becomes even more important in a "soft" economy, when every customer is precious. Properly used, CRM strategies can help companies identify loyal customers, analyze the investment in these customers and eliminate communication with unprofitable customers or prospects that are unlikely to ever be customers.
This CRM benefit is critical in a slower economy. Even in a tight market, growth is possible if you focus your sales efforts on those customers most likely to buy and spend less time servicing unprofitable ones. In addition to saving money, this approach leads to greater customer satisfaction and improves the relevancy and timeliness of marketing solicitations.
Your sales force also will find that satisfied customers provide a wealth of information that can lead to new opportunities. As a result, CRM can play a major role in generating new revenue streams with existing customers. There is one other incentive for organizations considering CRM: many customer relationship activities don't require a large investment of capital. You can take existing programs and apply CRM strategies to show immediate results, such as cost reductions or enhanced customer relations.
Before initiating a major CRM program, it's a good idea to test your plan on a small customer population. This testing process can be done quite easily with loyalty and retention programs. The test outcomes can provide a greater comfort and understanding of what is possible when CRM initiatives are expanded in scope.
What Do Customers Really Want?
Our experience tells us that during a business downturn, customers want cost- effectiveness, better service and savings. An organization using CRM can draw attention away from price consideration by showing a higher level of customer care. You can demonstrate your sensitivity to your customers' needs by teaching them how to get more from a product or service, and by demonstrating ways to optimize their investment.
Keep in mind, though, that while customers are looking for cost savings, they also crave stability - and they'll do more business with a company that treats them right.