Customer relationship matters

In almost direct contravention to the spirit and ethos of the $36 billion a year CRM market, I’ll begin on a somewhat unsteady footing by explaining that there isn’t really a simple definition for customer relationship management at all. This may sound odd: as we all know, managing our relationships with our customers is part and parcel of all business; we expect it as customers and we are all, to some extent, naturally predisposed towards it in any transaction. Whether you’re brokering a multi-million dollar merger or selling a car in the classifieds, you’ll find CRM at the very center, but few know exactly why and fewer still know where to begin.

The closest thing to a definition of CRM I can provide is simply, or not so simply, thus: customer relationship management is the act of systematizing and synchronizing our natural relationships in a corporate context to cut down on costs, boost profitability and solidify customer loyalty, all in real time. Admittedly that does sound tenuous, but in practice the proper application of CRM can go a long way towards helping organizations create a healthy, two-way series of interactions between the business and the consumer. It allows customer-facing employees to make fast and well informed decisions, better enables cross–selling, up-selling and demographic targeting, and allows the company itself to more quickly and accurately adapt to changing market conditions.

Indeed, a quick glance at a few facts and figures gives us a glimpse of exactly why CRM has become so important to today’s businesses. A recent survey by Brain and Company, for example, found that increasing customer retention by just 5 percent can increase profits by 25 percent. Noted academic Frederick Reichheld finds in his The Loyalty Effect that global corporations now lose, and must replace, half their customers every five years. Even small to medium sized businesses see a customer leave-rate of 10 to 30 percent each year. Global marketing intelligence firm IDC finds that successful CRM implementations have resulted in returns ranging from 16 to 1,000 percent, while revenue increased by up to 41% per sales person. The CRM market for small and medium sized businesses is projected to grow at almost three times the pace of the overall market and it’s easy to see why: in an economy undergoing a shaky recovery, customer retention is key.

Understandably, then, many organizations with a strong customer-facing component have gone the way of the database. This enables, for group customer profiling, the easy retrieval of individual records and behavioral histories, and allows the person on the other end of the phone, email, or these days even a Twitter profile, to provide a service as quickly and conveniently as possible. Many systems have gone even further, incorporating deeper, more elaborate profiles which advise the employee on whether or not they can call a customer ‘buddy’, whether the customer has any other interests unrelated to the service provided and, subsequently, how and where to go for the after-sell. Some have gone further still, providing their employees with a mobile-ready CRM database, which allows them to access a customer’s info as they take the call from home, anytime and anywhere in the world.

Of course, as anyone who’s spoken to a call-center knows, CRM databasing is in no way a revolution in sales and marketing. But what many might not know is that, today, its application alone is not enough to secure those all-important retention and sales figures. CRM starts a long way before the customer initiated point of contact, and this is where the real marketing comes into play.

The problem, as with most things relationship-focused these days, is digitized automation in a world increasingly dominated by online social interaction. In the old days it had become something of a tradition, as a customer, to be treated with either a degree of impersonality or faux personality. But nowadays things have changed. Social media has not just empowered customers as individuals, but vastly empowered the collective. Of course, this is a good thing: empowered customers means open customers, and for a company there is no better market research tool than an honest customer. But whether you like it or not, the social customer now demands a greater move towards transparency and engagement among all facets of the organization in return. So as much as you, the company, want ready access to their information, the same now goes for them.

So, what’s the answer? Well, the first thing to remember is that CRM, in its modern form, is just a single component of a larger public relations and marketing exercise. From a prospective customer’s first glance at a billboard, your management of the relationship is underway and this relationship must continue throughout the customer lifecycle if you are to justify that initial advertising investment. Just as CRM is used to understand the customer, however, so too should the remainder of your marketing efforts allow them to understand you as a company. From your people and operating structure, history and foundations, the entire ethos of your organization should be out there for all to see. That way, when they do decide to make first contact, you can be sure that your prospective customers are just as informed about your organization as you would like to be about them.

It’s a mutually beneficial relationship: your customer understands the service or product you provide, and, you as an organization, know that no additional resource needs to be invested to further their interest beyond maintaining that relationship. Interactions are rendered mutually more efficient and fulfilling – the cornerstone of any well-functioning social sphere. Start with your website and social media channels, consider your inbound digital marketing strategy and try to position these in relation to the first point of contact and how you see the ongoing relationship panning out.

Better still, consider your multi-platform strategy – your on and offline presence – and how that contributes towards a comprehensive communications plan. When it comes to CRM, the most successful companies combine both static and dynamic communications vehicles – using the former as a lead generator and the later as a response mechanism. A company calendar or diary for example, offers 365 days of consistent brand presence and the opportunity to convey a seasonally tailored message with which to encourage that first contact. With that in place, the two-way conversation can then begin, ultimately leading to the conversion.

Most importantly, stay flexible and responsive, open, attentive and engaging and the CRM world is yours.

Terry Van Ryhn

Terry Van Ryhn

Terry has over 30 years’ international experience in marketing communications, delivering top-calibre solutions to major clients across the globe via agencies in Detroit, Cape Town, London and the Isle of ... Web: Details