Customer Relationship Marketing

Customer Relationship Marketing

INTRODUCTION

Relationship management is a special field of its own, it is as important as preserving and enhancing the intangible asset known as “goodwill” as the management of hard assets.  The fact that it is probably harder to do is that much more reason hard effort be expended to do it                                                                                                                                                                                                                      -Theodre Levitt.

Relationship Marketing is one of the hottest trends in marketing today. Relationship marketing is a philosophy of doing business.  It is gaining increasing popularity in the business world. Relationship Marketing is the process of attracting, maintaining and enhancing relationship with key parties – customers, suppliers and distributors in order to earn and retain their business and honor their long term preference. The main purpose of relationship marketing is to build a unique company asset known as ‘Marketing Network’. The underlying idea is to simply build an effective and efficient network of relationship with key stakeholders and the profits will follow automatically.

Two Basic tasks;

Increasing the number of those factors which lead to customer satisfaction and loyalty Avoiding those factors, which lead to customer dissatisfaction and brand switching;

Objectives of Relationship Marketing

The primary objective of relationship marketing is to build and maintain a group of committed customers To find out the group of new customers, which hold better promise than the others.  To know the Loyal customers can be even better customers if they buy more products and Services To know about customers move from one life cycle stage from another, needs To know about buying pattern fluctuates and product choices shift. To know the customer  relationship of the Company should recognize such change of needs and wants To achieve this firm will focus on attraction and retention of the customer To enhancement of customer relationship.

Importance of CRM  

CRM is an integrated information system that brings together information about consumers, marketing effectiveness, sales and market trends. It enables business to combine technology and human resources to understand the consumer behavior. Relationship marketing uses improved information technology to regularly interact with firm consumers and to base product offerings on the consumer’s buying habits.

Traditional Marketing V/S Relationship Marketing

                        The traditional marketing, known as Transactional marketing focused. On mass production, mass marketing and standardized products and service. Relationship marketing, the focus has now shifted to highly customized and personalized products and service.

The Difference Between Traditional and Relationship Marketing

 

TRDITIONAL

RELATIONSHIP MARKETING

1.

Prominence on single sale transaction.

Prominence on retaining the customers.

2.

Quality of the product is the sole

 Responsibility of production.

Quality of the product is a concern for everyone.

3.

Direction on product or service features.

Direction on product or service benefits.

4.

Little importance on customer service

Strong importance on customer service.

5.

Short time scale.

Long time service.

 

Model of Relationship Marketing

                        The Model of Relationship Marketing the cost of acquiring a new customer is almost ten times the cost of retention of a customer which means that it’s much easier and more inexpensive to make an additional sale to an existing customer than to make a new sale to a new customer. As per Pareto’s Law, 80% of the total sales come from 20% of the customers. The need for relationship marketing, the core of which is customer retention.

 Relationship Marketing Model

INPUT

PROCESS

OUTPUT

Value–added products and Service

 

High customer satisfaction

One-on-one relationship

 

Increased customer share

Individual care and attention

Relationship Marketing

Lower marketing costs

Special facilities and services

 

Positive word –of –mouth

Structural ties

 

High brand equity

Information sharing

 

High customer loyalty

 Benefits of Customer Relationship Marketing:

It gives good image It developed brand equity, customer retention and loyalty. It Builds goodwill in the market, It Keeps competitors away from customers’ sight, It gives more customer satisfaction,  Satisfied customers bring other  potential new customer Facilitates employee retention for strong base of satisfied customers Positive word of mouth Turns customer into your friend.

To Customers:

               Customers will remain loyal to a firm when they receive greater value relative to what they expect competing firms. 

Customers will comfortable in the relationship. Firm knows what to expect the Customers, Customers has a good working relationship with the organization Customers know Firm will be taken care of even for an unusual request.

To Confidence Benefit:

               These benefits comprise feelings of trust or confidence in the provider, along with a sense of reduced anxiety and comfort in knowing what to expect.

To Social Benefit:

               In some long-tern customer – firm relationship a service provider may actually become part of the consumer’s social support system. 

 Benefit to the Organization:                                       

To Increase in purchase:

The consumers are satisfied with the quality and services provided by the company they will give more business to the firm.

To Lower Costs:

               It is important fact for retaining old customers and gets new customers. Services are normally complex and difficult to evaluate before actually buying it, consumers most often look to others for advice on which providers to be considered.  Satisfied, loyal customers are likely to provide a firm with strong word-of-mouth endorsements.

Suggestions for Effective Relationship Marketing            

Companies should set up an independent relationship marketing department. Confidence should be placed not only on technical people but also on relationship managers. Provide additional compensation and incentives to sales personnel dealing with customers. There should be an integrated marketing system to build relationship with customers , suppliers, dealers and other parties Companies should keep a look out for value building approaches on an ongoing basis Regular interaction with customers Be proactive, not reactive in marketing the product or service.

Conclusion

            Modern marketing revolves around the customer.  It is an old and by-now universally accepted concept that the Customer is the King.  Customers are treated as the eyeballs of all major companies in the world. The primary of relationship marketing is to build and maintain a group of committed customers who are profitable for the organization.  With the advent of relationship marketing, companies are prepared to do anything and everything to keep their customers happy and satisfied.  A satisfied customer is not going to shift his loyalty to the competition’s grab for additional sales.  Business firms are now willingly engaged in constant improvisation, personalization and customization, marking a visible shift form “marketing myopia” to “marketing hypermetropia”.  Present scenario of the business in the world relationship marketing is very important to retain old customers and get new customers.

 Reference:

Payne. A (1996), The Essence of Service Marketing, Prentice Hall India, Eastern     Economy Edition New Delhi.

2. Crosby, L, A., Eavans. K.R .and Cowles D… (1990), Relationship Quality in Service Selling: an Interpersonal Influence Perspective, Journal of Marketing, July, pp 68-81.

3. Dr.AtulDhyani, Relationship Marketing a New Challenge, Indian Journal of      Marketing, February, 2003

4. Sudhir Chowdhary, Customer Relationship Management (CRM) One-to-One Marketing,

   Computers Today

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Customer Services Versus Sales Representatives – The War of Incentive

Customer service can often be seen by businesses as a necessary evil, a burden on the finances and something to try to provide at minimal cost. To see it this way is, however, a gross oversight. Ask yourself what is the most important asset a company has? In almost every case it will be the customer base.

Customers make or break a company. Too few customers and no business can survive. Effective, high quality customer support can create an image for a business which sets it apart from its competitors. If you treat your customers with care, consideration and patience, providing a service which genuinely tries to help resolve concerns or issues, then customers are far more likely to return to your company time and again.

Not only is customer loyalty an issue which your service representatives can actively develop, but very often your customers are one of your strongest means to promotion. Internet technology today allows for quick and easy access to many thousands of review sites. Enter almost any company name into Google, along with words such as ‘review’ and you’re bound to find rating and experiences.

These can have a tremendous effect on how well you drive customers to your business, or drive them away. Customer service is the means by which your customers will be interacting with your business; as far as customers are concerned, your customer service is the business itself. Many large, global corporations outsource their customer support centers, and this can lead to poor quality communications. This is where smaller businesses can excel, filling the quality gap which exists.

From a customer’s perspective, very little can be as frustrating as the experience of having a highly enthusiastic, deeply personal and seemingly committed business woo you and persuade you to buy into its product or service range, only to then cut and run, leaving you in the hands of an outsourced, underfunded and less experienced customer service team. It can often feel as though the outsourced customer service team is put there as a direct barrier between the customer and the business.

Certainly it can easily be the case that customers perceive not one, but two quite distinct businesses, with the possibility of a third lurking in the background. Initially there is the friendly and courteous business, almost bending over backwards to be helpful and understanding, though once the payment has been made and the contract signed, this part of the business becomes unreachable. The customers are then transferred to a less technical, less responsive, slower and less capable business which is labeled customer service, and which pays little attention to the customer and offers little in the way of proactive help.

The two businesses appear quite distinct in character. This discovery can give rise to a previously unconsidered business element, which are those lurking behind these two faces, driving the business forward by portraying these two quite opposite and contrasting faces by way of a sales tactic. This can completely undermine any faith, loyalty or appeal generated by the first face that the business chose to portray.

This is a shame, because those few businesses that are able to maintain this same attitude through from the sales team to the customer service team are highly likely to engage customer loyalty through customer satisfaction. This in turn is likely to see customers recommending the business, leaving positive reviews on the many review boards across the internet, and helping to drive more customers to you without you even having to advertise to reach them.

Good customer service leads to satisfied customers, which can be the best form of advertising there is, simply because you can’t buy it. Granted, the extra cost of having in-house, fully trained customer service staff who are as committed and motivated as the sales staff will cost a little extra, but it is important to see this not as an extra cost, but one in lieu of your advertising costs. Good customer service is not just an end in itself, which is the mistake made by too many companies.

Good levels of service for existing customers will be highly likely to act as a form of advertising, bringing in extra revenue you would not otherwise have seen. Add to this argument the fact that bad customer service is more likely to drive not only existing customers away, but put off potential customers you might have had as a direct result of poor reviews and a low reputation, and you can see that in the long run, investing in high levels of quality within your customer service department can be seen as a solid and profitable investment if approached in the right way.

Sales people often have incentives, such as targets, number of sales per hour, and other such tables which can lead to bonuses. Customer service representatives often have no such incentives; perhaps there’s a link between the different standards of enthusiasm?

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How To Use Twitter to Build Customer Loyalty

If you are anything like me you are probably of the mindset that the Internet has significantly lessened the level of customer loyalty that most companies are accustomed to.

The reason for this is consumers now have so many choices, they no longer have to rely on digging through the phone book or count on the right “interruption based” advertising message to create a “top of mind awareness” for when they are ready to make a buying decision.

Let’s face it … The Internet is here to stay!

We have a couple obvious choices. We can either hire the world’s greatest hackers and attempt to have them permanently destroy the Internet so it goes offline forever, or we can come up with creative ways to embrace this supposed “loyalty killer” and turn it into a “loyalty enabler.”

As Twitter continues to grow in popularity and more and more people get hooked on it as they have with Facebook, your potential to stay in front of your customers will increase tremendously.

Eleven percent of the population has already used Twitter and that number will continue to grow at a rapid rate in the coming months and years.

For the purpose of this article I’d like to focus on how a sports bar / restaurant could use Twitter to build customer loyalty and sales dollars at the same time.

Step One – Create a “Twitter-centric” Promotion

Let your customers know your restaurant is an active Twitter participant and that you’d love it if they followed you. If it happens to be Monday Night Football time invite your Twitter followers to send you a “Tweet” guessing the outcome of this week’s game. Let them know the person who gets the correct score will win a dinner for two. If the economy happens to be nipping at your profits, make sure you add some type of tie breaker so you don’t have to award too many free dinners.

Throughout the course of the game “Tweet” the scores as they occur so you can keep your followers abreast of the game. You may even want to point out those people who look like they are on track to win. Whatever you do make it fun and engage your “Followers.”

Step Two – Create Twitter Follower ONLY specials

Send out a daily “Tweet” that offers a special for your Twitter followersONLY. It doesn’t have to be a big deal. It could simply be 50% off on an appetizer. Just offer something and don’t be too cheap. What you’ll find is that the customers who initially began to follow you for the “Guess the Score” contest, will be excited that there is something else to look for from your restaurant’s tweets.

If you consistently “Tweet” these offers, you’ll find people will look out for your “Tweets” specifically and you may just give them a reason to fore-go grilling on the deck and stop by to enjoy your outdoor deck. :)

Step Three – Keep Your Followers Up to Date on Wait Times

How did you feel the last time you drove across town to visit your favorite restaurant only to find out the wait was 2 hours, or worse yet, they were completely booked for the evening?

I am guessing you weren’t too happy!

Well what if you could have opened up your smart phone, or logged onto your computer and found your favorite restaurant just “Tweeted” that there was a 30 minute wait? I am guessing you’d be much happier.

Could they have just called? Sure, but phone calls are boring and everyone LOVES new technology.

Step Four – Monitor the “Twitter-sphere”

You should always have a search window open on Twitter for your Company name. So many companies have no idea what people are saying about them and if they did, they could help correct a poor visitor experience by simply showing they care. This is something which might take you 30 seconds to do, and you could spend even less time passively monitoring the results.

Think about how you’d feel if you blew off some steam about a bad experience and within a few seconds you got a response back asking how that company could “make it right.” Most people would talk about that to many other people and the buzz created would be incredible!

There are many other ways to use Twitter to build customer loyalty and this is just one simple example. I challenge you to think creatively and figure out how to use this for your business. It doesn’t matter if you have a restaurant or a tool and die shop … Just be creative and YOU WILL WIN!

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Way to Check Out Value Of Customer Satisfaction

Nowadays, call center is not being used just to attend phone calls, it’s a separate business that can help you to generate revenue by satisfy your potential customers. Call Center must provide company with fresh ideas and help company to generate new customers and strongly archive business goals successfully.

Call Center must works 24×7 hrs, and live response must be accessible within few seconds. Customer service representatives help to resolve customer’s problems immediately, and must keep customers connected with your services for long that wished to cancel service.

As companies become larger and larger day by day , its unfortunate that the contact people who are in the customer service business often know less and less about what is actually going on with the business. Simple and easy way to check out effectiveness at a customer service call center is to count the number of calls and time per call. Most of the call centers even pressure calling agents to limit the time spent on calls up to 30 seconds. Actually, if any customer service representatives spent more time on a call then its probably the worst measurement of effectiveness for call center.

Another way to calculate the effectiveness of the call center is based on determining the level of customer satisfaction with the call itself. If you want use this then several pieces of information are required. First of all the customers must be surveyed about the results of their interaction with the call center personnel and this must occur fairly quickly following the contact. If 9 out of 10 customer are fully satisfied with your service then its assumed to be satisfied while score of 3 or less means the customer was very dissatisfied.

Nowadays organization are putting more and more stress to improve the quality of customer services. For this reason they always close eyes on Quality Evaluation of the Agents by Live call monitoring , Call Recording, and Daily Agent Feedback.

On the other note, for customer and employee satisfaction you must be ensure that your employees are satisfied with the working environment and the operating procedures. Otherwise, their performance would logically affect the overall customer satisfaction.

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CRM Software and Vision Evolution

CRM software has become a necessary implementation for every business.Companies have understood the importance of studying and managing their relationships between their customers, and even other vital groups like their employees, their providers, their vendors, etc., and that’s why the hunger for better CRM software is increasing over time. Large, medium or small companies; no business is excusable for missing this enormous subject that is the relationship’s management.

Customer relationship management software has existed since a relatively long time, but it seems that it has become more popular (and necessary) in the last years. Long before CRM, there existed what was called PIM, or Personal Information Manager. These electronic devices had limited databases for storing important dates or information, most likely addresses and telephone numbers. But these basic functions weren’t enough for storing all the necessary information. That’s why these devices and its software kept evolving, reaching different stages, like CMS, or Contact Management System; SFA, or Sales Force Automation – actually, CRM was heavily based on SFA -, etc.

When these management systems finally evolved into what CRM is now, different software companies developed their own CRM applications – SAP and Siebel Systems being the market leaders at the beginning of the CRM race. At this time, CRM wasn’t a popular implementation for business, as it wasn’t well known (at least, not as well as now) and many companies had only horror stories to tell about their CRM implementation. But this is slowly changing…

We’re facing a new age for CRM, where companies are becoming aware of how to implement correctly a CRM solution, different software companies are offering different approaches to management, and managers and directors are realizing about the need for customer relationship management. Even now, these new ideas are reaching new perspectives, like the xRM concept, where relationship management isn’t just for a company’s customers anymore, but its software developers, its administrators, its vendors, its providers… in a word, everything. And this new age has attracted new companies to enter the CRM race, being the most notable Microsoft.

Microsoft owned some CRM territory with Microsoft Outlook, but it wasn’t truly a CRM solution as it lacked several features other software offered, like Oracle’s Siebel CRM or SAP’s CRM. Microsoft was just a watcher, waiting for its opportunity to invade this territory.

While Microsoft began its plan for dominating the CRM industry long ago, with its Axapta 1.0 in March 1998, it wasn’t until the release of Microsoft Dynamics AX 4.0 in March 2006 when they reached a dangerous stage for its competitors. What makes Dynamics so powerful is its capability for integration with several other Microsoft technologies, like Microsoft Office, SQL Server and the .NET platform, being this latter one of the most important aspects of version 4.0. Dynamics being in a fully integrated environment with the .NET platform, customization of the software became easier, turning Dynamics plug-ins development a perfect solution for satiating a company’s need.

This characteristic will become a salvation for many companies, as the implementation of the new xRM concept, for example, is becoming an achievable feat. Companies will be able to customize Microsoft Dynamics to fit only its demands, eliminating the idea of treating with a general purpose software; it won’t fit any need anymore,  but your need.This customization will diminish many software problems, like employees’ software training and the lack of software features.

Without doubt, CRM software, gadgets, theories and techniques are evolving in a very interesting (and beneficial) way. Customer relationship management is becoming a high necessity for every business, where the company’s size or interests won’t matter.

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