CRM is a process of acquiring new customers, consolidating all the information you know about the customer, developing a database platform to host and mine the information, retaining existing customers and a strategy for winning back valuable lost customers.
However, before I continue, let me say that, unless you have a superb product or service, and deliver a positive, consistent buying experience, no amount of relationship-building will help you retain or win back a customer. Acquiring new customers is relatively easy - it is finding the customer who will become most valuable to your business that is more difficult.
For a CRM initiative to succeed, a business must identify its most valuable and growable clients. As in any business process, the 80:20 principle applies to CRM too. Twenty percent of loyal customers account for 80% of the bottom line. It makes business sense to concentrate resources and budgets on building customer loyalty amongst this segment.
Furthermore, the profile of your most growable and most valuable customers will have a similar profile to your prospective new customers.
Communication efficiency is vital! The channel and the segment to be targeted will determine the communication mix. You need to ensure that communications are regular, relevant, rewarding, and that the recipient is acknowledged. CRM is very much like a marriage - unless you maintain open two-way dialogue and understand your other half's needs, the marriage probably won't last.
The new black middle class is hungry for information; it is a group that wants to be understood and recognised. Direct marketers have numerous channels and tools available for us to do this:
Going back to what I said about retaining customers and the importance of knowing who they are and how they behave, there are a number of simple processes that should be followed.
Once you have a new customer on board, dialogue should commence immediately. It may be as simple as an email or letter welcoming them to your business and ensuring that you maintain your relationship with them through two-way dialogue.
No matter whom you are targeting, the rules remain the same.
Creativity is the key to success. If communications are bland, boring and irrelevant, it is unlikely that your envelope or email will be opened, let alone the contents read. Be engaging from the start, and reflect information that is rewarding, relevant and recognises your customer. Personalisation is far more effective than a letter addressed to “The Post Box Owner”.
Whatever means used, remember that the more information you can gather when acquiring your new customer, the more likely you are to retain him or her over a longer period of time.
The third and final part of this series, ‘Data: the lifeblood of any CRM programme', will go into further detail.
