Hi All,
It’s been sometime since I could post anything in my blog. Have been a bit tied up. But first of all thanks to you all for leaving your valued comments. Appreciate that!
However, going through your comments I had a sense that many of you would probably want me to start off by giving you all a brief insight into what CRM actually is…so here’s one article I came up with.
The Concept of CRM, and how is it so important for your Customers?
In these times of global recession, when every dollar saved is a dollar earned, each and every company is waging a war to create new customers. While creating new customers is great for any business, the very act in itself costs you more than the cost of retaining your existing customers quite a few times over. So are today’s companies missing a trick in trying to do so and ending up flattening their bottomlines?
Well, a No and a Yes would be the answer to the above question. Confusing, right? Let’s see the bigger picture – No, as every company would have to inevitably create new customers just for the case of its sheer survival. Creation of new and more customers is essentially the lifeblood of any business. A Yes is an answer also attributed to the above question, as in this entire process of creating new customers, companies are probably forgetting about their existing customers and the service meted out to them. And in these ages where customer satisfaction is no longer the benchmark, but customer delight is, no wonder such an act is blasphemous and tantamount to losing your present customers. You end up a loser on both accounts – new as well as existing customers. Remember reinventing the wheel!!
An apt antidote to this problem could lie in the Customer Relationship Mangement (CRM) application that is used by a company. CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”. But more than a business strategy, it is a visionary approach which provides seamless integration of every area of customer touchpoints – namely marketing, sales, customer services and field support through the integration of people, process and technology. No wonder CRM today is perceived with the creation, development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value. And indeed it is – if harnessed in the proper way!
The mid 90s saw the advent of CRM into the centrestage of enterprise applications. But then it was widely perceived as a replacement for a misleadingly narrow term, Relationship Marketing and a mere extension of the ERP arm – a front end ERP (!) as many said. Funny! However, with the second generation of CRM applications hitting the market, its meaning and therefore the underlying significance started crystalizing.
Today’s organizations realize that the focus of CRM is ineffect to create a long lasting value for the customer and the company. When customers value the customer service that they receive from suppliers, they are less prone to look at alternative suppliers for their needs. CRM enables organizations to gain “competitive advantage” over competitors that supply similar products/services and thereby remain one step ahead. Today’s businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies are critical to corporate performance. The adoption of CRM is therefore finally being fuelled across the lengths and breadths of industry by the dawning of the fact that longterm relationships with customers are one of the most important assets that an organization can have.
Throughout the 80s we saw winds of change sweeping through the business world that led to a new global order. As supply started exceeding demand, a new term was coined, that was here to stay forever – Customer Power. Sellers had very little pricing power and it was suddenly a buyer’s market. The only protection available to suppliers of goods/services was in their relationships with customers. The only thing inevitable was change and organizations were left with no choice – shape up or ship out. This transition into a customer focused organization meant market research attained a whole new dimension, and must be undertaken to assess the pulse of the market. Interestingly, it also meant organizations were more adaptive to customer needs and accordingly deliver them. Did you have a choice? Well, er, no.
Having said all these it again brings us back to what we were saying at the beginning of the article – what do companies need to do then in these globally hard times? Although there’s no clear solution to this jigsaw, a safe bet could be to start focusing on strategically significant markets. Not all of your customers are equally important! Therefore, relationships should be built with customers that are likely to provide value for services. Building relationships with customers that will provide little value could result in a loss of time, staff and financial resources. Absolute recipe for disaster in these challenging hours! Again, though there are no Dilbert Principle to catagorize your customers as strategically significant, a yardstick could be employed in the form of high lifetime value, those who serve as benchmarks for other customers, and those who inspire change in you – the supplier of goods/services.
The benefits of this segregated approach could be manifold – reduced costs, because the right things are being done, increased customer satisfaction, because they are getting exactly what they want, maximisation of opportunities, increased access to a source of market and competitor information, long term profitability and sustainabilit, and finally ensuring that the focus of the organisation is external.
Remember it aint about how hard you can hit, but it’s about how hard you can get hit and still keep going!!
Amitz CRM Zone 