Managing Customer Relationships

Published May 17, 2016 by Mayrbear's Lair

 

Customer-Relationship-Management-Software-CRM

Customer Relationship Management (CRM) is a strategic approach that marketers implement to manage customer interactions in an organized fashion. Buttle and Maklan (2009) describe CRM as a disciplined practice developed in organizational management to build and maintain profitable consumer relationships. CRM programs manage all aspects of interaction a consumer has with a company, which includes prospecting, sales, and service (Buttle & Maklan, 2009). In short, CRM methodologies are designed to provide insight in company/client relationships to help improve them. One way of doing this is showing appreciation to clients and making them feel valued. For example, a mortgage and loan broker will send out a thank you gift to a borrower that just closed on a loan to help show appreciation for their business. This maneuver is effective in building a relationship with the client that can help encourage repeat business and new referrals. Customers that feel special and have a positive experience with an organization tend to remain loyal to the brand.

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There are many steps involved in the planning and implementation of an effective CRM program. Baack and Clow (2012) explain that the objective of relationship marketing is to understand how consumers behave and what they want. By establishing direct communication through methods that include (a) surveys, (b) gifts, (c) promotions, and (d) service lines, companies can establish more personal relationships with their clientele through this interaction and the data they collect (Baack & Clow, 2012). Corporate advertisers implement various methods of CRM strategies, all of them however, begin with strong database and information collection systems. Up to date databases help identify and segment a target audience. Database systems that record consumer interaction including: (a) details about their sales experience, (b) personal interests, (c) family interests, and (d) other relevant data to help identify personal habits and behavior, are used to build intimate relationships with clients to make them feel special so that in turn they will offer their loyalty. The data gathered also reveals other significant data such as how many times they make purchases, visit stores, websites and other social media outlets. All of this information is assessed to help marketers determine whether to rekindle old inactive relationships or release them to make room for other more substantial leads.

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The experience a consumer has with a company will determine whether that brand becomes a favorite or is abandoned. Kumar and Reinartz (2012) purport that strategic CRM approaches have become more popular in recent years because the field has changed for many reasons, including advances in marketplace technology. CRM programs provide insights into past, current, and future trends that continue to influence consumer behavior. In addition, CRM strategies help develop better relationships with existing profitable consumers, locate and entice new ones that will be profitable, and implement effective strategies to maintain them while terminating relationships that cause profit loss (Kumar & Reinartz, 2012). The concept of customer value is critical to CRM programs. For example, I made an online purchase with the Jockey Company and to entice me as a first time consumer, they offered a twenty dollar discount to try one of their new innovative and custom designed products. The custom design factor made it a more personal experience. As a result of the positive experience, I gave them permission to send email alerts on other special values and sales items. Furthermore, every time I visit their website to view new offers, I am personally welcomed. Plus, my payment information is already stored for quick checkout. The experience with the Jockey Corporation was fun, personal and unique. From my perspective, doing business with the Jockey brand was more pleasant because of the effective CRM strategies they incorporated. It was the personal touch that made me feel valued as a consumer and in doing so, they earned my loyalty.

Well, that’s it for today! Until next time … keep working on your management skills!

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The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

Peter Drucker

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References:

Baack, D., & Clow, K. (2012). Integrated advertising, promotion, and marketing communications (Fifth ed.). Upper Saddle River, NY: Pearson Education, Inc.

Buttle, F., & Maklan, S. (2009). Customer relationship management. Burlington, MA: Elsevier Ltd.

Kumar, V., & Reinartz, W. (2012). Customer relationship management (second ed.). Atlanta: Springer-Verlag Berlin Heidelberg.

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