Dealing with each customer as if they were the only customer is a new way of thinking for many companies with thousands, even millions of customers. Managing customer relationships successfully means learning about the habits and needs of your customers, anticipating future buying patterns and finding new opportunities to add value to the relationship.
Customer Behavior Patterns
For example, in the financial sector, early beneficiaries of successful CRM strategies have been the banks. These organizations are using data warehousing and data mining technologies to learn from the millions of transactions and interactions with their customers, and to anticipate their needs. The patterns of customer behavior and attitude derived from this information enable the banks to effectively segment customers on pre-determined criteria.
Detailed customer data can provide answers to the following questions:
- Which communication channel do they prefer?
- What would be the risk of leaving the bank to go to the competition?
- What is the probability the customer will buy a service or product?
This knowledge assists financial institutions with CRM solutions in place to develop marketing programs that respond to each customer segment, support cross-selling and customer retention programs and enables the staff to understand how to maximize the value of each customer’s interaction.
Maximizing Individual Customer Experiences
How does an organization manage each customer relationship individually? From the corporate perspective, there are several fundamental changes in corporate functions which can be made on the way to a complete CRM solution.
Marketing departments need systems that allow employees to track, capture, and analyze the millions of customer activities, both interactions and transactions, over a long period of time. This knowledge enables the organization to create promotions, develop new products and services, and design communication programs that attract, reward and retain customers.
Establish Two-Way Communications
Customer information has become a major strategic asset for corporations, creating requirements for information management and control that are just as important as managing an organization’s finances. An advanced information control capability should integrate two major components of the CRM framework:
- Managing customer contacts – an active control process for information exchange with customers
- Managing customer knowledge -- controls retention of information and accessibility
Radical changes in the marketplace mean that it is no longer sufficient to conduct periodic surveys to monitor changes in the marketplace. The marketplace changes daily and customer expectations can change significantly and quickly, often instigated by aggressive competition. The continuous and systematic capture, retention, and analysis of customer information, from virtually every point of customer contact, is an essential activity in a successful CRM strategy.
Information Exchange
Important advances in contact management software are being made to support on-going information exchange between a company and its customers, and for seamless integration of multi-channel communications with customers. There are several important sources of customer information available to the CRM project team, including:
- Transaction systems for detailed customer behavioral data
- Customer contact channels - call centers, retail outlets and electronic commerce web sites
- Outbound marketing programs for results of promotional campaigns
- Secondary data sources -- credit data, and compiled demographic and lifestyle data
- Market research for insights beyond those revealed by actual customer behavior and dialog
When properly integrated into the CRM framework, these information sources provide a continuing stream of up-dates from customers that enable companies to respond quickly to their evolving needs and priorities.
Predicting and Maximizing Customer Value
A fundamental concept behind a successful CRM strategy is that only through operational excellence and technology leadership can an organization predict and maximize the value of each customer relationship.
There have been many successful, effective CRM projects initiated and implemented over the past 15 years, and there are numerous examples of proven implementation processes and enabling technologies available to serve as models. Examining these successful models and learning from them can dramatically accelerate the transition. A well-conceived planning phase can anticipate and resolve many of the major hurdles that typically impede implementation. By taking advantage of proven methodologies and technologies, companies can realize early and tangible returns on CRM investments.
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