It’s Not Me, It’s You: Customer Relationship Management that Won’t End in a Breakup

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Dating.

How do you feel when you see that word?  Are you overcome with feelings of hope and excitement or do you hang your head in anticipation of endless disappointment? Dating is tough, and good relationships are hard to find.

Well, if you’ve ever owned a cell phone, made hotel reservation or bought something online, you know that the relationship you have with businesses and service providers can bring as much joy and aggravation as any romantic entanglement.

Welcome to Customer Relationship Management.

Also known as CRM, this marketing courtship dance places customers and clients at the centre of some of the best (and worst) retention and loyalty practices in the history of the consumer marketplace. And like love, when it’s good, it’s really good and when it’s bad, you have to fight over who gets to keep the dog.

American Management Consultant and educator Peter Ferdinand Drucker was a pioneer business thinker in the 1940s who helped develop many of the philosophical and practical foundations of today’s business management. Drucker was fascinated by politics, society and authority and openly challenged traditional views about hierarchies and customer relations and believed “The purpose of a business is to create and keep a customer.”  A lot has changed since Drucker’s time but his values and teachings are evident in today’s definitions of Customer Relationship Management. Microsoft views CRM as “An application used to automate sales and marketing functions and to manage sales and service activities in an organization.” CIO defines it as “A strategy used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them.”  No matter the definition, modern Customer Relationship Management is powerful tool for prospecting and keeping clients in any sector.

The Set-Up

Initially too expensive for most Small Medium Enterprises (SMEs) to implement, Customer Relationship Management has like so many other business management tools, become more accessible through the magic of the  internet.  Now anyone can take advantage of personalized databases and application tools managed by a third party, housed offsite server and accessible on the cloud. Lower costs and simplified operations have leveled the playing field giving all companies a fair shot at your business, and your loyalty.

Like most good ideas, CRM was popularized in the 1990s and offered   business’ large and small the opportunity to engage in long-term and, meaningful interactions with consumers and clients. The term Customer Relationship Management can refer to a series of business practices or be used to describe an entire strategy. Businesses began tracking huge amounts of client data for example, number and nature of calls, items purchased, service complaints and later, mouse click patterns and discovered they could paint a rather detailed (and fairly accurate)  picture of who clients are, what they want and how to keep them happy.

The Break-Up

For better or for worse, Customer Relationship Management is responsible for points card systems, frequent flyer miles, and online surveys.  In the early days CRM systems were used primarily for sales and direct marketing by gathering as much data as possible and responding to customer needs based on data trends.  These days, the model has evolved to include rewards programs, freebies, VIP discounts in return for repeat business or referrals and sharing in social media campaigns. Research from AllThingsCRM.com, a resource for trends and tech in the CRM world indicates that 94% of the average marketing budget is spent persuading a customer to call. From there, about 45% of customers take the bait, pick up the phone and make the call.  Once connected they are immediately put on hold-for a about a minute. Wha..? With only 6% of the marketing budget going towards actually providing good service, most companies are leaving business executives on hold for an average of 15 minutes a day. Bad Customer Relationship Management is a turn-off, and being put on hold or repeating your story to a new person each time your call is transferred sends most of us sprinting into the open arms of a nearby (slightly hotter) service provider.

The Make-Up

Bill Gates has said “how you gather, manage and use information will determine whether you win or lose”. So how do businesses get it right? Customer Relationship Management systems are meant to be malleable; dynamic. It’s up to the service provider to find a database that best monitors interactions with customers and applications that advertise appropriately. When selecting CRM strategy, businesses can choose from several types of databases to keep up with their customer’s activity.  Knowledge databases allow a businesses to set-up RSS feeds to send blogs and links directly to clients based on their previously established interests. Businesses can also build a database focused on reputation management by monitoring and their counting mentions in social media forums and showing customers how often others are talking about it. Reminder databases are constructed to help clients consolidate and manage important dates and set-up customized reminders while Business to Business or B2B database enables service providers to create free or low cost, storage, and virtual meeting and collaboration tools and share them with clients.  Developing a system to track complaints, issues, compliments, referrals and check in on levels of client satisfaction and helps sustain the relationship after a sale or transaction.

 

Effective Customer Relationship Management happens not when businesses focus on what they have to offer the rather how they offer it.  Because everyone knows it’s the way we are treated that has us feeling good about our choices the morning after.

 

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