What is CRM? It’s the acronym for Customer Relationship Management. It’s a customer-centric philosophy that captures information and seeks to provide meaning to long-term relationships. The story of CRM is the story of businesses. When a town’s economy was small, personal interactions were abundant. As an example, a baker had acquaintances who were also customers. As a result, he would reduce prices on someone’s birthday and be a friend and at least friendly with most of his customers.
Today is not as easy to be a corporation and have that level of connection with customers. That’s why CRM is here to help.
What is the churn rate?
The churn rate is the percentage of a business losing customers per year. I’ve previously written about Key Performance Indicators KPIs, and churn rate is a high-level KPI. How many customers are a business keeping? If the percentage is unacceptable, it may be a good idea to slow down the acquisition of new customers and fix why customers are deserting. This way, the company can be profitable again and will make the most out of its marketing and sales actions. Reducing the rate of attrition is a proven way to increase profitability.
What is a customer?
A customer is a person who uses or buys products or services from a company. A customer-centered approach to business is the modern way to manage. A business should strive to please and fulfill the needs of these customers. It can be said that customers are the raison d’être of a business-oriented organization. Don’t forget that in the buying process, some individuals may do the research, some take the decision, some buy the product, and sometimes other people end up using the product. Be aware of the decision-makers, and you’ll be on your way to successfully fulfilling customers’ needs.
What is customer-centric?
Being customer-centric is to plan and execute with the customer in mind and place the customer at the organization’s center. This is easier said than done because when a business is pressed for results, they usually focus on promotions and sales activities, which aren’t customer-centric. This means that it’s also a goal worth pursuing and worth remembering at every step. This way of thinking is embedded in most successful organizations and considered in every high-level strategy the business seeks. Results speak for themselves; customer-centric organizations tend to become leaders in their fields.
What is Customer Lifetime Value (CLV)
How profitable is a customer while their relationship with the business lasts? CLV answers that. A large percentage of companies think their customers should perform a one-time transaction. Truth is, it’s easier to sell to a current customer than obtain a new one. Money is left on the table when you’re not pursuing cross-selling and upselling. For example, if a customer buys an entry-level product for $15, then, in 2 months, acquires a $50 product, and a year later, they get a $150 service, the CLV is a total of $215.
What is a Model?
Many organizations use a simple visual model to represent what stage customers are at, at any given time. For example, at the bottom of a pyramid, you can find prospects, then, at the upper level, some of these prospects become customers. Then, these customers become bonded customers, and at the top of the pyramid, they become advocates (brand ambassadors who leave positive reviews and get referrals.) This model simplifies most of the data to show, at an executive level, how the business is going. This allows for corrective measurements to be taken and a glance at what’s already working.
What is a prospect?
An individual not yet a client is interested in the products or services a business offers and fits a particular criterion. Sales are the lifeblood of an organization, and sales are made up of prospects. To be labeled as a prospect, many organizations qualify them. Is the person an ideal customer? Does it fit our criteria? Answering these questions separates a lead from a prospect. The difference is that a lead is not qualified. Prospects are acquired through various means, such as direct and inbound marketing, as part of a sales process, etc.
What are consumer touchpoints?
While their relationship lasts, a business will present a consumer with many ways to get in touch with them. These ways are known as touchpoints. A touchpoint can be a consumer answering an email newsletter, purchasing a product, calling a call center, etc. A wise brand should take care of presenting a unified voice across these channels. A functional CRM is behind these touchpoints gathering data and is sometimes used as the front end. Touchpoints can be separated into post-purchase, purchase, and pre-purchase. This way, an organization can prioritize its communications and responses to clients’ behavior.
What is customer data?
Gathering data is a crucial CRM activity. Sometimes acquiring information happens even before a prospect becomes a customer. Data can be transformed into insights that inform a CRM process that informs the business. Customer data speaks loudly. It shows your customers’ age, where they live, what they think about your products and services, and so on. What customers drive 80% of revenue? What customers present 80% of complaints? The answer to these questions paves the way for strategic decisions that can transform the business and its profitability.
Humans will have to think, making the process easier through CRM software.
What is Social CRM?
CRM has evolved to the point where, with the addition of social, it can be called CRM 2.0. Today, many consumer touchpoints happen inside social networks. The benefits are many. First, millions of individuals can now read positive customer satisfaction through social media. Social media should be integrated into a Customer Relationship Management strategy and software. If you think about it, it’s easy for consumers to get in touch through a social network. A customer-centric company applies these insights to its strategies and future proofs.
This creates all-around experiences for the consumer, reciprocating with their adhesion to the business.