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 the economy of a town was a small one, personal interactions were abundant. As an example of this, a baker had acquaintances that were also customers. He would reduce prices on someone’s birthday, and would 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 per year at which a business is losing customers. I’ve written about Key Performance Indicators KPIs before, and churn rate is a high-level KPI. How many customers are a business keeping? If the percentage is not acceptable it may be a good idea to slow down the acquisition of new customers and fix the reasons 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 fulfill customer’s needs.
What is customer-centric?
Being customer-centric is to plan and execute not only with the customer in mind but placing the customer at the center of the organization. This is easier said than done because when a business is pressed for results, they usually go heavy on promotions and sales activities, which aren’t customer-centric sometimes. 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 pursues. 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 businesses 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. This means that money is left on the table when you’re not pursuing cross-selling, and upselling. As an example of this, 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?
To represent what stage customers are at, at any given time, many organizations use a simple visual model. As an example of this, 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 to take a glance at what’s already working.
What is a prospect?
Is an individual who is not yet a client but is interested in the products or services a business offers and fits a certain 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 a variety of means, such as direct and inbound marketing, referrals, 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, the purchase of a product, calling a call center, etc. A wise brand should take care of presenting a unified voice across these channels. A useful CRM is behind these touchpoints gathering data, and sometimes being 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 client’s behavior.
What is customer data?
Gathering data is a crucial CRM activity. Sometimes acquiring information happens even become a prospect becomes a customer. Data can be transformed into insights that inform a CRM process, and this way it informs the business itself. Customer data speaks loudly, it shows what age your customer is, 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 to strategic decisions that can transform the business and its profitability.
Humans will have to do a lot of thinking, and the process is made 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, positive customer satisfaction can now be read by millions of individuals 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. This means that a customer-centric company applies these insights to its strategies and future-proofs itself.
This creates all-around experiences for the consumer, which reciprocates with their adhesion to the business.