Tuesday, September 4, 2007

CRM - The Forgotten Marketing Tactic

Hi Folks!
After a nice summer break, I'm back with important information on customer relationship management (CRM). Most companies, public, private and entrepreneurial typicaly get so caught up in revenue generation and customer acquisition they forget about retention and managing the relationship with current customers.

Is revenue and new customers important? Heck yeh. But don't forget that an effective CRM plan will also positively impact your bottom line and overall profit margin.

A Harvard Business review study on customer profitability and lifetime value revealed that companies can boost their profits by almost 100% by retaining just 5% more of their customers.

A study by CRMGuru found that company’s that successfully implemented retention plans increased customer satisfaction by 51%.

It's important to understand the complete Customer Relationship Cycle and what you should be striving for. The goal should be post-satisfaction stage and include loyalty, and ultimately, advocacy. This is where many companies, big and small, fall short.

Customer Relationship Cycle
--Awareness. Prospect recognizes need for service
--Knowledge. Gained thru PR or promotional presence
--Consideration. Prospect weights needs vs. solution
--Selection. Prospect seeks solution based on ease of information, opinions of others, how your product meets their individual needs
--Satisfaction. Prospect becomes client (many companies stop efforts here -- after the sale)
--Loyalty. Customer demonstrates commitment to firm by repeat purchases
--Advocacy. Customer becomes advocate of your product and actively promotes it. This is the most personal relationship you can have with your customer!

According to permission marketing guru, Seth Godin, the process to move a prospect thru the sales cycle is:
--Stranger to Friend
--Friend to Customer
--Customer to Multi-buyer
--Multi-buyer to Advocate

You see, the "advocate" is the golden goose. This person not only is loyal to your company with repeat purchases, but is your #1 free marketer – they tell their friends, family and business associates about your company's products and services and they're not even on your payroll!

So make sure you include a CRM Plan as part of your overall Marketing Strategy and benchmark meterics before and after plan is implemented...I'm sure you'll see favorable results.
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