What is Customer Relationship ?
Customer relationship management plays an integral part in a typical company's marketing system. CRM is a process of gathering and analyzing customer data. Learn about the eight phases of the customer experience journey in this You must quickly affirm the new customer's decision to do business with you. post- sale interaction, when the relationship between customer and. Customer Relationship Management: A Strategic Imperative value predicts how much profit is associated with a customer during the course of their lifetime relationship with a company. Relationship Stage, Typical Marketing Activities.
Getting to this stage will result in what are called reactive referrals. These are the referrals that require little or no effort from the referrer and, if you have lots of contacts, you can run your business at this level.
This is a lucrative position to be in if you have multiple sources referring clients your way. Remember, trust can take a long time to establish and a heartbeat to lose so handle it delicately.
Reciprocity This is the holy grail of networking and cannot be achieved until Exposure, Knowledge and Trust have been established. When a business relationship has reached the reciprocity phase, each participant has the tools, knowledge, ability and, importantly, the desire to pass referrals to the other. Giving people the desire to help each other is the critical ingredient for this most lucrative of business relationships.
So, with all this in mind, to drive business relationships to the reciprocity phase, you need to be dealing with referral partners who have the same target market as you. There are some metrics to consider during this phase: You need to be considering your churn rate during this phase. Your customer churn rate signifies how many clients you have lost once you have reached this phase. This means that have secured a sale but now the customer has dropped out of the customer life cycle.
The lifetime value of a customer is the prediction of a net profit that is attributed to your relationship with that customer. If your customers are making a single purchase before disappearing, the lifetime value of the customer is small. Grow Customers Growing your customers starts with un-bundling. The ultimate goal of maintaining your customers is to be able to ask them for referrals. But to make it easier on the customers you already have, you should offer a product that is broken down into smaller parts.
Breaking the product down into multiple offers is not a problem. You can also up-sell products. This is an opportunity to let referred customers get in on the action without the risk and then offer them the full product at an ideal price. Cross-selling products is one step up from an up-sell. When you cross-sell your product, you are selling a product that is related to but not a part of a product that the customer previously purchased.
Once you are able to cross-sell successfully sell two separate but related productsyou will be able to as for referrals. These referrals are very valuable because they help grow your customer base During this phase, you will want to consider the following metric: Customer lifetime value, at noted before, is the estimate of how much money your customers will spend with you over the life time of your relationship.
You can calculate this with the following equation: You then take the Lifetime figure and put it into the following equation: Web mobile Customer Relationship Life Cycle 1. Get customers Getting your customers when you offer a web mobile product is different than when you have a physical product. Although you will still use earned and paid media to acquire the customers, there are fewer steps.
When you are using media of any kind to acquire customers, you want to be wary of the cost. You will usually measure this by cost per thousand hits. This means that you want to know roughly how much you spent on media to get around 1, hits.
You will want to measure this a few times to make sure that you know where the customers are coming from. This prevents you from investing in media that offers little return. This also allows you to see if your most valuable traffic is organic or if you are paying for it through media activities. Once you have acquired your customers, you need to activate them.
This means collecting their data from them. At this point, you will want to note your cost per action CPA. The cost per action agreement will relate directly to your advertising costs. A cost per action is not a cost per click.
Instead, a cost per action is based on a qualifying action.
The Three Phases of CRM | Bizfluent
For example, you might have an agreement that you only pay for advertisements that resulted in registration on your site. Cost per action is a low risk form of advertising for businesses. But it is still essential to know how much you are paying just to get people to perform an action with your site.
Keep Customers Keeping customers is just as important when you offer a web mobile product. However, you will go about it slightly differently.
Outreach programs are a great way to keep customers while still growing them.
Understanding and Managing the Customer Relationship Life Cycle
Outreach programs are great for current customers to share the service on social media and get a reward in return.
Loyalty programs also work on the online mobile platform. You can also keep up to date with customers with blogs, emails and RSS feeds. Some companies choose to keep customers by running contests or events. These can also be bundled into your outreach program. Grow Customers Growing customers is relatively similar on internet mobile products as it is with physical products. You want to give them a chance to pick up a smaller product at smaller price.
Then you can up-sell, next-sell and cross-sell to both existing and referred customers. Ultimately, you want it to be as easy as possible for your customers to send you referrals. When you get these referrals, they should always start back at the acquire phase and make their way back. This viral loop is important for the success of growing your customers.
It can be simple or it can be complex. You can choose to do it over a number of years or over a number of months. All of this depends on the kind of business you run.
The following metrics can be used in the Customer Relationship Life Cycle to determine your success at varying stages of the program. It is important to perform these measurements throughout the program.
This is because you do not want to keep sending customers down a leaky sales funnel. It is better to figure out where the weak points are early.
Then, they can be fixed and you can reduce your churn rate. Remember that marketing is not based on your gut instincts alone. It is a science that requires measurement. The biggest overall metric that you will use is the cost to acquire a customer CAC.
The CAC is the total amount of money that you spend on bringing a customer to the point that they make their first purchase. These costs can include inbound marketing, free trials, conversions, inside sales, channels and partnerships. A balanced company will spend less on acquiring customers than it will receive of the course of the relationship with the customer.
Ideally, your lifetime value should be greater than three times the CAC. Customer Retention The real purpose of gathering data on acquired customers is to improve retention rates.
The typical customer attrition rate for companies is around 15 to 20 percent per year, but a Forbes article indicates that some industries experience significantly higher average rates. Effective data analysis, regular and systematic follow-up communication with contacts, and well-serviced accounts help you reduce your company's churn rate.
Data analysis allows you to identify the traits of prospects and customers that offer the best lifetime earning potential as well, which enables greater focus on retaining core customers.
Video of the Day Brought to you by Techwalla Brought to you by Techwalla Customer Extension The customer extension phase of CRM includes activities intended to draw out the length of typical customer relationships, enabling greater revenue. A simple perspective is that satisfying a customer during one buying experience increases the likelihood of a follow-up visit. Over time, delivering quality solutions, following through on commitments and addressing problems convert a buyer into a loyal customer.
You also can enhance revenue through add-on product selling and cross-selling, which involves recommending unrelated solutions.