Chapter 13. CRM : Customer Retention Strategy. Customer Relationship Management Chapter 13 CRM Customer Retention Strategy

Transcription

1 Chapter 13 CRM : Customer Retention Strategy Customer Relationship Management Chapter 13 CRM Customer Retention Strategy

2 Objectives Concept of customer retention Customer centric attitude Internal collaboration Designing data base carefully Personalization of offer Choosing the right CRM tool Building relationship Importance of retention of customer Levels of Retention Strategies Customer Relationship Management chapter 13 CRM : Customer Retention Strategy

3 Customer Retention Customer leaves organizations for the competitors for a number of reasons, like dissatisfaction with the product or services, product obsolescence, technological obsolescence, availability of an alternative and loss of confidence. The organization needs to retain customers by being responsive and sensitive to their needs, views and feelings. Customer Relationship Management chapter 13 CRM : Customer Retention Strategy

4 Customer Centric Attitude Companies to take cognizance of their processes from customers view point and make necessary adjustments to enable higher customer facilitation. All processes involve customer be taken into account. Access the bank through internet, ATM, Telephone and retail banking are indeed customer centric examples Customer Relationship Management

5 Internal Collaboration A grate deal of internal coordination is necessitated among various functions, including those situated in diverse locations. An important aspect that needs to be considered is the resolution of ownership issues and boundaries across department. The system has enabled the individual companies to understand which customers could be connected by them directly. Customer Relationship Management chapter 13 CRM Customer Retention Strategies

6 Designing Databases Carefully Use of database is an integral part of CRM initiatives. Unfortunately, the usage is done in a blatant manner that treats any collection of names and contact addresses as a database. As a result of improper usage, the offers sent to various prospects fails to create interest in the receipts. Therefore most of these efforts go waste and unfortunately, database marketing is blamed for the failure. Proper use of databases creaste a remarkable results Customer Relationship Management chapter 13 CRM Customer Retention Strategies

7 Personalization of Offer The objective of a CRM initiative is to target the individual customer by differentiating on the basis of needs and desires. Each customer has a unique set of needs and demands. Customer Relationship Management chapter 13 CRM Customer Retention Strategies

8 Choosing the right CRM Tools Selection of right CRM tools can be done on the following criteria: Ability to incorporate changing requirement Usability from staff point of view Existing systems assimilation Robustness and scalability Customer Relationship Management Chapter 13 CRM Customer Retention Strategy

9 Building Relationship Apart from delivering adequate customer value, the challenge for a CRM initiative is to build a relationship with the customer. The sensitivity with which the relationship is nurtured over the years. Examples Johnson & Johnson child care Fevicol Carpenter news letter for better craft Customer Relationship Management chapter 13 Customer Retention Strategy

10 Retaining customers through added benefits With customer attrition rate hitting the roof, the primary challenge for CRM is to ensure customer retention. The key to customer retention is to understand behavior and predict their needs and demands. To use BI as explained by J Langseth and V Vivatrat, proactive usages are : Real time data warehousing Data Mining Automated anomaly and exception detection Proactive alerting with automatic recipient determination Seamless follow through workflow Automatic learning and refinement Geographic information systems Data visualization Customer Relationship Management chapter 13 CRM Customer Retention Strategy

11 Conflict Managements and Customer Retention Actions to help customers dissatisfactions: Being sensitive and empathizing helps a great deal Positive and timely action should back up the promises made and if not it will worsen the situation Organization must exhibit cooperative attitude and accommodate the client Companies must take all actions to prevent similar incident in future If the customer is not worth retaining, leaving him is the best strategy. Customer Relationship Management chapter 13 CRM Customer Retention Strategy

12 Strategic Customer Care Five pillars of strategic customer care are profiling customer, segmenting them, researching them and investing in technology and managing them through consistency of treatment. Following steps are suggested for strategic customer care Align management team and mobilize for action Assess your readiness for change Segment your customers and Profile your strategic customer Analyze the gaps and Mobilize your strategic account them Outline your strategic action program Validate and access the fit of your action plan Train your teams and Implement your strategies and activities Track your performance and adjust as necessary Customer Relationship Management chapter-13 CRM Customer Retention Strategy

13 Establishment of Re Contact Customer retention marketing is a tactically driven approach based on customer behavior. It is the core activity going on behind the scenes in Relationship Marketing, Loyalty Marketing, Database Marketing,Permission Marketing and so forth. Here s the basic philosophy of a retention oriented marketers: Post and current customer behavior is the best predictor of future customer behavior. Two groups of potential buyers : People who are a perfect demographic match for site but have never purchased online People who are outside the core demographic for your site, but have purchased repeatedly Active customers are happy (retained) customers. Retaining customers means keeping them active with you. Retention marketing is all about Action Retention Feedback Repeat Retention marketing requires allocating marketing resources It means you have a choice as you frequently do in marketing instead of spending the same amount of money on every customer Customer Relationship Management chapter 13 CRM Customer Retention Strategy

14 Levels of Retention Marketing Financial bonds The customer is tied to the firm primarily through financial incentives lower prices for greater volume purchase or lower prices for customer who have been with the form a long time. Example McDonald happy menu Social Bond Retention marketers build long term relationship through social and interpersonal as well as financial bonds. Example doctors patient relation Customization bond More than element of financial and social bonds, strategies encompassed within a customization strategy to deliver a higher level of service to every customer across all channels, product lines and geographies knowing customers habit and want. Structural bond Specially designed strategy to provide customized services to the client that are technology based and make them more productive Customer Relationship Management chapter 13 CRM Customer Retention Strategy

15 Summary All customers are not equal. The good and valuable customers must be retained. During customer acquisition companies focus on market share, then on retention and later on differentiated services to the best customers as a part of a well planned customer retention strategy Customer Relationship Management