- Customer relationship marketing (CRM) involves a business focusing their marketing efforts around building a deep understanding of customers, consistently meeting customer needs and developing long-term customer loyalty
- Marketing strategies and tactics are focused on four key areas
Diagram: CRM Strategies & Tactics
Customer relationship marketing involves the acquisition, retention, expansion and reactivation of customers
Customer acquisition
- Attracting interested consumers and converting them into customers to achieve growth, make money and improve chances of business survival
- Businesses can acquire customers in many different ways, including
- Building a strong brand identity
- Delivering excellent customer experiences
- Providing clear information
- Offering special rewards, such as price promotions
Customer retention
- Customer retention involves encouraging customers to remain loyal to a business and its brands over time
- Encouraging loyalty is important for several reasons
- Attracting new customers often costs more than retaining current customers
- Loyal customers tend to be valuable repeat customers
- Retained customers can refer new customers to a business
- Word-of-mouth marketing is a form of free marketing for a brand
- Happy customers talking about a business or brand in positive ways can help persuade people they know to become loyal customers as well
- Businesses can retain customers in many different ways, including
- Customer loyalty schemes
- Regular communication about new products or promotional offers
- Targeted price promotions or other perks for existing customers
Customer expansion
- Customer expansion is the process of encouraging existing customers to increase the value and frequency of their spending on products and services over time
- Businesses can achieve customer expansion in several different ways, including
- Upselling by encouraging customers to upgrade to premium products
- Cross-selling by offering customers a related product or service
- Providing add-ons such as insurance policies, extra features or extended warranties
Customer reactivation
- Customer reactivation involves reaching out to customers who have previously expressed interest in or purchased a product but have since become disengaged
- Businesses can adopt a range of techniques to reactivate customers, including
An Evaluation of CRM Strategies & Tactics
Benefits of CRM
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Drawbacks of CRM
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- CRM involves a business developing a detailed understanding of customer needs and preferences that allows them to precisely target promotional activity
- Focusing on keeping loyal customers is usually less costly than persuading new customers to choose a businesses products over those of rivals
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- It requires investment in training and development of staff to ensure that high customer service expectations are consistently met
- Without a relentless and expensive focus on researching and understanding customer needs, CRM is unlikely to be successful
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