Peter Drucker was an Austrian author of numerous economics and economics-related literature and a Professor of Management. He once said, “The purpose of a business is to create customers.”
Implied in his words and his work is the importance of keeping those same customers and of growing the depth of their relationship with you. After all, as research by Frederick Reichhold and Earl Sasser of the Harvard Business School shows, most customers are only profitable in the second time that they do business with you.
They are correct. Initially, new customers cost you money – money spent on advertising and marketing and money spent learning what they want and teaching them how your products/services would suit them.
Customer relationship management (CRM) can be the single strongest weapon you have as a manager to ensure that the customers become and remain loyal. It is the single strongest weapon you have, even before your people.
What is CRM?
Sounds like heresy? Let us explain what we mean. Great employees are and always will be the backbone of any business. But employee performance can be enhanced or hampered by the strategy you set and by the tools that you give employees to get the job done.
Done right, CRM is both a strategy and a tool. In your hands and in the hands of your team members, CRM comes to life, keeping you and your team on course and able to anticipate the changing landscape of the marketplace. With CRM, loyal customers aren’t a happy accident created when an exceptional customer service representative grasps and responds to a customer need.
Instead, you have at your fingertips the ultimate advantage – customer intelligence – data turned into information and information turned into a customer-satisfying action.
Implementing CRM is a non-negotiable in today’s business environment. Whether your customers are internal or external, consumers or businesses, whether they connect with you electronically or face to face, from across the globe or across town, CRM is your ticket to success.
Let us see what really CRM is. CRM is a comprehensive approach for creating, maintaining and expanding customer relationships. Let’s take a closer look at what this definition implies.
First, consider the word ‘comprehensive’. CRM does not belong just to sales and marketing. It is not the sole responsibility of the customer service group. Nor is it the brainchild of the information technology team. While any one of these areas may be the internal champion for CRM in your organisation, CRM must be a way of doing business that touches all areas. When CRM is delegated to one area of an organisation, such as IT, customer relationships will suffer.
Likewise, when an area is left out of CRM planning, the organisation puts at risk the very customer relationships it seeks to maintain.
The second key word in our definition is ‘approach’. An approach is “a way of treating or dealing with something”. CRM is a way of thinking about and dealing with customer relationships. We might also use the word strategy here because, done well, CRM involves a clear plan.