The Fundamentals of Customer Relationship Management

The whole exercise of building a loyal customer base and retaining it is known as Customer Relationship Management or CRM in management jargon. Although not elusive, this has always remained a challenge for the marketers of all walks of business. Small business and home business faces upto this challenge often with an uneducated approach and with mixed results.

The Fundamentals of Customer Relationship Management

The modern customer is a free thinking individual grown up and basking in the glory of economic freedom and pampered by the new found consumerism. The culmination of these results as carefully cultivated pride. Customers of the day pride in buying often what they scarcely need. They rightfully want to be treated as important.

Building and retaining customer base demands rational; break free thinking from the business owner. A holistic view and approach allows understanding demographics, financial behavior and geographic location of the individual customer. While all three are keys to successful CRM, there is a crying need to rationally understand the financial behaviors for profiling them and later segmenting.

How Do You Apply These CRM Techniques To Your Business?

Attempting anything without the full knowledge can be disastrous. You can have three segments of customers based on financial behavior.

1.    Saving driven customers

2.    Credit driven customers

3.    Transaction driven customers

The profiles of each of these segments clearly indicate their product preferences, purchase habits & frequency, purpose of buying i,e; whether ego driven or need driven.

Take for example the first segment which possibly has a combined family savings of $5,000 plus across products whereas the next segment more or less has a similar savings available through credit account suitable for lending products. The last of the segments is driven by transaction and occasionally could qualify for any of the above category but just right for $1000 anytime.

Below these averages, customers can be treated separately with redesigned and re-priced products as they might take longer on their way above.

Reengineer Products and Services Accordingly

Non traditional products may be targeted at the first segment by direct mailing, storefront caring and packaging etc. Reengineering is no-nonsense, nonstop evolution. Success lies in answering questions such as which products satisfy both customers and the owner or which segment is the prospect for each product and how packaging communicates and translates into sales etc.