It hardly needs explaining: satisfied customers buy more, pay better, and are your best ambassadors. And dissatisfied customers leave. It all seems easier said than done, but how do you get satisfied customers? The answer is: by exceeding your customer’s expectations! But how do you know what their expectations are? And should you really always (want to) do everything for all your customers?
Customer relationship management (CRM)
The answer to the question of what you should and shouldn’t do for a customer lies in customer relationship management, also known as CRM.
Many people immediately think of a computer program,
but the essence lies in the strategy.
A CRM strategy is about managing customer relationships in a structured way.
A good starting point is to treat customers based on their value to your company. The more value a customer has for you, the more you can invest in your relationship. Trying to do everything for everyone isn’t wise. After all, someone who buys something from you at a significant discount the first time simply has less “value” for your company than a customer who has been buying many products or services from you at full price for years. You can do much more for such a customer. So, if a customer who always buys only the lowest price from you has a complaint and claims an extra discount, it’s a different story. You could, for example, politely inform them that this is unfortunately not possible.
And if they then walk away angrily, you should think: let someone else lose money on them.
But if that valuable customer has a complaint, you do much more to resolve the problem quickly and effectively. And because you know what its value is for your company, you also have a much better idea of how much you can spend on it.
So you need to carefully consider how you should and can interact with your customers, based on their value to your company. By understanding their purchasing behavior, needs, and expectations, you can connect them and create targeted offers based on that. This allows you to develop a CRM strategy that will increase customer satisfaction and earn you more money. Because that’s what customer relationship management is all about.
Treat your customers differently based on their value. Distinguish between top, good, marginal, and loss-making customers. However, since you often only see which customer falls into which category over time, it’s best to keep that in mind. Therefore, track the revenue, or even better, the profit per customer per year, and record it in a table. This will give you better overview and insight.
Customer lifecycle as a tool.
To help determine whether a customer is truly worth investing in, you can use the Customer Lifecycle Model. It distinguishes different phases in your customer relationships. It helps you acquire more valuable customers (1), how to deal with new customers (2), established customers (3), and ultimately loyal customers (4), what to do when they leave (5), and finally, who to try to win back (6). Remember, it’s much cheaper and more efficient to retain customers than to acquire new ones…
CRM software
CRM software is a tool. It helps you gain insight into what you need to do, when, and for whom.
So, first consider what you want to do and only then look for the right software package—not the other way around! Of course, you need such a system to record accurate customer data, including all transactions and communications.
Unfortunately, all too often, companies already consider this a ‘CRM,’ which is a shame. The real goal of customer relationship management, or CRM, is to make more money from (satisfied) customers.
