The basics of a CRM strategy

The ultimate outcome of an effective CRM strategy should be customer loyalty and increased customer life time value, which will positively contribute to your bottom line.

As a rule it is more expensive to recruit a new customer than to re-serve an existing customer, as the relationship of trust already exists. It therefore makes good business sense to spend some time on developing a CRM strategy that engages your customers.

Often the term CRM is used to describe business software, but your software shouldn’t be mistaken for an effective CRM strategy. CRM software systems are used to enable your customer service team to execute your strategy, a CRM system without a strategy will remain just a system and not the valuable asset that it could be.

What are the building blocks for a good CRM strategy?

1. Know your customer: To get value from your client relationships, you should know the people who you are trying to build relationships with. It’s important to understand what motivates them, how they buy, how often they buy and what their preferences are. If you truly understand your customers you’ll be able to serve them better, at a time convenient to them, at a price they are willing to pay, at an appropriate location, with products and services they would like to buy.
2. Aim to add value: Once you have a firm understand of your customer, it will be easier to figure out how you can add value to the relationship, increasing loyalty and profits.
3. Keep it up: Building relationships with customers is an ongoing process, and as with any relationship you should make contact on regular basis. A sales e-mail once a year is not an effective way of building valuable relationships. Ongoing, regular communication that aims to add value will be much more effective. When interacting with clients, you should at all times make sure that you are engaging the client and not just spamming or annoying. The worst mistake you can make is engaging in irrelevant, and or irritating communication at irregular or inappropriate times via inappropriate channels.
4. Effective processes: Excellent execution of effective operational processes form an important part of any CRM strategy. These may include service processes, data collection etc.

Which other factors are important?

1. Data, data, data: The data your business collects should be accurately captured and mined to ensure you can build value driven customer relationships. Very often businesses don’t realise that some of the data they collect could give them a significant competitive advantage if used to its full potential. Know your data, what you collect and how you could use it to develop a superior offering.
2. Evaluate: When it comes to strategy it’s important to measure and evaluate its effectiveness using regular intervals so that problems or successes can be identified, rectified or expanded early on.

Building long-term relationship with your clients is an extraordinary adventure that will enable your business to become as successful as you’d like it to be. Like Columbus who discovered new continents, you can discover new areas of growth and prosperity by serving and listening to your clients.