CRM Strategy Cycle
Traditional marketing worldwide practice can result in nuancing revenues and maximising profits, but spending customer space, while it may be a suitable approach at times, will not always be the case. For example, in established sectors and mature marketplaces, customer acquisition may not be the most important factor in improving financial results. Increased acquisition and retention rates may not always equate to increased profitability.
While important customer metrics like as acquisition, retention, churn, and win back are essential for developing a profitable CRM strategy, just optimising any of these individual measures is not a guarantee of success. Customers’ decisions are greatly influenced by unique and tailored tactics for important customer metrics, which can lead to increased profitability. Prevalent trends in customer relationship management (CRM) data can aid in the development of these spelling tactics at each stage of the customer business relationship lifecycle, including acquisition, retention, churn, and win back.
Acquisition
It is necessary to employ mass level strategies in order to achieve the best potential customer acquisition rate as part of the acquisition plan. Any combination of mass marketing (radio, billboards, etc.) and direct marketing (telemarketing, mail, email, etc.) would be used to target eligible customers rather than interested customers.
A new strategy to client acquisition in relation to customer relationship management (CRM) is gaining ground: there is an intentional shift away from mass marketing of items and toward marketing that is focused on the end consumer. In order to keep up with rival firms, differentiating and segmenting based on demographic, psychographic, or purchasing power-related variables grew more economical and viable, and ultimately became required. With increased capability and commitment to data analysis on the part of businesses, services have gotten more particular, increasing the amount of choice available to customers.
As a result, customers have come to anticipate a greater variety of options and greater customisation while shopping. If customers can compare your brand to another brand, there will be fierce competition. However, you may always emphasise to your customers how uniquely different your products are.
For example, Apple’s transformation of its products from basic consumer electronics to more of a lifestyle item is a perfect illustration in this context. You may utilise CRM to leverage your customer data, determine what aspects of your brand are most popular with customers, and use those aspects to set yourself apart from the competition. Hence Apple was able to acquire the market by highlighting the uniqueness of their products and making customers loyal for Apple products.
Retention
Since the early 1960s, businesses have shifted their attention away from short-term acquisitions and transactions and toward long-term partnerships and customer lifetime value (CLTV). Studies have found that for every one percentage point rise in the customer retention rate, a company’s worth increases by five percentage points. Strategies for employee retention that are based on two types of bonds: programmatic bonds and humanistic bonds Programmatic bonds are made up of incentive programs and procedures that make it difficult for clients to switch service providers or brands.
The term “humanistic bonding” refers to the care provided to customers by highly trained employees. E-marketing and social networking have risen to become two of the most cost-effective methods of retaining customers and increasing share of wallet, respectively. A computerised system can also be developed by businesses that would allow them to customise their offerings by trading products and services with specific clients. Recommendations can be given based on the purchase history of the buyer as well as the purchase history of purchasers who are similar to them.
Amazon.com, for example, has a system of this nature that is much liked. Users or television programs are recommended to them automatically by TiVo depending on the programs they have previously viewed. For example, in the area of complaint handling and problem resolution, consumers contract workers can be trained to offer outcomes to customers that are commensurate with their company’s worth.
For example, Apple has retained their loyal customers. As Apple products become the sign of lifestyle and royalty, the person who once purchases an apple product is provided with an apple id. This id is helpful in excessing all the data. Even if the customer changes their phone, this id can be used in any new apple product. Hence, providing an apple id was one of the well-known customer retention strategies.
Win Back
In spite of the fact that it may be difficult to convince former customers to return, it has been discovered that businesses still have a 20-40 per cent chance of selling to them compared with only a 5-20 percent chance of selling to new prospects. Win-back plans, like most other strategies, should be founded on marketing research to be effective. Defection analysis is a sort of marketing research that aims to determine the reasons why customers abandon a product or service. These may be outside the control of the organisation or within its control. Customers who are migrating downward can also be included in a defection analysis, which can be expanded to include them.
Data mining techniques can be used to uncover patterns of consumer purchase or lack of buy that occur prior to a customer’s defection. It is necessary to do research with these clients in order to uncover the root cause of downward migration. Once a variety of promotional strategies that address the causes for defection have been devised and tested, they are then picked for use in the win back campaign. It has been discovered from experience in the telecommunications business that re-establishing every relationship is not a good idea. If companies have to give the store away in order to recoup customers, the result will have a significant negative impact on the business’s profitability.
Obtaining a large market share at the expense of a profitable but smaller market share is almost always a miscalculation. What specific strategies can be employed to promote win-back among former customers that are both effective and efficient? Consumers’ price sensitivity and behaviour in the context of reacquisition and retention have been discovered by marketers to be affected by the last price they paid in the previous relationship. Marketers have discovered that in order to re-acquire a previous consumer, the reacquisition price must be reduced.
Increase the prices of these items after the relationship has been re-established in order to maximise profit. The reacquisition and retention prices should be kept as low as possible to ensure that the second tenure is as long as possible in order to maximise market share. If the company’s revenue is derived from subscriptions, the recommendations are beneficial. It is possible to win back lost Health Club members, telecommunications consumers, and magazine subscribers more frequently than it is possible to close a new customer. Managing the win-back approach profitably is the key to success in this endeavour.
For example, Apple win back their market share by providing specific and standard services to their customers. It is well understood that the customers who use iPhones are not familiar with the Android services, hence Apple was able to win back their market share.
