Everyone knows the customer is king these days. The question is whether your customer relationship strategy is making customers feel like they're wearing a crown.
To make sure your customer relationship management (CRM) strategy really works, embrace these five steps:
1. Choose a Destination
CRM expert Chuck Schaeffer compares CRM strategy to a map. He says it identifies your baseline performance (your starting point), your destination in SMART (specific, measurable, actionable, realistic, and time-bound) terms, and customer and business outcomes. It also designs the methods to achieve those measurable objectives in the shortest route.
A CRM strategy should have specific objectives that align with corporate strategy and customers' top priorities. “It's the destination—or the identification of measurable objectives that matter—where most companies fall short," he says. “Instead of identifying specific objectives such as a 5% increase in customer acquisitions, a 10% growth in customer share, or a 15% increase in customer retention, uninformed implementers simply install CRM software and hope for the best."
2. Determine Relationship Stage
Relationships—both personal and professional—ebb and flow. A study from MIT Sloan found that customer relationships evolve through four states that can be pinpointed by using short customer questionnaires. These states are "transactional" (the beginning of the feeling out process), "transitional" (where trust and commitment grow), "communal" (the 20% of customers who provide 80% of sales), and "damaged" (the customer may want to leave but can't).
Each stage requires a different marketing approach. For example, transactional customers might only merit an occasional check-in, but communal customers need extra love and care. Managers should “regularly assess negotiation procedures and contracts with [communal] customers—with an eye to identifying and addressing potential points of conflict—and regularly review the fairness of business procedures and distribution of profits," researchers say. The idea is to continually grow relationships while putting the appropriate effort and time into them—depending on their stage.
3. Personalize Your Messages
The personal touch matters. As Forbes magazine says, “Instead of bombarding previous customers with nonstop offers, use customer analytics to understand how you can customize and personalize your messaging.
Instead of bombarding previous customers with nonstop offers, use customer analytics to understand how you can customize and personalize your messaging.
For example, Petco.com provides lots of educational information for new pet owners such as articles on how to “crate train a puppy." Customers appreciate that they can easily find the information they want and need. As a result, Petco has become a trusted adviser rather than just another provider of dog collars and fish bowls.
4. Personalize Your Perks
Actions—as well as words—grow customer relationships. Home Depot is the go-to place for lumber, tools, and other items needed by DIYers. However, the retailer also runs a savvy program called The Home Depot Pro for professional contractors. These customers receive special benefits like reserved parking, expanded assortment, and online ordering with a two-hour pickup promise. Providing perks geared to the unique needs of customer segments is a critical way to build your relationships.
5. Improve Your Own Behavior
Before you leap into a CRM strategy, make sure you're ready. David Taber, a consultant writing for CIO Magazine, laid out the seven warning signs that a company isn't prepared for a customer relationship management strategy. In summation, it's important to get everyone at the company on the same page with a commitment to the customer.
Renée McKaskle, CIO at Hitachi Vantara, says his company's CRM strategy success required “a behavioral shift across the company. No longer could offline data be an acceptable practice. Nor could we have individuals in marketing, sales, services, and supply chain storing and tracking data inconsistently."
You can't expect to develop good relationships with your customers if your own employees can't get along. So, first, get everyone on the same page and put your own systems and processes in order. Then, you can focus on serving the needs of customers and developing a CRM strategy that pays off for both of you in a big way.
