Customer Relationship Management (CRM) is a business strategy to select and manage customers to optimize long-term value. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective Customer Relationship Management, provided that a retailer has the right leadership, strategy and culture which flows to the last store level.
In simpler words, Customer Relationship Management is exactly what the phrase stands for: the process of actively deepening the knowledge (not data) about the customers over a period of time, and then using that knowledge gained to customise the business and strategies to meet customer’s individual needs.
Efficient Customer Relationship Management is extremely important for all the retailers and most of them lay a huge stress on ensuring that all the following activities are performed at best levels.
Customer Marketing
Customer Marketing is the activity of ensuring that more and more customers come to the retail store. Therefore, every store performs some activities at the local level only to bring the customers in larger numbers & repeatedly to the store. The set of these activities is called Customer Marketing. The store level promotions, events, etc. are all a part of this activity.
Customer Service
Customer Service is the activity of responding to inquiries and customer complaints about their product or service; either by telephone or mail. Quality customer service usually leads to increased sales and customer attitudes.
It must be noted that all the miscellaneous services described in the miscellaneous services section also form a part of the customer services. However those activities are on the periphery of the main activity on which a store must focus on. These services mainly are related to inquiries and complaints as shown above. These are basic, no-frill services which have to be a part of every store, whereas the miscellaneous services are add-ons which a particular retailer may want to provide or may decide to stay away from.
Customer Loyalty
Customer loyalty is the phenomenon of customers becoming so loyal to a particular retailer that they go to make all the possible purchases at that retailer, whenever and wherever they have to make purchases.
Most marketers stress upon the importance for a store to ensure the customer’s loyalty. It is a proven fact on a worldwide basis that most business need to spend only a small fraction on retaining its customers than in generating equal numbers of new ones.
Customer loyalty is a behavioral concept. It reflects how customers act and react to a retailer’s market offering. Loyal customers exhibit non random behavior towards the retailer over an extended period of time. Customer loyalty suggests consistent, frequent, and biased behavior towards a retailer. Customer loyalty is about building strong and lasting relationships.
It has also been proven that customer loyalty begets more customer loyalty and the resulting benefits can be enormous. The flywheel effect starts with loyal customers who represent more repeat sales, which leads to improved market share, which results in lower cost structures and better profit margins. Higher profits mean more profit sharing, which leads to higher job satisfaction and employee retention. Loyal employees provide better customer service, which leads to greater customer loyalty.
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