In my last article I wrote something about basic CRM features and stuff you probably need to have when searching for some CRM system. But what about the main goals of CRM? And what is the life cycle of customer relationship management system? Keep reading to find out.
CRM system has a lot of principles, but the most important ones are:
- Create a difference between customers
- Create a difference between offers
- Keep existing customers
- Maximize life time value
- Increase loyalty
The first one is to create some difference between customers. Why? Well, because not all customers are equal and same. It is important to know and understand each customer specifically because in that way it is possible to recognize exact customer needs and reward them with results. CRM needs to find the difference between customers of high value and customers of low value because in that way it is possible to find out which are your best customers. The main things CRM has to understand with customers is.
- Their taste, personality and preference
- Age and their lifestyle
- Cultural background and education
- Physical characteristics
Once all of that is settled it is possible to create difference between offerings. That is actually pretty simple because customers can be put into four categories:
- Low value customers who require high value offerings
- Low value customers who have the potential to become high value customers
- High value customers who require high value service
- High value customers who require low value service
The next principle of CRM is to keep existing customers. CRM must learn the difference between customers who are satisfied with service offered and the ones that are disappointed. That will help in improving the overall satisfaction level of every customer.
With the help of CRM it is possible to maximize share of purchase potential. That’s why it is important to identify the stage of life of some customer and life triggers for some customers. If you are dealing with customer that is in teen age he could require new car but if he gets married and has kid she could need diapers and similar stuff.
The last principle is to increase loyalty of customers. Investing into increasing loyalty of customers is very much worth because loyal customers will give you better trust and more profit. That’s why it is very important to invest into successful services and increase everything about existing products and services and offer new and innovative stuff to customers.
So, to conclude we could say that there are actually five different ways of CRM activity and those are:
- Learning stuff from customers
- Creating customer value
- Creating loyalty
- Getting new customers
- Creating profit
CRM life cycle
There are four different phases happening in customer relationship management life cycle. Those phases are:
Customer engagement is based on things like marketing planning, lead generation, opportunity management, sales activity and some other things. Marketing planning gives a way of creating marketing campaigns, defining the audience, building communications and similar. Lead generation enables lead qualification, creating call lists and monitoring the progress of campaign. Opportunity management is responsible for tracking sales and providing a forecast for the future sales. That will help with identifying some key moves and decision that have to be made. Sales activity helps with organizing daily workloads and displaying all the customer information in calendar.
In this phase some important areas like order acquisition, internet pricing, e-selling, field sales and similar areas are covered. Order acquisition enables the complete planning and organization of sales strategy, keeping up with sales budget, giving reports and forecasts about sales and similar. Internet pricing is responsible for giving online system that will allow users to compare prices online with other similar products. E-selling is a solution for selling products and services over the internet while field sales provide all the needed information to try and make sales on the field at any place or any time. Field sales area covers phone calls, appointments, visits and similar activities and it must provide reports about that activity.
The third phase called order fulfillment covers areas of tracking the life cycle of order, contract, billing and finances, order tracking and fulfillment visibility. Order life cycle process must provide the ability to track all the orders from their beginning to the end. That includes manufacturing, distribution and service processes. Contract, billing and finances should provide all the necessary information about customer like customer contract, his accounts and billing status. The order tracking area is responsible for exactly that, tracking of order until its complete fulfillment.
The fourth and the last phase is called customer service. It covers large number of areas like interaction center, internet customer self-service, service management, claims management, field service and integration of marketplace services. Interaction service must provide inbound and outbound processing of calls, easy management of e-mails and complete tracking of activities all customer contacts. The internet customer self-service should offer customers all the necessary information and needed functions on the internet. Service management area should handle customer installations, help with simple and complex offered services, give help for services that are carried out at customer site, calculate service charges, integrate information from billing, cost accounting, materials management, offer the help with strategic advices and similar. Field service must deliver and track customer and the account information for employees working on the field while integration of marketplace services should offer access to wide range of applications and services on virtual marketplace.
You can read the following .pdf file : The Five Principles for CRM Success.
And that’s mostly it for now. I hope you learned something new. Enjoy!