CRM: The Story Behind Each Contact Name
Put yourself in the shoes of a small or medium size business making nominal profits. You have customers, but have no clue as to their purchasing pattern, preferences or even favorite products. Now, as any business owner, you obviously want to maximize your profits, but how? Your customers are at the center of your business, but we often lose track of the fact that behind each contact name or ID number there is a real person with real needs and their ultimate satisfaction and loyalty are the key to our success.
A Customer Relationship Management (CRM) tool is designed to help you attract new customers and, more importantly, retain them. Understanding this tool is vital for any company trying to stand out in today’s competitive environment.
Let’s explore 5 specific ways a CRM tool can help.
Improved Customer Relations
The biggest weapon any business can have against competitors is information, specifically, customer information. A CRM tool helps obtain and organize this information to enhance the way we can acquire and retain customers.
Consider Britain’s largest retail store, Tesco, a pioneer in CRM implementation. It reinvented the way we interact with our customers by offering them special benefits and discounts in exchange of some basic information. What set them apart is how they used this information. They channeled their communication in a much more meaningful way for their customers by providing them with exactly the things they need, how and where they need it, all thanks to CRM.
Let’s continue with our example of Tesco. With the basic information that it obtains about its customers, it can track their purchasing patterns to provide them with a better experience. For example, using CRM, Tesco identifies its most popular items for a particular segment or geographic location of their consumers and makes sure that their supply faces no shortage or perhaps it incentivizes their purchase with special offers. Thus, having this information is necessary for companies today to provide better and improved services to customers and better value to our company.
Improved Marketing Strategies
By understanding customer behavior, companies can optimize their marketing strategies to identify entry points to increase sales. Identifying the right time to market a product to the right consumer group is essential for efficient implementation of marketing strategies. Take the example of Tesco’s information about first time fathers buying diapers and more beer because they now can’t go to the pub. Using this information, the store can now direct their beer discount and sales efforts to that consumer market thus tailoring each purchasing pattern to their needs generating better results.
By using CRM software, salespersons can maximize their up-selling and cross-selling strategies. As mentioned in the paragraph above, based on previous customer purchases, they can offer complementary products to customers or a premium product in the same purchase category. For example, if women are buying moisturize cream in the winters they can offer special discount for those products or even similar products that the customer might be interested in trying if given an incentive.
Enhanced Internal Communication
As much as CRM software is a great tool for external relations, it also helps in enhancing internal communication between different departments, sharing insights to formulate strategies, controlling inventory and reducing costs for the company. For example, if a certain product is being sold in a particular store more than others, the company can re rout stale products from other locations to that particular local without having to purchase new product. It can then use the freed space from the second store to sell more item(s) that are being consumed more in that store, thus improving the overall experience in both locals, saving money and creating more value, all thanks to a little help from our CRM.
Written by Alvaro Tassano.
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