CRM Software as a Customer Loyalty Tool

The Internet and Web offer tremendous opportunities for businesses of all sizes to promote and market their products and services. They’ve also opened up tremendous opportunities for consumers to compare one company’s pricing, delivery and customer service against another, and with the click of a mouse and a few keystrokes, switch their allegiance from one supplier to another. In short, the rapid expansion of commerce on the Web has elevated the already important subject of customer loyalty from very important, to crucial. Building and maintaining customer loyalty is one of the most important components of customer relations management (CRM).

CRM is a bottom to top strategy targeting every aspect of winning and maintaining customer loyalty. Customer loyalty is key to establishing and growing a loyal customer base. Successful businesses who concentrate on developing one-to-one relationships with their customers. They find that by concentrating on customer loyalty increase in sales become a natural by-product of their efforts. The loyal customers they court will also become word-of-mouth ambassadors for the company—potentially drawing new customers to the business.

Excellent products and responsive customer service alone won’t insure long-lasting customer loyalty. Customer satisfaction is great, but it doesn’t always equate with customer loyalty. It’s necessary to become familiar with every aspect of a customer’s wants and needs from your company, and seamlessly incorporate operating procedures that match those needs.

Specialized CRM software is a tool that an increasing number of businesses are employing as a tool in developing a well managed CRM program. CRM software is highly effective in helping a business develop a comprehensive data base of their customer’s wants, needs, expectations, and aspirations. These data bases, though, should be viewed as just one part of any overall plan—albeit an important one.

Just the mining and storing of well-ordered customer days alone won’t do much to spawn customer loyalty and retention programs unless it’s used as a building block for structured action plans. Effective managers need to examine the data and then ask themselves the critical question, “What’s the next step?” Here’s some ideas for initiating an effective CRM program:

1. Don’t assume that customer satisfaction will automatically breed customer loyalty. They’re related, but not equal. Consistent customer loyalty involves every aspect of the client/business relationship—it’s a lot more than mere satisfaction with the end product. Loyal customers are the ones who feel that the business has tailored every level of their purchasing experience to meet their individual needs. They’re delighted customers.
2. Use CRM and CRM software to identify your best customers. The software is an invaluable aid in ranking the businesses most profitable current customers, and which ones will be the most profitable in the future. Once a see identifies its best candidates, they can focus changes in business practices to better serve those customer’s individual requirements.
3. All customers are not the same—different customers need to be treated differently. This is a business reality that many operations fail to acknowledge. What entices customer loyalty from one group of customers may be completely or only marginally effective for another group. It’s often necessary to use CRM data to develop individual rewards, services and benefits that target specific customers.
4. Be realistic about customer loyalty—a business can never get complete loyalty from all of their customers. Identify customers who are the most likely to remain loyal and concentrate your efforts on those individuals or segments.
5. CRM software is an essential part of your complete customer relations package, but it’s a means to an end, not the end itself. Your use of the technology should be driven by the customer needs.

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