CRM (Customer Relations)
Building relationships with customers or increasing their loyalty to our business, company or organization, is becoming not only a success, but a necessity for business survival. However, it is not an easy and simple task. In general, and especially in this case, they condition the involvement of the entire organization.
When I start a loyalty or CRM course, to introduce the concept and make latent the reality that CRM is nothing new, but something that has been applied for a long time but in a little structured way, I take the example of the owner of a restaurant: that person who manages and works in his business, and who one of his main functions is to receive his clients, and with an absolutely spectacular memory, he remembers their names, their spouse, their children, which is your favorite table, your culinary preferences and even the last time you were there, even if it was 5 months ago; and the moment these diners arrive, he receives them, accompanies them to his table and establishes a cordial and friendly dialogue that makes the client feel at home. Is this loyalty? Undoubtedly.
Now imagine that instead of 200 clients, we have 5.000 or 10.000 or 50.000, do we have that memory capacity? Can we retain so much data? Of course not.
Before going into details, let's see why CRM has become an almost obligatory business strategy, a change in philosophy of management for entrepreneurs and marketing managers.
We will focus first on a small analysis of the microenvironment of our sector and its three most important variables: Market, consumer / client and competition.
We are facing a mature market, saturated, absolutely heterogeneous, although perceptually highly valued, both in the internal and external markets. With low barriers to entry, constantly moving and changes in habits and trends.
Such a market causes competition to be tough and aggressive. Innovation is sought, constant improvement, with indexes of quality with an upward trend and more and more value is generated to the product. New business groups, chains of restaurants, national and foreign franchises.
The client in our case and in this microenvironment is the most favored. We are facing a very demanding client: constantly dissatisfied (that is, with ever lower satisfaction rates), more and better informed, with low levels of loyalty and with less sophistication. And although it seems contradictory it is an absolutely inelastic demand for the price.
In this situation we do not have many options, we have to constantly adapt and improve; change, innovate and above all apply new management strategies such as CRM, or in other words the management of the relationship with customers.
Let us now see other reasons, also of weight, that make this strategy absolutely necessary:
Although the indices of satisfaction they go down, it is not motivated because the quality indices go down: on the contrary they are getting higher, and they are motivated by the high levels of demand. But although we have satisfied clients, that is to say that we fulfill their expectations, it is not the only or necessary condition to generate loyalty; We will only generate this with very satisfied customers.
- As we have pointed out above the intensity indices competitive They are very high, so the differentiation variables are increasingly complex. All innovate in similar variables: decoration, new dishes, menus, staff, etc. So adding added value to our product is practically impossible.
- Attracting new clients is becoming increasingly complex: conventional media are highly fragmented, lose credibility day by day, are ineffective and very expensive.
- Currently, in this andOur main communication weapon is viral marketing or buzz marketing, more popularly known as “word of mouth”. The recommendation has come to the fore for the consumer, you just have to observe the new generation of 2.0 webs on the Internet and especially the spectacular growth of "Ratings & reviews": portals that are generated based on consumer opinion. The most popular R&R are from restaurants (http://www.yelp.com/, http://www.barceloca.com/...).
It is clear that at this point answer the question: What generates more cost for the company to capture new customers or keep current ones? It is a no-brainer.
The company, organization or business must have a medium and long-term vision, to the extent that we generate high satisfaction rates for our clients. What has a double utility: on the one hand they will generate repeat purchases and on the other they will generate positive noise: prescription and recommendation of our business to potential customers.
Let me have another thought out loud: When we have a work commitment, a family meal or a special dinner, and we want to convey a good impression in each case, where will we go? To them restaurants that we have been going lately, that although the food was quite correct, the treatment was neither good nor bad, and it generated a neutral experience, or we will choose that restaurant that we pointed out at the beginning of the article, which always generates a positive experience and great satisfaction.
We are in the era of experiences, in general consumers no longer have needs, we have desires; in which we generate higher and higher expectations and for which we want to have positive experiences, moments to remember. This factor has a multiplicative effect if our business is in the leisure industry.
So far we have seen why, but What is CRM or relationship marketing?
Is it about stimulating sales through intelligent use of the database?
Send emails or Christmas greeting cards?
Do any special promotion?
These are or may be some of the actions within a global CRM strategy, but of course it is not enough.
To define this type of strategy we must focus on one word: "relationship". This word is the objective of this strategy itself. It is about establishing a lasting, long-term relationship of mutual collaboration between company and client. We have to think that until now many things have been done for the client, but without the client. This strategy radically changes these rules, phrases such as: "the client does not know what he wants" cease to have any validity, if they ever did.
Let's not get confused, this does not mean knowing our client profile or our segment, but rather our client, individually, each and every one of our clients: their personal data, tastes and preferences, habits and customs, frequency of purchase, quantity of products purchased and their complaints and dissatisfactions; in this way we can identify and individualize them.
Based on this knowledge, we will be able to differentiate our clients and recognize them and start what we call a “dialogue” (two-way communication), that is, a constant exchange of information with the client, in this way we can:
- Adapt the offer in an almost personalized way.
- Increase the perceived value of the customer.
- Make the individual feel different and special.
In summary, with adequate knowledge and constant generation of value to the client, we will unequivocally achieve very satisfied clients, which, as I have commented, is an absolutely necessary condition for generating loyal clients, that is, clients with a high cost of change , thanks to that link generated.
In a second part of this article we will explain how and in what way we will apply a CRM strategy, what conditions are necessary, what changes are involved, the investment, and what are the usual causes for the failure of a CRM strategy.
Author Carles Fiestas