What does Customer relationship management mean in marketing terminology?

Customer relationship management

Customer relationship management (CRM) can be described as a strategy designed to optimise customer relations. In essence, it's about communication and the customer experience, with businesses setting out to build mutually-beneficial, long-term relationships with clients. By doing so, businesses are more likely to retain customers, boost customer value, effectively allocate resources, and build loyalty.

The first step in customer relationship management is to ensure that the customer's initial interaction with the company is as seamless and user friendly as possible. This can be achieved through various channels such as web forms, chat facilities and telephone contact. If the customer's first experience is positive, the customer is then more likely to return.

Once contact has been established, customer relationship management strategies help businesses to improve customer relationships and nurture customer loyalty. They can do this in several ways. For example, store loyalty schemes are a popular way for customers to buy products in exchange for points which can be stored and used for future purchases. Technology such as data analytics helps to quickly and accurately identify customer needs and preferences so that the company can tailor and personalise services or products that best meet customer needs.

Communication is key in customer relationship management, with companies encouraging customers to interact with them. Email newsletters are a popular way to keep customers up to date with the latest news and promotions, and new technologies such as social media and SMS marketing allow businesses to engage with customers in real-time. This can allow customers to ask questions and get an immediate response and helps to build trust and loyalty.

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Customer satisfaction is another important aspect of customer relationship management, as a company should aim to not just meet customer expectations, but exceed them. Encouraging customers to submit feedback and reviews can be a great way of gleaning insights into customer satisfaction, whilst using customer surveys, focus groups and one-to-one interviews can be another way of getting a better idea of customer experience.

Lastly, customer relationship management strategies should attempt to retain customers for as long as possible. This can be done through offering discounts and exclusive offers to loyal customers, providing special VIP customer experiences, and providing rewards so that customers return with each purchase.

Customer relationship management can seem like a daunting task, but taking the time to focus on developing relationships with customers to enhance customer experience and retention can reap huge rewards for businesses. Practices such as customer segmentation, personalisation, communication, customer satisfaction surveys, rewards and loyalty programmes, and data analytics result in happier customers who are more likely to remain loyal to the company.