Three Steps Of Customer Management

In the era of industrialization, the close relationship between enterprises and individual customers needs to pay high cost. This kind of cost barrier hinders the establishment of relationship between enterprises and customers and provides personalized services.

Today, enterprises can establish and maintain personalized customer relationships at very low cost.

The US customer relationship management expert Arthur Hughes (Arthur M Hughes) has put forward the following five indexes for successful customer relationship management: the marketing process of the company is perfect, it is easy to grasp the customer's name, address and purchase behavior. The company can grasp the repeated purchase data of the customer at the place of sale.

This index system has been widely praised by enterprises including the world's top 500 companies, and some Chinese enterprises are also actively approaching this index system.

In practice, the implementation of the "customer relationship management plan" usually involves three stages.

It includes two aspects: "defining target market" and "striving for target customers".

1. Target market.

All marketing activities (killer Customer Relationship Management) are derived from the definition of the target market.

With the increasing competition, the market has been divided more and more meticulously.

Fortunately, the digital economy with the Internet as its main feature helps enterprises to further segment their customers into various "micro market segments" (Microsegment). DELL computers and sports books are the two typical cases of creating "micro market segments".

DELL computer is to further subdivide the customer base by setting up different portals in different countries.

Not only that, it also custom-made "shops" for all kinds of customers' daydreams: family users, small businesses, general enterprises, medical industry, higher education institutions, K12 educational institutions (educational system in the United States, generally refers to courses from grades 1 to 12 in primary schools) and federal, state and local governments.

DELL computer can record and track customers through products purchased by customers (notebook, desktop computers, servers and storage devices, workstations, software and related equipment).

In addition, DELL computer has created more "micro market segments" through auction sites DELL Dell Factory Ortlet.

For those member customers, DELL computers provide tailored interface and additional services to them.

American sports book magazine divides readers into four readership: readers who want to pass the time; they want to know about sports readers; those who like to mourn all kinds of collectibles; readers who need sports guides.

After that, sports books and periodicals will further subdivide each of these groups of readers with professional books, videos, CDs, children's magazines and tourism.

Enterprises must find suitable target customers in various target markets.

Marketers must regularly reflect on a problem. Who are my customers? Many businesses often get lost on this issue.

For example, Kodak has sold X optical negatives to hospital laboratory technicians for many years, but it is very late to note that purchase decisions have gradually shifted to the hands of professional executives.

After finding the target market, enterprises must answer two questions: do the target customers maintain close relationship with all customers? Do they need to maintain close relationship with all customers? This requires an analysis of the profitability of customers.

Marketers must score customers on the basis of profitability and pay more attention to more valuable customers.

The following are two ways to analyze the profitability of customers: one is based on the present and the other is for the future.

B, future situation

There are many other ways to measure the profitability of customers. One of them is that enterprises classify customers into 4 categories according to the value of their customers and customers (this is a classification method based on the standard of sales revenue): Platinum customers (top customers), namely, the top 1% customers who have business dealings with the enterprises (the "golden customers"), that is, the following 4% customers who have business contacts with the enterprises; the iron customers ("moderate" customers), that is, the next 15% customers who have business dealings with the enterprises; the lead customers ("small" customers), that is, the remaining 80% customers.

Marketers should spend more time and energy in reaching out to those highly valued potential customers.

For example, an enterprise decides to spend $3 on each potential customer with higher value (if the total number of potential customers is 20, then spend 1 dollars on the potential customers they spend (if the total number of customers is 500, then the total cost of spending on these customers is $500), this targeted way will be better for all potential customers than the same expense.

The following are some interesting findings of Jay and Adam Curry, which are obtained through research and analysis: Jay Chris,

The top 20% customers bring 80% of the profits, but the profits may exceed one hundred percent.

The current customers bring up to 90% of the profits.

A large proportion of the marketing budget is spent on those other than the existing customers.

Of all customers, 5% to 30% of customers have the potential to upgrade to customers in Pyramid.

Customer satisfaction index is very important to enable customers to develop in Pyramid.

A 2 percentage point increase in customers' Pyramid may mean an increase of more than 10% in profits and a 50% increase in profits.

Finally, the value of the customer is not only judged by a single purchase, but also needs to predict the total sum of customers' potential purchase.

"Customer lifetime value" describes the total profit that an enterprise expects to bring to the enterprise in its lifetime buying behavior. The enterprise must calculate the cost of attracting, selling and serving the customer during the forecast period.

Different products and services have different "customer lifetime value" estimates. In the book Customers for Life, Carla Stevie estimates that the potential lifetime value of a car dealer may exceed $300 thousand; if the customer is satisfied and buys 1 cars from the car dealer, the number will double; if the customer introduces other people to buy, the customer's lifetime value will be even higher.

Two, meet the needs of target customers.

After finding the target customers, the next task of the enterprise is to satisfy the needs of the target customers.

Meeting customer needs includes two aspects:

1, pforming customer value into customer interests that can be put into action.

Today, businesses are beginning to focus on customer expectations, and marketers must pform customer expectations into the interests of customers that can be put into action.

From the customer's perspective, the benefits derived from the purchase behavior can be expressed as follows:

Customer interest = (efficiency of product services in the market) + B (brand value) + R (relational value C (cost of product service) t (time cost)

U, B, R, C and T in the above formulas can be assigned different weights in different market segments.

In the "business to business" mode, the highest weights may be placed on top of u, C and T; low income customers may put a higher weight on C, while putting lower weights on u and T; different buyers will have different opinions on R's weight.

Therefore, marketers can locate certain target markets based on the estimated coefficient of target customers (these markets are composed of similar weights), so as to design appropriate product services.

1. Launch products or services that are compatible with the choice of situations.

When positioning products or services, enterprises must consider the choice of customers.

For example, buyers of laptop computers may also be interested in related products or services, such as extended warranty period.

The opportunity of cross selling (Cross -selling) is determined by customer groups, usage patterns and user experience.

Usually, an enterprise can distinguish three different forms of products or services:

A product or service that does not exist in a competitor provides positive net present value and relationship value.

Although some products and services are of no benefit to net present value, they help to develop and strengthen some relationships that contribute to value. These products and services play the role of "sacrificing themselves to illuminate others".

Basically, it represents only a one-time paction of products or services, and can not create relationship value.

For example, expensive durable goods, real estate intermediaries, corporate finance pactions and bulk commodities trading.

The roles of these different products or services may change over time.

Today, marketers can focus on product lifecycle rather than focus on the life cycle of target customers.

Different stages of the customer life cycle involve different situational experiences, so manufacturers need to launch different products or services in the market.

Three. Form a link with target customers.

The last task is to create a more satisfying and lasting relationship with important customers in order to match products or services with customers' choice situations.

In order to achieve this goal, manufacturers need to invest in order to improve the market intelligence function of enterprises, 1, the design of market intelligence.

The customer relationship management can not play a role without the market intelligence system, which mastered the form of customer purchase, demographic variables, psychological statistics, and business contacts.

Knowledge is a kind of information that has been edited, verified and analyzed scientifically. Successful enterprises can often create cooperative networks to acquire and disseminate knowledge.

General Motors integrates customer databases from different departments into a single database, and uses this information to create new models that cover different target markets. The integration of such databases helps GM to provide trustworthy centralized customer services.

Marketers should minimize the time from getting information to pforming information into products or services.

For example, many ATM will mark some information, such as "call our free phone" if you want to know some information, but when the customer really calls the number, the service person who answers the phone usually does not know nothing about the customer's past purchase records, but only one.