Building Customer Relationship Management

Customer Relationship Management

Customer relationship management is perhaps the most important concept of modern marketing. Some marketers define it narrowly as a customer data management activity (a practice called CRM). By this definition, involves managing detailed information about individual customers and carefully managing customer touchpoints to maximize customer loyalty. We will discuss this narrower CRM activity in chapter 4 when dealing with marketing information.

Most marketers, however, give the concept of customer relationship management is the overall meaning. In this broader sense, customer relationship management is the overall process of building and maintain profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers.

Relationship Building Blocks

 

Customer Value and Satisfaction

The key to building lasting customer relationship management is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and give the company a larger share of their business.

 

Customer Value

Attracting and retaining customers can be a difficult task. Customers often face a bewildering array of products and services from which to choose. A customer buys from the firm that offers the highest customer-percieved value – the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. Importantly, customers often do not judge values and costs “accurately” or “objectively.” They act on perceived value.

To some consumers, the value might mean sensible products at affordable prices. To other consumers, however, the value might mean paying more to get more. For example, a top-of-the-line Weber Summit E-670 barbecue grill carries a suggested retail price of $2,600, more than five times the price of competitor Char-Broil’s best grill. According to Weber, the stainless steel Summit grill “embraces true grilling luxury with the highest quality materials, exclusive features, and stunning looks.” However, Weber’s marketing also suggests the grill is a real value, even at the premium price.

 

Customer Satisfaction

Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectations. If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted.

Outstanding marketing companies go out their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Smart companies aim to delight customers by promising only what they can deliver and then delivering more than they promise. Delighted customers not only make repeat purchases but also become willing marketing partners and “customer evangelists” who spread the word about their good experiences to others.

For example, companies which interested in fascinating customers, outstanding value, and service become part of the overall company culture. For Instance, after one year, JetBlue ranks at or near the top of the airline industry in terms of customer satisfaction. The company’s proverb JetBlue: “you above all” tells customers that they are at the heart of the company’s strategy and culture.

JetBlue has an evangelistic zeal for creating first-rate, customer-satisfying experiences. At JetBlue, customer care starts with basic amenities that exceed customer expectations, especially for a low-cost carrier – leather coach seats with extra legroom, free satellite TV, free premium snacks. But it’s the individual touch that really makes JetBlue special.

Those heart-felt values result in outstanding customer experiences, making JetBlue customers the most satisfied and enthusiastic of any in the airline industry.

Other companies that have become legendary for their service heroics include Zappos, Ritz-Carlton Hotel service, Amazon. Com etc.

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Customer Relationship Management Levels and Tools

Companies can build customer relationships at many levels, depending on the nature of the target market. At one extreme, a company with many low-margin customers may seek to develop basic relationships with them. For example, Nike does not phone or call on all of its consumers t get to know them personally. Instead, Nike creates relationships through brand-building advertising, public relations, and its numerous Web sites and apps. At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships with key customers. For example, Nike sales representatives work closely with the Sports Authority, Dick’s Sporting Goods, Foot Locker, and other large retailers. In between these two extremes, other levels of the customer relationship are appropriate.

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1 Response

  1. November 22, 2021

    […] You May also Read: Building Customer Relationship Management […]

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