Customer Relationship Management and Marketing Strategies
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is an approach to managing a company’s interaction with current and future customers. The CRM approach tries to analyze data about customers’ history with a company to improve business relationships with customers, specifically focusing on retaining customers to drive sales growth. CRM systems compile information from a range of different channels, including a company’s website, telephone, email, live chat, marketing materials, social media, and more, to learn more about their target audiences and how to best cater to their needs. However, this could lead to favoritism, producing dissatisfaction among other customers, which is against the means of CRM.
Types of CRM
- Operational: The primary goal is to integrate and automate sales, marketing, and customer support. It often includes a dashboard that provides information on each customer the company has.
- Analytical: The secondary goal is to analyze customer data collected through multiple sources and present it so that business managers can make more informed decisions.
- Collaborative: The third goal is to incorporate external stakeholders such as suppliers, vendors, and distributors and share customer information across organizations.
Relationship Management in Marketing
Corporate Social Responsibility (CSR)
CSR is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities, and the environment in all aspects of their operations. This obligation extends beyond the statutory obligations to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families, as well as for the local community and society at large.
Objectives of Relationship Management (RM)
Identify and establish, maintain, or terminate (if necessary) relationships with stakeholders at a profit so that the objectives of all parties involved are reached.
- Environmentalism: Concerns for environmental protection and improvement of the health of the environment, particularly as the measure for this health seeks to incorporate the concerns of non-human elements.
- Consumerism: An ideology that encourages the acquisition of goods and services in ever-increasing amounts.
The 4 C’s in Relationship Management
- Customer: Clearly identify your target customer and keep in mind that you may be targeting more than one group.
- Cost: Consider the consumer’s point of view (affordability, satisfaction, and value).
- Convenience: Consider customer purchasing barriers and online sales.
- Communication: Consider customer engagement, the “what is in it for me” factor, and social media.
Leaky Bucket Theory and Customer Loyalty Ladder are related concepts.
Marketing Strategies
Segmentation
Segmentation is the process of dividing a varied group of buyers into smaller groups, within which broadly similar patterns of buyers’ needs exist. We need to consider variables for segmenting the market, look at, and validate the profile of emerging segments.
Why Use Segmentation?
- Focus efforts on those segments where the greatest sales, profitability, or awareness can be generated.
- Adapt products to the customers in target segments through a greater understanding of needs.
- More satisfied customers through tailored communication and products.
Targeting
After segmenting the market based on the different groups and classes, you will need to choose your targets. No one strategy will suit all consumer groups, so being able to develop specific strategies for your target markets is very important.
Targeting Strategies
- Undifferentiated: Market as one group with no individual segments, therefore using a single marketing strategy. This strategy may be useful for a business or product with little competition where you may not need to tailor strategies for different preferences.
- Differentiated: Used if you need to focus on two or more well-defined market segments and want to develop different strategies for them. Multi-segment targeting offers many benefits but can be costly as it involves greater input from management, increased market research, and increased promotional strategies.
- Concentrated: Selecting a particular market niche on which marketing efforts are targeted. Your firm is focusing on a single segment, so you can concentrate on understanding the needs and wants of that particular market intimately. Small firms often benefit from this strategy, as focusing on one segment enables them to compete effectively against larger firms.
You need to decide which and how many segments should be targeted.
Positioning
Positioning is developing a product and brand image in the minds of consumers. It can also include improving a customer’s perception of the experience they will have if they choose to purchase your product or service. The business can positively influence the perceptions of its chosen customer base through strategic promotional activities and by carefully defining your business’s marketing mix. Effective positioning involves a good understanding of competing products and the benefits that are sought by your target market. It also requires you to identify a differential advantage with which it will deliver the required benefits to the market effectively against the competition. Businesses should aim to define themselves in the eyes of their customers in regards to their competition.
Requirements for Effective Positioning
- Clarity
- Credibility
- Consistency
- Competitiveness
Understand consumer perceptions vs. competitors, position products through communication, and design an appropriate marketing mix.