OBJECTIVE OF THIS ARTICLE
In this chapter, we are going to look at Customer-Centric Strategy (CCS). We will also be looking at what an organisation needs to do in order to evolve into a Customer-Centric Enterprise. We will be looking at this under two main headings.
· acquiring new customers
· Retaining customers.
We will also talk about what you need to know about your profitable customers.
When we talk about CCS, we are talking about ways by which an organization tries to do business from customers’ perspective. Whatever form an organization adopts in order to be customer-centric, it is always aimed at acquiring new customers, customer retention and increasing customer profitability.
Acquiring New Customers
If an entrepreneur wants to start a new business, he first has to think up the right idea. You have to make sure that you are producing what is needed by prospects rd customers in your vicinity. One thing you should know is that a portion of your resources should be committed to acquiring new customers for your products and services.
In a customer-centric enterprise, acquiring new customers is one of their top priorities. You sho2d understand that organizations operate a competitive environment where they have to compete for existing prospects and customers the market square. They always achieve this through superior customer in service and increase in customer experience. They take even’ opportunity to delight their customers.
In acquiring new customers, communication is very important. You must be able to get the right information to the right target in the right manner. The organization must be able to project the right image of the organization. They would achieve this by projecting the profiles of the companies’ best customers.
Once an organization acquires a new customer, they have a more serious task at hand, which has to do with retaining the customer and preventing loss of customers to competitors. In retaining your customers, you have to understand the relationship between the company the brand, the channel of distribution and the customer Competitors always try to draw away customers through innovation and incentives which are meant to draw customers from another life cycle.
In a survey conducted by Deloitte and Thuch6, it was discovered that it cost five times as much to acquire a new customer as it does to keep an existing one. Another research conducted by Fredrick Reicheld reported that five percent retention in customers over their lifetime results in an 85 to 125 percent increase in company margin over that same time period.
In retaining customers, the organization must be able to communicate information about new products and innovations to the customers in real time. They must do this throughout the entire tenure of the customer with the organization. This must also be passed through the appropriate channels that the customer prefers.
The firm in retaining with their customers must be able to know their customers very well. They have to study customer interaction and use the knowledge to their own advantage. They must be able to know when their customer is changing and utilize the knowledge in formulating a better CRIVI for them. they must set up an appropriate messaging process aimed at getting a repeated purchase from their customers.
A customer-centric enterprise must keep track of the satisfaction level of their customers through appropriate feedback mechanism aimed at knowing the response of their customers to their products and services. They should be able to suggest to customers more ways of deriving more benefits from the product. When an organization can increase the utilitarian benefits of their product, it will make customers come for more of such product/services.
In order to retain customers, organizations must come up with loyalty programs aimed at increasing the frequency and involvement level of the customer One of the ways of measuring this involvement is Life Time Value (LTV) which aims at assessing the profitability of customer over his lifetime with the organization.
Lifetime value is measured in terms of historical and projected lifetime value. It allows the organization to begin to allocate marketing resources by the segmented group and individual levels.
In CRM, with the aid of technology, you can calculate what you can invest in a particular segment over a particular period of time. For example, Etisalat Nigeria can decide to invest more money in the youth segment than in the working class or elite segment.
Note: Reactivation or retention is critical to the success of customer-centric enterprises.
If a customer is perceived to be profitable, the enterprise will require five kinds of information to be gathered. These include:
· Customers’ want and needs
· Customer purchase cycle
· Customer interaction opportunities
· Customer profile
· Customer life cycle
A. Customer Purchase Cycle: This is the period between the customer’s first purchase and the next purchase. The organization must also take note of the likelihood of additional purchase and the nature of purchases made by the customer
B. Customer Interaction Opportunities: Tm water to enhance customer loyalty, the customer-centric organisation must maximize interaction with the customer organisation. This is where touch points became necessary.
C. Customer Profile: Any organizations that wish to relate and retain its customers must have a robust customer support services in order to have a formidable customer service. The organization must have enough information about their customers. It is might include it relationship they have, the size.
D. Customer Life Cycle: The customer lifecycle of an organisation traces the lifetime of the customer as it relates to his product use. It starts with the use of the product to the time that the customer disengages or die as the case may be. The organisation must be able to predict the behaviour of its customers and predict his next move in order to prolong his stay in the organization’s Lifecycle.
The purpose of evolving into a customer-centric is not for profit motive but it can help in saving costs through the increased efficiency of the organisations’ internal processes. If the internal process is well developed, it will increase the return on investment in a CRM initiative.
In this chapter, we have looked at the customer-centric strategy. We focused our attention on how to gain new customers and how to retain your customers. We also said that it is better to focus on how the organisation will not lose customers to competitors because it will cost more to acquire new customers than to retain them.
We talked about what you need to know about your profitable customers. These include:
v Customers needs and want
v Customers purchase cycle
v Customers interaction opportunities
v Customers profile
v Customers Life Cycle
1. Discuss the relationship between the Internet and CRM.
2. Discuss CRM and Globalization
3. Do you think CRM can work without technology or software?