The Need for Customer Relationship Management in the Age of CX
As a business in today's age, do you know the most crucial factor that wins your customer loyalty?
According to 96 percent of customers themselves, it is customer service. Globally, 54 percent of the customers say they have higher customer service expectations from a brand than just a year ago.
Hence, as a business, you cannot expect to invest half-heartedly in customer service (also called customer relationships) and still be able to thrive. In the machine of your business, customers are the essential cog that keeps the flywheel moving.
What is Customer Relationship Management?
Customer Relationship Management is a tool, strategy, and process that companies use to manage communication and interactions with existing and potential customers.
As a tool, CRM refers to a software technology product that is used for sales management, contact management, analytics, and more.
As a strategy, CRM is a business's take on how interactions with customers should proceed and be managed.
As a process, CRM will be the entire system that a business incorporates to streamline customer interactions.
Customer Relationship Management: Once Upon a Time
From the barter system to the currency system and now digitally transferring money, businesses have grown and evolved over millennia. And technology has been the biggest determiner of the evolution of businesses.
The same can be said for the customer relationship departments. Technology has affected and shaped how businesses form relationships with customers.
And so, it makes sense that there was no sophisticated customer relationship management tool or strategies until the telephone was invented in 1876. Until then, people only had the option of going to the source -- the shopkeeper -- and getting their purchases fixed. This meant a lot of face-to-face interactions and a lot of delays.
Once telephones came into being, distant one-to-one interactions could be held. In the 1960s, large companies got the idea to set up call centers strictly devoted to managing and alleviating customer problems.
The late 1970s saw the emergence of complex phone trees. In 1986, however, the world's first contact management software was devised by ACT! It could efficiently store and organize customer contact information.
During the early '90s, early innovators like Brock Control Systems helped to automate the existing CMS. More information and more productivity were experienced. By 1995, the industry had a name, and the products that came out of it were collectively called the CRM. As more competitors emerged, existing CRM software continued to add new and broader functionalities.
Finally, in 1991, the world wide web emerged, and CRM was never the same. As customer experience evolved so did CRM. It morphed and broke down in the tool/ strategy/process that we see now. And the importance of customer experience has increased to the point where we now have SaaS and cloud-based CRM which have broken all ceilings to take customer interactions and customer relationships to a whole new level.
Customer Relationship Management: Now
The lack of communication channels before made customer relationship management almost non-existent.
Now, however, businesses have a global customer base on their fingertips, ready to be tapped into using one of the following mediums:
- Social Media
- Call Centers and Help Desks
- Messaging Apps (Ex: WhatsApp)
Each business has to stay on top of customer relationship management -- 89 percent of customers have switched to doing business with a competitor because their customer experience was not good.
What makes an excellent customer experience, which in turn denotes the success of your customer relationship management?
In addition to an amazing product that says what it does, customers also expect:
- Personalization: 33 percent of customers abandoned brands last year because of lack of personalization.
- Efficiency: 72 percent of customers feel that having to explain their problems, again and again, is a big negative. This point also includes a robust internal customer service team that is active on social media and other channels as well.
- Rewards: 48 percent of customers expect some form of special treatment because they've been good customers.
- Knowledgeable and friendly customer service representatives: 68 percent of customers believe that they are the key to excellent customer service.
Apart from rising digitalization, changes in CRM can also be attributed to the growing millennial base, which constitutes the biggest generation right now.
Millennials, who grew up along with rising digitalization, are well aware of the privileges and rights they have as customers on the internet. 63 percent of them begin interactions with a brand online, and 21 percent of them are willing to pay more to companies who excel at customer service. As a result, expectations of about 66 percent of millennials have risen in the last year when it comes to customer service.
The following diagram captures the difference between traditional marketing practices and present-day customer experience very well:
It is clear that customer interactions have become more than transactional. They are relationships in the actual sense of the word with a focus on satisfaction, loyalty, and value.
The Number One Customer Relationship Improvement Technique
There is a regurgitated advice of having more people to manage your social media and emails to have more engagement online and to run campaigns, giveaways, etc. These techniques are a hit and miss, and they might/might not be what your customers want. There is one single technique, though, using which you can not only cast yourself favorably in the eyes of your customer in the present but also ensure future growth.
77 percent of customers perceive a brand as favorable if they take the first step in inviting and taking customer feedback.
Thus, taking the initiative to understand what customers think could be one way that puts a business ten leagues ahead of their competitors.
How to get useful feedback? One of the most effective techniques is to make use of survey maker which second as NPS software or Net Promoter Score software.
For those who don’t know, NPS measures customer experience and indicates business growth. Today, it is a core part of customer experience and customer relationship management systems around the world.
Simply ask the question:
“How likely are you to recommend the brand to a friend or colleague?”
Those who give you a nine or ten are loyal enthusiasts who keep buying from you and promote your brand in the future as well.
Those who give seven or eight are satisfied customers. They aren’t as enthusiastic as the 9s or 10s and might be pulled in by competitors.
Those giving a score of zero-six are unhappy customers who can damage your brand through negative word-of-mouth.
If you’ve never used an NPS, here are some sample questions that you can use in an NPS survey going forward:
- How likely are you to recommend [the brand] to a friend or colleague?
This the basic NPS question.
- Based on your experience thus far, how likely are you to recommend [the brand] to a friend or colleague?
This allows you to ask the question early on in the customer journey. Once the journey proceeds, you can keep raising it at different points to see how the customer response is changing.
- Now that the order is complete/the service has been rendered, how likely are you to recommend [the brand] to a friend or colleague?
This specific question after the completion of the transaction can provide valuable insights. Both the business and customers have completed their required roles. Where does the relationship stand now?
- How likely are you to recommend the [the brand] to someone like you?
Some products are for a niche market. So if a person does buy them, it is not likely that their friends, colleagues, the family will be interested in them too. Adding ‘Someone Like You’ helps the brand ask the question more clearly to someone who, in turn, can provide a clear answer due to the phrasing.
Here are other survey questions examples that are a part of the NPS Survey Template:
- What did we do well?
- What did we not do well?
- What can we improve?
- Product creation
- Product shipment
- Social media engagement
- Email engagement
- Live chat engagement
- Telephonic engagement
- Why would you NOT recommend us?
- What can we do to absolutely delight you?
You can ask these questions either through:
Segment your audience for this.
At the end of an article, on a landing page, or as part of the deal when giving away a free piece of content.
- After the order has been received/service rendered
- After a certain amount of time post joining the mailing list
Ultimately, customer relationship management goes beyond a tool or software. It is a methodology, a set of values that aim at truly serving customers. And once you make it a part of your modus operandi, you’ll see it isn’t that difficult at all.
All statistics from: Customer Service Statistics & Facts of 2019