The Role of CRM in Building Customer Loyalty
- Posted December 21st, 2011
- Filed under: Customer Relationships
Just the other day I posted about creating a customer loyalty plan. Today, I stumbled across a thoughtful blog post by Maz Iqbal on the Business 2 Community blog about this same topic. The post, somewhat ominously, starts out with this take-a-way:
CRM has failed to deliver customer loyalty; is Social CRM headed the same way?
The article, titled Customer Loyalty: Disgust, Elevation and the Categorical Imperative, is worth a full read. The premise is that people are either disgusted by bad interactions with companies, or elevated by good interactions.
One of the premises of the post is that CRM has not done a good job helping businesses build customer loyalty. Instead, Iqbal argues, many organizations use CRM to extract as much value out of the customer as possible, but little is done to treat customers like real human beings.
Is Software the Answer?
I am not sure if software can fully answer the need for businesses to have human interactions with customers. Much of that lays in the culture of a company and in its approach the selling and giving customer support.
However, even if CRM can’t deliver the value, it does need to play a role. The argument here is that CRM software is often designed to do the opposite of creating customer loyalty. By putting customers into a “management” system, it is possible to run the risk of de-humanizing them and only valuing customers for what they can give you, ie. their money.
Is Getting Value from Customers Bad?
Before I go much farther, I would argue that it is okay for a company to find value in a customer relationship, as long as the customer finds value in it too. You should seek to maximize each of your customer relationships. But if that process only values the customer as far as they can help you, and then treats the customer poorly when he or she needs something in return, then the process is broken.
Caring for Customers
Iqbal provides a couple of examples of customer service in his article. In the first, a customer is disgusted at being treated as unimportant and not being told of better offers from a company. This experience leaves a bad taste in the customer because no one cared about him except as a means to make money.
In the second example, a customer has something go wrong with an order. The seller not only acknowledged the error, but went way out of the way to remedy the situation. This made the customer feel important and cared for.
Customer loyalty is built not with a perfect product, but rather when a real connection is felt by the customer. Showing customers that you value them as human beings goes a long way toward engendering long term loyalty.
Building Better Relationships
But what about the idea that CRMs aren’t pulling their weight in this department? A good CRM provides an easy way for businesses to manage and build customer relationships. There are improvements to be made, for sure, that would make it easier for businesses to focus in on a single customer and deliver value to them not as a number, but as a human. We here at Batchbook are excited at the possibilties of using our software to really connect better with customers, and we will have some new features in the updated version coming next year that will move that ball forward.
While there can be improvements in software, there are also improvements that businesses can make with the way they interact with customers.
Here are some ideas we here at Batchbook have in regards to building better customer relationships.
- Narrow your focus to engaged customers in your CRM, and focus on strengthening already existing relationships.
- Do customer service as good as or better than sales.
- Track your conversation history with customers so you don’t forget important details.
- Astound customers when there is a problem by going out of your way to fix it.
- Find or create content that will really interest or help your customers, and share it.
- Find and provide the greatest value for each customer, so you can spend more time with fewer customers.
These are just some thoughts on building better customer relationships and increasing loyality.
Batchbook can help you accomplish some of these goals, but it all starts with a fresh focus on the importance of the customer, and on the value you get when you give value.
What do you do that helps build relationships and loyalty with your customers?
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