Tuesday, July 13, 2010

Customer Management System - Developing a Long-term Profitable Customer Relationship

Developing a Long-term Profitable Customer Relationship

Apr 20, 2010 Richmond Anyidoho

A company’s success in establishing long-term customer relationships typically requires close working relationships with many different companies. The act of developing long-term profitable customer relationship will not only create wealth for the company but is also another good way of ensuring the retention of customers and thereby the survival and profitability of the company.

Michael Dell founded Dell Computer Corporation with $1000 when he was a college student at the University of Texas at Austin in 1984. Today, Dell is the worlds leading direct Computer Systems Company with annual revenues in excess of $31 billion and over 34,000 employees. The major reason is that Michael Dell revolutionized the computer industry by introducing the direct model.

The basic direct model aims to deliver a superior customer experience through direct, comprehensive customer relationships, cooperative research and development with technology partners, computer systems custom-built to customer specifications, and service and support programs tailored to customer needs.

Marketing has traditionally been viewed as the sales generating business function. This sales orientation sometimes leads firms to focus too much on generating sales in the short run, with little consideration for customer retention or profitability over the long term. Luckily, the short-term sales orientation is being replaced by more of an emphasis on developing, maintaining, and expanding long term, profitable relationships with targeted customers.

A relationship perspective consists of building partnerships with organisations outside the company and encouraging teamwork among different functions within the firm to develop long-term customer relationships. The days when marketers operated in isolation from other business functions are over. Success in the contemporary business environment requires that all company members work as a team toward achieving common goals.

Customer relationship is the establishment, development, maintenance, and optimization of long-term mutually valuable relationship between consumers and organisations. The relationship delivers values to customers, and profits to companies. A successful relationship between buyer and seller requires a firm commitment from both parties.

Buyers do not like being pressured into making decisions they feel are premature, and salespeople must realize that decisions made under pressure are likely to create post purchase doubts. This can jeopardize the relationship and even lead to its termination. The quest for enhancing customer relationship comes to play. This is to ensure that customer expectations are met or exceeded, so that an ongoing, mutually satisfying relationship between the buyer and seller may continue.

It is not unusual for salespeople to become confidants of customers, offering opinions when asked on a wide range of topics, some of which are unrelated to the sales offering. Salespeople can enhance the relationship by continuing to provide timely information, alerting the customer to forthcoming product improvements, monitoring customer satisfaction and making improvements as necessary, showing the customer additional ways to use the product, and acting as a consultant to the prospect business.

The added value to customers can be reinforced through periodic business reviews, where salespeople and perhaps their management meet with customers to analyze sales and profit performance and identify areas for future emphasis. Sales managers must establish standards by which performance and effectiveness are measured, evaluate performance and effectiveness against these standards, and then take appropriate follow-up action.

Finally, to make a successful sales presentation in developing a long-term customer relationship, salespersons must achieve source credibility – that is, the customer must perceive its needs being satisfied by the combination of salesperson, the product or service, and the salespersons company. The salespersons personal characteristics such as dress, appearance, and manner may be important in achieving source credibility.

Customer Management System - Customer Relationship Management of Web 2.0

Customer Relationship Management of Web 2.0

CRM Application for Popular Websites with Participating Users

Apr 21, 2009 Ali Eftekhari

Customer relationship management is very popular in the current competitive market, as companies need to keep constant customers rather than simply selling their products. The first connection of web 2.0 to customer relationship management is the great opportunity for serving the customers by online support, and so forth.

For this purpose, customer relationship management software was designed to server the customers in a solid system. In general, companies utilize web 2.0 to service their customers. Thus, web-based companies, which are essentially based on web 2.0 has more chance (and also need) to use customer relationship management. The essence of web 2.0 is to provide a service rather than a product.

Although almost all websites are 'for profit', websites can be divided to two groups of commercial and non-commercial. The former one refers to the websites with paid membership or selling products, and the latter one is related to the free services on the internet (though the website has revenue from online advertisements, and they are indeed non-commercial just for their customers).

In fact, people commonly believe that customer relationship management is only for commercial services, as a company is responsible in respect with the customer who has paid. However, the existence of non-commercial websites (making revenue from Ads) depends on the visitors, and they are considered as customers.

Free Service to the Users, Revenue for the Owner

People also commonly believe that CRM is not applicable to free services on the internet. The argument is that since a website is kindly offering some free services, the visitors should be thankful without any expectation of support.

Surprisingly, however, the revenue of the so-called non-commercial websites can be as much as the commercial websites, where their revenue comes from inline advertising.

Roughly, a common range of online advertising revenue is CPM = $1-10, which means $1-10 net revenue from every 1000 page impressions. This is the value for one single ad, and there are few ads around the page. This is a significant value, comparable with commercial websites.

Necessity of CRM for Non-Commercial Websites

As quoted above, companies wish to keep a customer via CRM systems, because upon a good service, the customer will be a potential buyer again; and it is easier than convincing a new buyer. In other words, all expenses of CRM are just to reserve a future buyer for a later purchase; whereas, for a so-called non-commercial website, keeping a member means earning revenue from every single visit.

It is evident that CRM is more important for websites offering free services. Due to the rapidly growing demand of CRM and its vast range of applications, the efficient techniques of CRM are now well developed. In general, CRM solutions are widely available to the web-based business owners.

CRM is a Shortcut to Success

The sentences like “it is not a kind of service we support” and similar ones have been widely heard from the support teams of websites offering free services (e.g. free softwares, scripts, etc). Such experts need to spend a little more time (as they are completely familiar with the subject) to satisfy their customers, and surely the satisfied customers are highly profitable in comparison with the time they spend.

A successful story can be found in numerous technical forums. Most of them have been formed by a patient owner who has valued the members by trying to answer their questions and to resolve their problems.

As a result, the members remain on such a useful forum, and then contribute to the community. On the other hand, people find useful discussions (and resolved problems) via search engines, and join the community. Little by little, the forum grows and more experts come and enjoy serving others. This is the real story of most of leading forums.

CRM vs. SEO

People usually do not use CRM and are not successful in the competitive environment of the internet, because, they prefer to find tricks and easiest ways. In the latter example, the forum owners are not actually ‘patient’, and just wish to have a crowded forum, as people talk and the owner makes money.

Instead of focusing on the content and service, people seek for SEO tricks to promote their websites. This does not mean that SEO is not important, but one needs to have something interesting, then promoting to the public.

Customer Management System - Types of Complaining Customers

Types of Complaining Customers

Improve Customer Relations by Knowing Complainer Types

Oct 8, 2009 Thomas Alan Gray

Customer complaints are a fact of life in business, and dealing with them is an important part of maintaining customer satisfaction and corporate reputation.

In a paper published by the University of Florida, researchers Allen F. Wysocki, Karl W. Kepner, and Michelle W. Glasser identified five types of complaining customers and outlined what they consider the most effective ways of dealing with each. This article presents their typology and expands it based on the experience of various customer service representatives.

While some consumers may have concerns about customers being typified in this way, such classifications may aid in training service reps and help to improve customer relations in that way.

The Meek Customer

This type of customer prefers to avoid confrontation and may not complain directly. However, they will tell friends and relatives, may comment on a blog or web forum or may post the complaint on Facebook or other social networking site.

To deal with these quiet customers, a company must be proactive and positive. An internet presence may be required to catch these complaints; follow up must be delicate ("We noted your concern about our product on your blog. Is there any way we can help with this?").

The Aggressive Customer

"Opposite of the Meek Customer. Readily complains, often loudly and at length." These folks enjoy confrontation, and will often seek a large audience as a manipulative behavior. Many aggressive customers also engage in a sort of business blackmail (see The Rip-Off Customer, below)

The best response, suggests Wysocki et al., is to:

Listen completely
Repeatedly ask: "what else?"
Agree that a problem exists (no excuses)
Indicate what will be done to resolve the issue and when.

Avoid being aggressive in return. In other words, be calm, practical, and professional.

The High-Roller Customer

This customer "Expects the absolute best and is willing to pay for it." Complaints are likely to be offered in a reasonable,even logical manner.

The High Roller is not interested in excuses but only "in results and what you are going to do to recover from the customer service breakdown. Always listen respectfully and actively and question carefully to fully determine cause." Being given a run-around will upset any customer, but the High Roller especially.

The Rip-Off Customer

Some businesses call this type "The Extortionist." The goal of the Rip-Off, Wysocki points out, "is not to get the complaint satisfied but rather to win by getting something the customer is not entitled to receive." In other words, it's a form of blackmail or extortion. "A constant and repetitive "not good enough" response to efforts to satisfy this customer is a sure indicator of a rip-off artist." Many aggressive complainers are also accomplished at the rip-off.

Customer service reps often find aggressive and rip-off customers the most difficult to deal with (and those customers know that and use the fact). Wysocki, Kepner and Glasser advise CSRs to

Remain unfailingly objective.
Use accurate quantified data to backup your response.
Be sure the adjustment is in keeping with what the organization would normally do under the circumstances.
Consider asking "What can I do to make things right?" after the first "not good enough."

Documentation is important as the extortionist customer will often threaten legal action.

The Chronic Complainer Customer.

This type of customer "is never satisfied; there is always something wrong." No matter how often the service department fixes it, it's never done properly, or something else has gone wrong." This customer's mission is to whine. Yet, he is your customer, and as frustrating as this customer can be, he cannot be dismissed.

Dealing with a chronic complainer requires

A sympathetic ear
A sincere apology
An honest effort to correct the situation
Enormous patience is a big help.

"Most Chronic Complainer Customers will accept and appreciate your efforts to make things right. This customer wants an apology and appreciates it when you listen," because it is a way to get positive attention. "Tends to be a good customer (in spite of his constant complaining) and will tell others about your positive response to his complaints."

Obviously, there may be overlap between these classifications. Still the concepts may be useful in training customer service agents, where the various types can provide models for role-playing. The types can also serve as tests for a particular complaint-handling process ("How would it handle an Extortionist?").

Source: Wysocki, Allen F.; Karl W. Kepner, and Michelle W. Glasser, Customer Complaints and Types of Customers. EDIS document HR 005, a publication of the Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. May 2001

Handling Customer Complaints – A set of specific steps that is part of an effective customer complaint process.

What is a Warranty? – CSRs need to understand product warranties in order to respond appropriately to customer complaints. Customers need to understand them to get appropriate service.

Customer Management System - Improving Customer Loyalty: The Ultimate Customer Retention Plan

Improving Customer Loyalty: The Ultimate Customer Retention Plan

Jun 9, 2010 Ian Johnson

It can be argued that customer loyalty is the single most important aspect of business success. Every business knows the impacts of losing customers, and most agree that any added incentive that helps to improve their customer’s loyalty, is a huge plus. Well, there is one customer retention plan that not only keeps customers coming back for more, but actually encourages them to provide a company with real time, market and competitive information. So, what is this retention plan, and how does it work?

The Customer’s Rebate Plan

Like every business, customers just want to save money. While everyone wants the lowest possible price, most understand that there is a give and take. However, for those companies that simply offer the lowest price up front, without any incentives whatsoever, the end result will become a customer who is here today, and gone tomorrow. The question remains, how can a business offer just enough to satisfy customers and keep them coming back for more, but not so much up front that they take the first offer and run?

The back end rebate plan is the ultimate customer retention plan. Its basic premise is to incentivize the customer to continue to purchase by providing a discount each time they buy. However, the discount isn’t immediate, and is only paid out at the end of the plan. In this case, every time the customer purchases product, an amount goes into their plan. Once the plan is finished, the customer then receives a credit, or rebate, on their account for future orders. Here is a step by step summary of how the plan works.

Agree upon a total volume to be purchased for the duration of the plan.
Agree upon a per unit rebate amount every time the customer orders.
Agree upon a payout date when the plan finishes, and the customer is given the credit.

Assume that a customer wants to purchase 100 units, but only take 10 per order. If the company immediately gives this customer the 100 unit price, there is no guarantee the customer will return. However, if the rebate accrued by the customer on each order of 10 units, equals the price of 100 once the entire volume is taken, then the customer get their best price, and the company gets the volume.

This Customer Retention Plan Provides Essential Market Information

Once customers have accrued enough of a rebate in their plan, they are more likely to come back when faced with a competitive bid. Otherwise, they risk losing their rebate amount. Therefore, the customer will likely discuss the price of the competitive bid, and try to secure the same pricing. This plan incentivizes the customer to return, and provides the company with real time pricing information, directly from the market.

There are all kinds of studies that show the importance of customer retention. However, the best companies know how important their loyal customers are, and will do whatever it takes to keep them coming back. Consider this but another tool in a company’s arsenal.

Customer Management System - 3 Keys to Handling Customer Complaints

3 Keys to Handling Customer Complaints

How to Deal Effectively With Difficult Customers

Aug 18, 2009 Brian Tubbs

Handling customer complaints is one of the most important skills for customer service professionals. Providing top-notch customer service is, in fact, critical to a company's success. Effectively handling customer complaints requires patience, strong listening skills, the ability to identify valid complaints (as opposed to irrational grievances) and effectively deal with even the most difficult customers.

Executives, managers, and employees involved in customer service should handle customer complaints with the following keys in mind.

Value The Customer

This is foundational. Any enterprise engaged in commerce must provide excellent customer service, and this requires seeing customers as people- not simply as dollar signs. The customer should not be viewed as an interruption, nuisance, problem, or "necessary evil." The customer is the whole reason the business exists in the first place.

Practically, this means that companies should place a high value on their customers, and do all they can to convey a sense of importance and appreciation to each of them. This doesn't mean that the customer is always right, but it does mean that it's a "win-win" when the customer is satisfied, and a "lose-lose" when the customer is not.

Listen to The Customer

When a customer has a complaint, it's sometimes employee instinct to "tell the customer how it is." While it's understandable to be defend oneself and even company procedures, especially when the customer has been rude or aggressive, it's more important to listen to the customer.

As Stephen Covey, bestselling author of The Seven Habits of Highly Effective People, puts it: "Seek first to understand, then to be understood."

Even if it's not possible to adjust company policy or directly satisfy the customer's issue, actively, calmly, and sincerely listening to the customer's complaint conveys respect and concern. And it helps reduce tension.

Avoid Negative or Harsh Language

When it comes time to respond to the customer's complaint, customer service professionals should carefully choose their words.

"Language alters our perception of reality, because we see the world through words," writes Dr. David J. Lieberman. "Language is the basis of thought and thought is the extension of emotion." (Lieberman, David J. Get Anyone to Do Anything and Never Feel Powerless Again. New York: St. Martin's Press, 2000).

This point on language is both simple and subtle. The obvious application is that a person would wants to cool down an irate customer should use calming language. A more subtle point is that the very choice of words should be designed to elicit positive emotions in the hearer (i.e., refer to the customer's complaint as an "important and understandable concern"), and the language should be matched by soothing and open body language (i.e., no folded arms, no clenched fists, etc.).

Clearly, patience is a must-have virtue in employing the above keys. A patient professional is able to look at the situation and the customer objectively, and not allow his or her ego or feelings to cloud judgment and ratchet up tension unnecessarily.

Effectively handling customer complaints indeed requires patience, the ability to listen actively and emphatically, and to sort through the customer's grievance to identify the valid issues that need to be addressed. Such a person will be able then to effectively handle the most difficult customers and field even the most irate complaints. And a company with such professionals on board will provide the kind of top-notch customer service to help it thrive, even in a down economy.

Customer Management System - Measuring Customer Satisfaction in a Survey

Measuring Customer Satisfaction in a Survey

Best Practices in Client Feedback Questionnaire Design

The purpose of a customer feedback questionnaire is to measure the level of customer satisfaction with a product, service, or brand. Yet measuring how a company is failing to meet its clients' expectations and pinpointing areas for improvement is problematic if the client satisfaction survey design is flawed. A well-designed questionnaire can make all the difference. Falling back on customer feedback survey software or free questionnaire templates will only get a researcher partway there.

Customize the Client Feedback Template to the Company

A free template available online might be easy and convenient, but it may not yield the desired targeted, actionable data in its raw form. If starting with a pre-made customer feedback template, treat it as a sample of the general style to use, then go from there. Customize the form to match the company's goals in soliciting customer feedback.

General, non-targeted questions asking about customer satisfaction, such as those asked in survey templates, have limited use. The more specific and focused the questions, the greater the chance the questionnaire will result in getting complete and honest answers, and the more actionable the resultant data on customer satisfaction is likely to be.

Identify Goals to Determine the Best Survey Question Design

Figure out what the company wants to measure from the survey. Focus not only on the questions to be answered, but also on the general aim. For instance, is this to be a preliminary questionnaire, aimed more for discovery than action? Since the respondents' answers to questions will be used to launch more extensive, targeted research, then follow these best practices:

Limit leading questions. The goal is to tap customers' ideas, not bias them.
Include frequent write-in sections.
Offer plenty of opt-out responses (such as "other"), with open space to elaborate.
Use simple sentence structure so the question doesn't confuse the survey respondent.
Plan to give respondents a wide window of time to complete the survey.

Or, alternatively, is this survey aiming to be actionable, a basis for implementing change? The questionnaire should seek to extract specific, definitive answers and follow these general guidelines:

Limit write-in opportunities.
Use multiple choice questions.
Write tightly focused survey questions.
Design the survey to be balanced and comprehensive to assure its usefulness and accuracy.
Design survey questions relevant to the potential action.

Use Unbiased Language in the Customer Feedback Survey Questions

A common mistake in customer satisfaction surveys is to word questions with biased language. Use neutral terms in order not to slant the responses in one direction or another.

Use language that does not presuppose the survey taker is of a certain race, nationality, religion, creed, age, sexual preference, or gender. (Use "Does your spouse or partner use our product?" instead of "Does your husband use our product?")
Avoid asking leading questions. (Use "What do you like about our product?" rather than "Do you like our product?" )
Avoid complex sentence structure. Keep words and syntax simple so the survey questions don't confuse the respondent.
Use clear language that doesn't leave room for multiple interpretations.

Ask for Positive Feedback from Clients, Too

In measuring customer satisfaction with a product or service, survey designers can be so focused on figuring out the problems that they neglect to ask what's working, what customers like, and what the company is doing right. Identifying the positives can inform companies of what not to change, so they don't lose existing customers while acquiring new ones

Aim for Acceptable Survey Response Rates

Survey data is only as good as the sample size. Use incentives to encourage survey participation. Convey to respondents that participating in the survey means they're getting their voices heard--especially good advice when soliciting employee participation in a staff satisfaction survey.

Gain trust. It's part of best practices to disclose to the survey respondents that feedback answers might be used in testimonials. Assure the confidentiality of the respondents' identities and answers. Use media that's convenient, and give respondents a choice of how to respond, if possible- whether in an online survey, by telephone, or via email.

Follow FTC Guidelines

Federal Trade Commission guidelines for the use of testimonials and endorsements revised in 2009 may affect how a business uses the write-in and quantitative results of its client feedback survey in promotion efforts, such as with testimonials or claims of success. Become familiar with the guidelines designed to protect consumers from advertising fraud.

Evaluate the Customer Service Questionnaire on Several Fronts

Client feedback is very valuable. But bad questionnaire design means bad data and possibly big mistakes ahead. Measuring customer satisfaction accurately is a matter of articulating market research goals, using good survey design principles, choosing the language of the survey questions carefully, and assuring a large enough sample of data to work with. Do all this, and increase the chances of getting honest customer feedback that can help a brand, product or service succeed.

Customer Management System - How to Keep Your Customer Happy

How to Keep Your Customer Happy

By Gabriel Stiller

Article Word Count: 408 [View Summary] Comments (0)

Nowadays customers are far better informed than they were before and they therefore demand products and services of a high standard. They can no longer be lured to buy things through attractive deals and smooth marketing. After buying a product, a customer should feel that their needs are being met. Remember it is far easier to keep your existing customers happy rather than getting new customers. Here are a few ways in which you can keep your customers happy.

Begin by making your approach customer-focused. Your employees should be made aware that the customer always comes first. Even your training programs should stress on this customer centric attitude. You should make your customers feel special by remembering their birthdays, their preferences and encouraging interaction with them. You can actually set up automated processes for capturing customer information and then pulling it up as and when required.

To manage your customer relationships well you need to make sure that your customer data is up to date. Keep sending reminders to customers from time to time so that they can inform you of a change in their contact details or a change in their social conditions.

In order to be able to handle a large amount of customer data, it is a good idea to categorize it on the basis of specific requirements, needs etc. You may even need to develop a wider array of goods and services to be able to cater to the diverse needs of customers.

Customers appreciate attention to finer details. Whenever you come across an error, try to rectify it as soon as possible no matter how trivial it may appear. A discerning customer will be sure to notice the extra attention to detail and will want to be associated with you.

Your communication with your customers should not just be restricted to buying and selling of your products and services. Move beyond the commercial transaction and ask your customers for suggestions or feedback so that your customers feel you are listening to their advice. This will help you personalize your customer service. Use tools like newsletters or catalogs to communicate with your customers on a regular basis.

You need your customers to be happy in order to sustain your business and see it grow. This is why one of the goals of your business should be to strive for customer satisfaction. However, keep in mind that keeping your customers happy is a continuous activity.

Gabriel enjoys writing up on a variety of subjects. Other than the above topic, he also likes to set up sites on different topics. Do check out his new site which covers useful information on liposuction prices.

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Customer Management System - CRM Software Increases Performance And Profits

CRM Software Increases Performance And Profits

By Veronica A Davis

As a business owner it is vitally important to ensure that customers and potential customers are happy. You can do this in a number of ways, but one of the best ways to do so is through the use of a customer management software program. When you choose to utilize one of these programs, if properly done, you will see an increase in your profit margin. You can reduce your company's costs by increasing loyalty throughout your customer base.

Customer relationship management software will create a company wide strategy to completely understand the customer. It gathers, organizes, and provides details from all angles including sales and customer service, among others to create a clear layout of each customer. This is a crucial step in ensuring your company approaches, and interacts with the client or potential client in a manner that will be positive to them. There are several kinds of customer management software available today, and you should take the time to ensure that you choose the one that is right for your company. They are often referred to as simply CRM software.

The first thing you should realize is that you need to know exactly where your company plans on going in the future so you can make sure the CRM software will fit into your plans. Complete your business plan with goals and how you plan to reach them, and compare the software to see how they well they will fit at different stages down the road. You also need to identify exactly what you want or need from your software. Is your marketing strategy not working so well? Ensure that the CRM software you choose will have detailed assistance to help you market to potential clients more effectively.

You can discover many variations of customer relationship management software including those that are web based and those that are installed at your company. If you are going to purchase one that will be installed at your location then you should ensure that you have sufficient equipment or computers before hand.

These are only a few of the things you should carefully consider before purchasing your CRM software. There are varying sites on the internet that you can visit to help you compare different versions of the software, just be sure that you are reading credible information. It's very important to completely understand what you need, and what the software will do for you.

Once you have researched and settled on which CRM software you are going to use, you want to make the most of it. The only way you can be confident that you are using it to its fullest potential is to take the time to completely understand all of the features and how they work. Normally, a sales person will sit and go through everything with you. Most of them will have help or guided tour features that you can go through repeatedly to get a firm grasp of how to optimize results.

If you do your research, know the software inside and out, and help others in your company to understand how it works, then you can expect the CRM software to greatly increase the performance of your company.

Veronica Davis is a full time freelance writer specializing in web content. She has researched and written on an array of topics. You can visit her website at:http://www.vgal.info

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