Customer Loyalty / Customer Relationship Management. Does it Work?

Customer Loyalty (the relationship) is not defined as how customers perceive their relationship with companies, as most often a customer rarely thinks they have any relationship with any company.

Customer relationship management is a popular concept but the concept itself is actually its biggest barrier.

The development of the Customer Relationship Management (CRM) marketing practice has made more and more people realize the importance of strong customer relationship in building sustainable competitive advantages where their markets "perceive" this thus, generating sustainable profits in the long run.

However, current popular CRM marketing practices often produces disappointing outcomes. Surveys show a surprisingly high rate of failure has been reported for CRM practices. The failure rate of CRM systems ranges from 50% to over 80%. The more popular this marketing practice gets the more people who realize that the current CRM practices hardly manages customer relationship.

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Pursuing Lost Customers

Companies that routinely purge inactive customers from further contacts are discarding a highly profitable source of future business. According to Terry Vavra, president of Marketing Metrics, response rates to lost-customer survey usually average 35 to 50 percent. Not only will they tell you what caused them to stop buying -- which allows you to rectify problems in your operation -- many of these customers will soon start buying again, because you've showed you care about their experience. Considering that one loyal customer spends about $50,000 at a supermarket in the course of a decade and about $150,000 at a car dealer over a lifetime, you really can't afford to let these people go!

Why not survey those inactive customers – using a third party survey company like Contact 101 can help you get valuable feedback from those inactive customers. Getting valuable feedback from those inactive customers, gives you the opportunity to win-back those inactive customers.

Customer Experience Management: What your Customers do not tell you

You must have customer feedback to get a pulse on how satisfied or dissatisfied your customers are. Customers typically won’t complain to you, if you don’t receive complaints, you can still be certain some customers are silently fuming. In fact, about 96 percent of dissatisfied customers never tell the company how they feel -- yet they each voice their complaint to an average of nine (9) other people. Nevertheless, if customers' complaints are handled well by the company, about 90 percent do stay with the company after all. Thus it's key not only to satisfy customers who take the trouble to complain but also to actively invite and get that feedback.

Third party surveys is one way to actively invite that feedback, by actively initiating a survey you can gather valuable feedback on your customer’s experience with your company that you probably would not get otherwise.

Market Research Home Grown

Market research is a fundamental necessity and more so today with the choice of methods to find product and services to fulfill customer’s needs.

It's crucial to analyze your market and target your clientele before you waste money on advertising that will not create the desired return. Market research is even more critical before you spending time and effort investing in the development of new products or services.

Conducting market research essentially means gathering the information you need to make decisions about how to move forward with the best chance for delivering on any major business decisions. This often entails a systematic gathering, recording, and analyzing of data relevant to the decisions you need to make for selling products and/or services you produce.

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