To satisfy customers there has always been a need for organisations to understand what a customer perceives to be important. This match may turn out to be quality; perhaps quality of product/service, quality of goods supplied, service delivery time. In other cases it’s about cost: perhaps benefiting from economies of scale or the need for value for money is required. Perhaps even a mixture of all these points. Once understood an organisation can then target its processes accordingly to match those expectations: this process, which requires a unique management strategy for each customer is commonly known as customer relationship management (CRM). In the digital age customer relationships have progressively diminished as customers have expected more and more from suppliers. Businesses have traditionally used simple databases to control what communication they send to which customer and when. The pitfalls of this though have become more apparent over time as the digital age has grown stronger. Whereas before a supplier could simply contact a customer in a certain segment with an offer complementing their situation, the supplier is now faced with increasingly poor response rates: either the customer is not interested, has not opened their email or is just comparing other prices before getting back to the supplier. Customers currently have incredible bargaining power now the internet has become so knowledge rich. If a customer wants to buy something they will more than likely research a few sources first to ensure best value. Take this scenario for example:

Imagine you went shopping for a new pair of shoes. You decided you would visit the shop you bought your last pair from. On entering the shop you were approached by the assistant who sold you the old pair. The assistant was holding the newer version, the same colour, size, and price as those before. Would you instantly buy the shoes because you knew that they were high quality, or that the service from the assistant was fantastic? Perhaps, but more likely you would shop around. Perhaps now you knew the price you might find them in other shops at a better price; you might even find a better style and quality shoe altogether.

The point is, the internet allows you to explore these options before making a decision. Just because a customer bought something from you before does not automatically mean they will buy from you again. In fact you will have merely given the customer a benchmark to beat. This is one difficulty that knowledge online has generated. To begin to overcome this issue you need a CRM system which creates appropriate value where the focus is on enhancing customer experience. Ideally you want your customer to see the value you create to be greater than the risk of getting better value elsewhere. If your organisation satisfies their needs well enough they will associate the risk of moving as too high and thus grow loyalty to you (at least that’s the idea). Too few companies have enough knowledge on customers to provide anything close to a service due to poor customer management tools; even fewer have the competency to provide what a customer would consider value.

For this reason in some industries there exists an opportunity to exploit this deficit in quality customer service. If you can find out what your competitors are doing badly, you should attempt to improve on it helping towards a competitive advantage.

How strong is your customer relationship?

We have established that knowledge of the customer is ‘key’ in creating a strong customer experience. So what knowledge do you need? You might want to understand: who your customers is (market segmentation) and what they want from your organisation; their idea of quality or reason to be loyal; the channel through which they research products and buy from you exclusively online; when they are most likely to buy from you, perhaps seasonally, in the evening, or at weekends; and finally how they will they find you, through search engines, marketing campaigns, blogs or your website. The answers to these questions are readily available to you in one form or another, you just need the correct strategy. The digital age has delivered some invaluable communication tools to measure the behaviour of the customer as part of your strategy. You might consider updating your customer management database to utilise these tools so you can generate a dynamic profile of each customer.

For obvious reasons your database is an essential tool in organising your customer’s information, behaviour and requirements. At the very basic level it should contain the standard contact details of customers, and ideally their correspondence relating to what was sent, why, when and how. This data allows you to build and implement a basic work flow system where the CRM process can become automated; the sales staff get notified when a customer is to be updated with information on their purchase and whether a newer product has been released that the customer would be interested in. From this stage your database needs to become dynamic – it needs to provide you with data that is able to predict customer behaviour not just report it. It needs to distinguish between the most and least valuable customers; data on past purchases (frequency and how much spent) can begin to facilitate this information. It must also allow you to focus your time and resources on improving the remainder customers experience and not waste time with drifters. This remainder list of valuable customers then gives you your main focus – you will be able to decide which customers are more likely to reply to a marketing message/offer and purchase products than others. For example, those who have purchased from your online shopping cart within the last month are more likely to purchase than those who purchased 12 months ago. You might also need to measure how frequently each customer purchases a product from you and how much they spent?

Research from consultancy firms has shown that the longer the time between a customer purchasing a product and a company communicating with that customer the less likely the customer will want to purchase from them again. The reason is that they become more aware of what competitors are selling and less aware of the service experience they had with that company. For this reason, it has been stated that companies that exploit this latent period with a form of communication, either a customer satisfaction survey or a recommended product of similar value, will significantly increase the chance of re-purchasing. A CRM system could be set up to supply this information. If this is efficient enough that company could develop a distinct advantage over its competitors.

Build a customer database through trust and service quality

Would-be customers need motivation to engage in a company’s brand before they can trust it or assess worthiness. A scenario where a customer comes across a company for the first time will depend on the communication channel chosen by the prospective brand. Communication through a website is particularly common and popular. The customer may have found the website via a search engine result and/or a sponsored link. They may have been contacted via a targeted email campaign (emails are often purchased in a bundle, they can be filtered via job title, industry, demographic etc), a sponsored ad such as a display ad positioned by a partner/mutual company web site, a third-party social networking site or a recommendation in a blog. If targeted correctly and consistently a customer begins to trust and grow confidence in the brand. They may not initially understand your company, they may just have noticed your logo online or recognised the name from an email they chose not to open. However, if the targeting is clever enough and is targeted correctly to searching customers, your brand develops a level of trust: “if it is constantly appearing in my searches then they might be what I’m looking for.” To develop this strong customer-to-brand relationship you would want the customer to follow a number of stages.

The first is participation: this is where a customer lands on your website and decides within a matter of a few seconds whether you are the right business for them. Your website should be designed so that it generates curiosity if not genuine interest for the visitor. Once landed and interested in the initial appearance the visitor is drawn to the content. From the point when a customer lands on the site their behaviour is measurable, i.e. time spent on each page, pages viewed where they have clicked to name a few. If the customer is impressed enough with content, i.e. if the product has sufficient value, they begin to interact, and enter the second stage – communication. Your site should have some means by which a customer can express opinion, customers could reply to blogs, read reviews, comment on these reviews, and even interact with online customer service. This activity opens up the measurement facility even further, now the company can measure frequency of participation, subject or interest, and category of product viewings. If you have a subscription via a newsletter where a visitor can receive further information, then if correctly linked, further engagement from an e-mail marketing campaign to the website can be measured. The newsletters could contain links to your site, in reply to a followed link this interest can be measured and thus used for future marketing campaigns. The final stage required from a visitor is – influence. You want to provide a service via information about your company which will cause a visitor to recommend the brand or service to others. All of this information can be used in a dynamic database.