CRM is one of the buzz words that has been going around for a while now, as an entrepreneur and hustler it is important that you are in the know of what it means because smart businesses and big brands are taking advantage of it to scale higher. In its true meaning, CRM stands for Customer Relationship Management. Alot of people always mistake CRM for a software or even worst an excel spreadsheet. I hear statements like “We need a new CRM!” ,
Sorry to cut you short ma, You don’t need a new CRM, it is not something you acquire, it is a conscious “practice” by your business. Oh! Maybe you were trying to say you need a new CRM software/system, okay I get you now.
What does CRM really mean? Well, Customer Relationship Management is a business’s approach to understanding and influencing customer behavior through meaningful communication inorder to improve – Customer acquisition, Customer retention, Customer loyalty and Customer profitability. Let me say it once again, CRM is not a software, an excel spreadsheet , or a notepad file with customer details, it is an approach and strategy to maximize the relationship you have with your customers. Do you remember that email newsletter you got from that company? Whether it was just a message to say hi or to inform you of new products, that’s CRM in effect.
Customer Relationship Management (CRM) is a business’s approach to understanding and influencing customer behavior through meaningful communication inorder to improve – Customer acquisition, Customer retention, Customer loyalty and Customer profitability
Also, CRM can be said to be an approach to understanding the profitable customers and those that are not. A model called RFM can be used to determine which customers are profitable and which are not.
Recency ( How recent a customer purchases )
Frequency ( How often a customer purchases )
Monetary Value ( How much a customer spends on each purchase )
This post is just a general introduction to the true meaning of CRM and it’s importance to businesses. It is good to have CRM as a practice in your business but to make things more effective, you will require a solid CRM strategy and CRM system.
I will explain CRM Strategies, CRM systems and their various types in another post. Make sure you check around.