Customer Relationship Management 101

CRM is the current enterprise best practice and a solution to long term business profitability.. as we witness the huge shift from a “product focused” or “company focused” business strategy
to a “customer focused” business strategy.

It all starts from selecting a customer to consistently creating a significant value for that customer and in turn broadening the scope of business offerings to the customer with a continuous effort in retaining the customer. Thus extending the customer relationship lifecycle and creating a customer lifetime value. Following narrates a framework which will help companies to understand the core B2B marketing strategy.

The framework for CRM starts from:

• The customer selection criteria should be well specified and evaluation needs to be  done on basis of thorough analysis of adequate quality data and should orient with the firm’s core competencies, vision and  long term strategy
• Firms need to expand the scope of their business by inclusion of different types of customers and manage this portfolio of customer relationships differently
• Also, at every stage in a customer relationship lifecycle, the firm should have a clear vision in monitoring the different customer roles played and level of investments and costs incurred on them. This solves the cost vs. price paradox
• Also, with a higher customer lifetime value(CLV) a firm sees values in a sustained relationship in form of ability to learn in form of product improvements or to serve other customers better or enhancements in logistics, sales & marketing operations. As the renowned writer, successful consultant and strategist Peter Drucker said: any enterprise has two basic functions: marketing and innovation
• The key is to understand, create and periodically monitor changes in optimal customer value stack in alignment with the Decision Making Unit with the buying firm. This enables the firm in sustaining a healthy relationship and ability to strategically create a customer lock-in

Thus, a strong dynamic framework should be followed in selecting, developing and maintaining successful portfolio of customer relationships. Proper adoption of such framework in different customer lifetime situations will definitely help firms create a higher CLV, lower churn rate, lower costs and maximum profit margins$$$.