Customer Relationship Management (CRM)

Customer Relationship Management System CRM in word tag cloud

Customer Relationship Management System CRM in word tag cloud

The English acronym CRM stands for Customer Relationship Management; a term that can be confusing but that is mainly based on two concepts: one is management focused on customer relationships, and the other refers to the software used for managing the relationship with customers.

Customer relationships are a key objective for any business; a goal that is not new but that has gained importance within organizations, especially in recent years, due to the use of new technologies, where customer experience is more than just an aim. It has acquired such relevance that it has developed an entire industry around it.

CRM is a relatively new term. In fact, not even the experts agree on a single definition. What is clear is thatit seeks to generate more profit by focusing efforts on customers. In the end, profitability means satisfied customers, which means, in turn, that it is a business strategy that gives prominence to customers and, together with good service, seeks to make them happy. The more satisfied a customer is, the more lasting his loyalty to the company.

Everyone knows that it is much more costly to attract a new customer than to retain an existing one. And that is what CRM seeks to achieve, to retain existing customers or increase their customer loyalty so as to increase profitability. This is the “secret” behind their growth and the reason why companies are increasingly putting more emphasis on promoting knowledge from their customers, which will allow them to find out opportunities for both cross sales and complementary sales.

Main objectives of CRM

beneficios de un crmToday, those with a competitive advantage are the ones that have a customer-oriented internal organization. Until recently, the main focus was on the product. Thus, this process requires implementing CRM software in the organization, that is to say, a computer system supporting the management of customer relationships, sales and marketing.

But only the use of this software is not enough, as the overall concept of CRM is, on the one hand, based on the software but, on the other hand, it should complement a management model that follows the philosophy of customer satisfaction we are discussing. This entails adapting all processes and behaviors that are related to the interaction with customers. A CRM enables identifying anything that creates value for customers to then provide it on time.

In this context, the new technologies, together with the CRM, allow us to know our customers better and offer them what they want at all times; differentiate marketing activities, thus saving costs; know the value of customers, which makes it possible to encourage cross-selling and loyalty strategies; and develop proactive and efficient marketing campaigns, among others.

Implementing CRM in the organization

It would be pointless to make the contact methods available to customers unless we enable efficient communication, in a rapid and bidirectional manner. Therefore, no matter if they contact by email, phone or social networks, the priority must be direct attention without having to go through various departments. Real-time communication is the best possible scenario.

Having a department in the organization that specializes in customer service can be essential to the effectiveness of the strategy, as many companies today still do not have a particular department or coordinator.

Another key aspect to integrating a successful CRM is employee training and education. Besides, it is essential to carefully select the tools, which must be adapted to the company’s needs. Before implementing a CRM, the company should consider whether they aim to increase sales, reduce costs or reduce the sales cycle.

The ultimate goal if we are to be successful, and regardless of whether we decide to install this or that software, is an organization focused on the customer, that is, customer-oriented. This involves systems and processes, but especially workers oriented to customer satisfaction. In this regard, it is necessary to define management indicators that measure the satisfaction of our customers. Thus, the organization will have feedback on what actually happens. Only then can we know whether these actions, including the implementation of a CRM, can be any helpful in terms of what really matters: having an increasing number of satisfied customers.

The management indicators measuring customer satisfaction should be of two types. First, the objectives, KPIs (Key Performance Indicators), numerical values that account for the percentage of claims resolved in less than two hours, orders served within 24 hours, etc., but we also need “subjective” indicators, that is, we will need to ask customers –not through endless surveys, but through short questions that can be answered in two minutes regarding what we measured in numbers. We need to correlate what we measure numerically with what customers really think in order to find out if we are directing our efforts to what they actually consider to be important. In our experience, we often encounter surprises when we do, because we sometimes do things only with a view to ourselves, “navel-gazing”, and not with a view to our customers.

Finally, it is worth mentioning that CRM systems can often become CMR systems (Customer Managed-relationship). It is a customer relationship complementary approach where customers are encouraged to control the relationship, so that they can manage the access to the information, the orders and others. To this aim, we also use a specific methodology and software and, most importantly, the huge capacity of the Internet.

Incorporating the CMR vision to our CRM management gives us a great value because it will increase customer satisfaction and often reduce costs. Yes, both things! Think of the case of electronic banking. It is us as customers who actually do the work; we consult balances, make transfers, buy or sell shares, etc. Banks are able to reduce their operating costs as these tasks were previously managed by their staff, either employed by the company or outsourced, so the cost now is far lower. Moreover, it is more practical and efficient for us because we can do it any time of day and with no queues. This is the advantage of the CMR approach to CRM systems, to achieve higher customer satisfaction with a lower operational cost for the company providing the service.

To conclude, today there is no alternative to a customer-oriented strategy, at least not in businesses that are not monopolies. Thus, the development and implementation of CRM systems is one of the keys, as well as the CMR approach where possible, which can help us close the virtuous circle we all strive for: more customer satisfaction at lower operating costs.

Ecommerce: Up selling i cross selling

The growth of e-commerce has led to the evolution of online stores, increasingly making them ‘smart’ stores. You have surely noticed that there are many online stores today that, once you have chosen the product you want to buy, automatically suggest accessories or other products. They know our tastes.

One of the main concerns for any e-commerce is to increase its sales. To this aim, there are many strategies and techniques that exist and that are currently being applied. This article will focus on two of them: up selling and cross selling.

Up selling

The purpose of an up selling strategy is to encourage a user, who has shown interest in or chosen a product on an online store, to upgrade it to a higher-end product which generates more profit for the e-commerce.

Let’s think, for instance, of an e-commerce that sells watches and assume that a customer who is in our online shop has added one to his shopping cart. An example of an up selling strategy would be to show similar, but higher-end watches, and make him see the benefits of these products against the one he had chosen first place.

Up selling i cross selling

The aim of up selling is that the customer buys more expensive products, which generate more profit, not that he buys more items. This means that the purchase process phase when we apply it (timing) is essential in the up selling strategy. Success depends on applying it at the right time, which usually corresponds to the online checkout of the product, by seeking a product related to that the customer intends to buy. When doing so, we increase the chances of reaching the sales desired. But it is also important to apply it in a subtle way that is not aggressive, and to facilitate the purchase as much as possible. We should be careful not to lose a purchase searching for a better one!

Cross selling

Instead, a cross selling strategy aims to have customers add more products to their shopping cart.

We often see this technique successfully applied in online stores related to fashion or many other sectors. Let’s look at the case of Zara:

Cross selling

A customer enters her e-commerce, shows interest in buying a pair of shoes and seems determined to make the purchase. This is where the cross selling strategy comes in, which involves offering or showing products that complement the one the customer wants to buy. In this case, if the customer wants to buy shoes, she may need or want a complement that perfectly matches her new shoes.

Unlike the up selling strategy, the cross selling technique can go beyond the time of the purchase, so the timing is not so critical. If the customer has decided not to buy any additional product at the moment, you can offer these new products later on via email or through other means. In fact, much of this strategy relies on having a database of customers who are offered related products, in line with their latest acquisition or previous purchase.

When applied subtly and creatively, both techniques are very effective strategies that can deliver great results to e-commerce. The key is that customers do not feel pressured to buy more or spend more. If so, the result can be quite the opposite.

The strategy will be successfully implemented if the customer has the feeling that he is being offered a better solution, an additional service, and not that he is ‘made to buy’ a product different from the one he wants.

Maybe you still haven’t noticed, but airlines, for example, have been implementing these techniques for a long time, offering insurance, car rental, hotel reservations and others in the checkout process along with your ticket.

Up selling i cross selling 2

Finally, it is worth mentioning that both cross selling and up selling are techniques aimed at increasing sales. Therefore, e-commerce should already be generating sales when we apply them. They will not work in the growth phase of a new company e-commerce when sales are very low, which would require applying other strategies.

Omnichanneling: the challenge of retail


Omnichanneling1-300x204As customers, we expect to be treated fairly and receive an effective service from companies. Brands are aware of this and they know that our level of demand is growing at about the same pace as the competition. Thus, we will only go back to a brand if they provide an exceptional service and they make an effort to surprise us. Hence, the great importance of the concept “customer experience” over the last years, referring to the consumer experience or shopping experience.

The way we buy now has nothing to do with the way we did 10 years ago. In fact, the purchase experience might be broken down into three phases; first the search of information, secondly the economic transaction and thirdly the delivery of the product or service. These three phases can be combined in different ways and performed in different media. Today, our process of purchase always includes the search of information about the product or service online. Before the purchase we check comments and ratings of other users who already have consumed what we want to buy. This search of information is often complemented going through the physical points of sale only to consult doubts with the sellers or closing the two remaining phases in this precise moment.

Therefore, the economic transaction and the delivery of the product or service can go together or separately. We can pay through the network and collect the item from a physical point of sale or we can pay through the network and have it delivered at home. We can also pay and collect it at a physical point of sale and many other combinations that can be given. Summarizing, the models are completely opened and we cannot say that the Internet is definitively killing the sale and delivery at a physical point or vice versa. The most veterans will probably remember the famous “Video killed the radio star” that the Buggles were singing in 1979, but today there is no video any more and the radio is more alive than ever before.

The rise of e-commerce has long worried the retail sector. Many wrongly predicted the end of the physical store, like the Buggles did with the radio. However, consumers have eventually decided that, although they still prefer the physical store as the main sales channel, the digital support has contributed to fully satisfy their wishes. Consumers’ demands automatically increased and the retail sector had to adapt to their new customer profile. In face of the inevitable ‘renew or die’, the safest bet is to expand the digital space to the world of the physical sale.

This new scenario has pushed retail companies to adapt to new consumer demands and uses technology as a powerful tool to adapt their communication and the ways in which they interact with customers, to improve customer experience and provide added value to every purchase.

When we talk about omnichanneling, we are actually referring to the evolution of the multichannel. It is no longer enough to be present in the consumer channels (not just digital, but physical). It is essential to effectively manage these channels so as to create a flexible and satisfactory shopping experience, adapted to their consumption habits and where the use of technology is also present. For example, if a customer visits the physical store to buy a product he has researched on the website, he needs to find a coherent response.

Developing and implementing an effective omnichanneling strategy is not easy. Coordination of the different areas of the company is key to maintaining the consistency required. Each channel needs its own kind of communication. Dealing with the customer via e-mail is different from communicating through social networks or over the phone. Nevertheless, it is indispensable to define a strategy that allows that the messages and actions carried out result in the accomplishment of a coherent global communication. We cannot act differently when communicating on twitter, on the phone or answering emails. Customers will probably interact with us through many media and they cannot detect that we are incoherent.

If we think we can provide the service in different ways, often through subcontractors, it is especially important that we monitor and make sure that everyone contributes to generating the same shopping experience, whatever it is that we have defined in our strategy. We need to coordinate properly the internal and external resources to have everyone aligned.

I dare say that beyond communicating consistently from all channels, which is obviously essential, the secret lies in listening to customers and consumers, not only to offer them a full range of solutions, but also to guide them to where they need. We need to guarantee a purchase experience that is coherent with the strategy we have defined. If we can accomplish this goal, we will be successful, otherwise we will disappear. These are the rules of an exciting sector and that moves at great speed, so we’d better wise up!

Twitter’s challenge as a customer service tool to manage the last mile


Customer service is one of the most important factors in any business, but when it comes to e-commerce, it is even more important. E-Commerce is growing exponentially thanks to mobile devices, and customers are increasingly more demanding. They demand a quick response when tracking the product they have purchased and its reception date. E-mail and telephone have been the most common channels for this type of business so far. Today, more and more companies are committed to customer service through social media, where Twitter is the star, as it is a two-way communication social network that allows for immediacy. Bidirectional communication and immediacy are key elements in the management of any customer service process, and this is where Twitter excels. To manage orders, provide information and get back to the customer, the famous social network uses 140 characters, which means we need to be careful. A complaint or a negative comment via e-mail or telephone stays between the company and the customer, while on the social media, it is exposed to everyone and it can negatively affect the company. If the company manages to provide immediate and effective customer service through Twitter, the consequences will result in benefits, improving the brand’s credibility, in addition to saving time to both the customer and the company. The multiplicative effect of social media, especially Twitter, requires that we manage them carefully and we assess every answer we post. They should be handled by professionals only. The users who place orders and communicate with the company through social networks are young, used to online shopping and they interact on social media naturally. In most cases, the reason for the communication comes from the interest or the need to know where our order is and when we will receive it. Thus, besides being the perfect tool and making the enquiry process effective, Twitter is also very useful to track the process from product shipping to customer reception.

Advantages of using Twitter as a customer service tool

Speed While other channels like the telephone do not easily allow to filter customers and select those with priority, Twitter easily allows to make a selection and take care of the most urgent cases first.

Credibility Proper media management can greatly improve brand image.

Reduce costs The cost per user interaction with Twitter is much lower than with other customer service systems. If we compare it, for example, with a call center, the costs are much lower. In any case, they are complementary systems, which allows us to segment the different communication channels based on the user’s profile.

Mobility It enables to contact customers anywhere and from any device with an Internet connection.

How to provide excellent customer service

An exclusive customer service channel The Twitter customer service account must be independent. Do not use the company’s promotional account for customer service.

Immediacy Anyone contacting a company via Twitter expects an immediate response, and so it must be. The customer’s or user’s perception and subsequent opinion of the brand greatly depends on the time it has taken to respond. Therefore, we must establish a maximum response time that is the shortest possible and prioritize, that is, classify messages and answer the most urgent first.

Performance Although it may seem otherwise, the 140-character limit is an advantage, because it requires more precision and accuracy in the answer. Bearing this in mind, we need to avoid misinterpretations and make clarifications when appropriate, and thank the customers every time they contact us, whatever the reason for the communication.

Make an effective follow-up Once the question or issue has been solved, it is advisable to contact the customer after a few days to see everything is fine. This is something that users and customers highly appreciate. It is essential to maintain customer loyalty. In general, around half of all queries through the Twitter customer service account of an e-commerce business aim to track product shipping. The other 50% account for complaints, timetable information requests and others. All things considered, Twitter is an effective channel for customer service that is suited to the needs of the last mile. Using this tool means comfort, added value and many advantages, since the prosperity of social networks is almost incalculable. It ensures what every customer service process needs: immediacy, two-way communication, and at a very low cost per user interaction.