Home arrow Managing CRM arrow Creating and Managing Customer Relationship  
Creating and Managing Customer Relationship
Setting up and managing individual customer relationships can be broken up into four interrelated implementation tasks. These implementation tasks are based on the unique, customer-specific and iterative character of such relationships.

1. Identify customers. Relationships are only possible with individuals, not with markets, segments, or populations. Therefore, the first task in setting up a relationship is to identify, individually, the party at the other end of the relationship. Many companies don't really know the identities of many of their customers, so for them this first step is absolutely crucial. But for all companies, what the identify task also entails is organizing the enterprise's various information resources so that the company can take a customer-specific view of its business.

You can download excellent powerpoint slides on Marketing Strategy and Marketing Management HERE.

It means ensuring that the company has a mechanism for tagging individual customers, not just with a product code that identifies what's been sold, but also with a customer code that identifies the party that the enterprise is doing business with—the party at the other end of the mutual relationship. An enterprise must be able to recognize a customer when he comes back, in person, by phone, online, or wherever. Moreover, enterprises need to "know" each customer in as much detail as possible—including the habits, preferences, and other characteristics that make each customer unique. When you call the toll-free number at Speigel, the rep knows about your last catalog order.

2. Differentiate customers. Knowing how customers are different allows a company (1) to focus its resources on those customers who will bring in the most value for the enterprise, and (2) to devise and implement customer-specific strategies designed to satisfy individually different customer needs. Customers represent different levels of value to the enterprise and they have different needs from the enterprise. Although not a new concept, customer grouping—the process by which customers are clustered into categories based on a specified variable—is a critical step in understanding and profitably serving customers.

You can download excellent powerpoint slides on Marketing Strategy and Marketing Management HERE.

The customer differentiation task will involve an enterprise in categorizing its customers by both their value to the firm and by what needs they have. Some call centers constantly change the order-to-serve of the customers on hold based on the different values of the waiting customers. Although it would be ideal to answer every call on the second ring, when that's not possible, it would be better to vault the customers keeping you in business ahead of the customers of dubious value. In many call centers, this reshuffling is not at all apparent to customers.

3. Interact with customers. Enterprises must improve the effectiveness of their interactions with customers. Each successive interaction with a customer should take place in the context of all previous interactions with that customer. A bank may ask one question in each month's electronic statement, and next month's question may depend on last month's answer. A conversation with a customer should pick up where the last one left off. Effective customer interactions provide better insight into a customer's needs.

4. Customize treatment. The enterprise should adapt some aspect of its behavior toward a customer, based on that individual's needs and value. To engage a customer in an ongoing Learning Relationship, an enterprise needs to adapt its behavior to satisfy the customer's expressed needs. This might entail mass-customizing a product or tailoring some aspect of its service. This customization could involve the way an invoice is rendered or how a product is packaged.

Source of Reference:
Don Peppers and Martha Rogers, Managing Customer Relationships: A Strategic Framework, Addison Wiley. You can obtain this fine book here

You can download powerpoint slide on CRM and marketing management here.