Magazine article Marketing

In the Know

Magazine article Marketing

In the Know

Article excerpt

Knowing more about your customers is critical to building a lasting, profitable relationship in a more competitive world.

It's an increasingly common boardroom challenge: increase revenues and customer service, but also cut costs. To do this, it is vital to use Customer Relationship Management (CRM) techniques to create customer loyalty and increase long-term profitability of customers -- so maximising the overall bottom line.

"It isn't just about delivering products on time at the right price, but capturing knowledge about the customer and using it intelligently to develop a relationship with them over time."

However, retaining customers can no longer be taken for granted. Loyalty has to be continually earned through building strong, ongoing relationships. Customers are increasingly seeking increased value through higher quality service, which has become the new benchmark by which organisations of all types are judged. It's been fuelled by the growing importance of the Internet as a channel.

In KPMG Consulting's recent E-commerce report a third of companies believed the most important benefit of the Internet was its ability to reach new markets or customers. 81% felt it would revolutionise dealings with customers.

"The Internet reduces the friction in the traditional bricks and mortar marketplace, so prices become more transparent and searching for different suppliers becomes much easier," says David Grimshaw, senior lecturer in information systems at Cranfield School of Management. "Therefore, to remain competitive there is an increased emphasis on customer value, or providing value added services. It isn't just about delivering products on time at the right price, but capturing knowledge about the customer and using it intelligently to develop a relationship with them over time."

This means that customer-facing staff, wherever they are in the organisation, must have access to all the information about customers and their relationship with the organisation. Making this information available means having a single customer database. In smaller organisations, this is often part of the core business system, whereas larger organisations often build on their operational systems, such as SAP, to create a separate "data warehouse".

This database has become even more important with the arrival of the Internet. Customers expect rapid response in an environment where the competition is just one mouse click away. …

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