Customer relationship management: How to improve your strategy

Successful brands know how important customer satisfaction is for the success of their company. Leading companies understand that the way they deliver a product or service to the end customer is becoming as important as the quality of the product itself.

Developing a strong customer relationship has emerged as the key driver for growth and sustainability across industries, and brands increasingly realize they are in the customer-relationship business. Case in point: According to Salesforce research, 88% of customers say the experience a company provides is as important as its products or services.

As a result, businesses are shifting their focus from traditional product-centric strategies to customer-centric approaches. This paradigm shift involves understanding customer needs at a deeper level and tailoring experiences to meet those needs. Companies are investing in advanced customer relationship management (CRM) tools, data analytics and personalized marketing strategies to enhance customer engagement. By doing so, they aim to create a more holistic and satisfying customer lifecycle journey, which not only attracts new customers but also fosters loyalty among existing ones. This approach is crucial in an era where customer loyalty can significantly impact a brand's reputation and bottom line.

What is customer relationship management (CRM)?

Customer relationship management (CRM) is a strategic approach to managing and analyzing customer interactions and data throughout the customer lifecycle. By fostering stronger customer relationships, CRM drives sales growth and retention. CRM is often facilitated by technology tools such as CRM systems and customer data platforms (CDPs). These platforms help businesses compile and analyze customer data from various touchpoints between the customer and the company, which could include the company's website, telephone, live chat, direct mail, marketing materials and social media.

What is the difference between customer experience management and customer relationship management?

Both customer experience and customer relationships are crucial components of customer lifecycle management, but they focus on different aspects of the customer-business relationship:

Focus

• • • • • Customer experience management (CEM): CEM focuses on the customer's holistic experience with a brand or company. It encompasses every touchpoint a customer has with the company, from navigating the website to interacting with customer service and using the product or service. The goal is to optimize these interactions to create a positive, memorable customer experience.
        • Customer relationship management: CRM, on the other hand, is more focused on managing the company's relationships and interactions with current and potential customers. It involves strategies to improve business relationships, streamline processes and increase profitability.

Scope

• • • • • CEM: This is broader in scope than CRM, encompassing the entire customer journey, including marketing, sales, service and brand perception. It's about understanding and improving how customers interact with and feel about the brand at every stage.
• • • • • CRM: CRM is more specific in its scope, concentrating on direct interactions with customers, such as sales and service-related processes, and managing customer data. It often involves using CRM software to organize, automate and synchronize sales, marketing, customer service and technical support.

Objective

• • • • • CEM: The primary objective is to enhance the overall customer experience, which can lead to increased customer satisfaction, loyalty and advocacy.
        • CRM: The main goal is to improve business relationships, increase customer retention and drive sales growth.

Tools and processes

• • • • • CEM: Involves using customer feedback, data analytics and market research to understand customer needs and perceptions. It often requires cross-functional collaboration within the company to ensure a consistent experience across all touchpoints.
        • CRM: Utilizes CRM software to collect, store and analyze customer information. This data helps in personalizing customer interactions, managing sales pipelines and providing better customer support.

Outcome

• • • • CEM: A successful CEM strategy leads to a better customer experience, which can translate into higher customer satisfaction, loyalty and advocacy.
      • CRM: Effective CRM strategies result in stronger customer relationships, improved customer retention and increased sales.

While CEM is about managing the customer's end-to-end experience with a brand, CRM is more focused on managing the company's relationships and interactions with its customers. Both are essential and often interconnected; a good CRM system can provide valuable data that informs CEM strategies, and excellent customer experiences can strengthen the relationships managed by CRM processes.

How to build a customer relationship management strategy

Once you thoroughly understand the customer relationship management meaning, it’s time to tackle building an effective strategy. This process involves several key steps, each focused on understanding and improving your interactions with customers. Here's a guide to developing a robust CRM strategy:

Understand your customers:

• • • • • Resolving various identity fragments (device IDs and accounts) helps brands truly understand their customers on an individual level. When brands can see their customers on a 1:1 level, they can create optimal relationships based on that unique buying behavior and preferences.

Define clear objectives:

• • • • • Determine what you want to achieve with your CRM strategy. Objectives could include increasing customer satisfaction, improving customer retention, boosting sales or enhancing personalized marketing.

Choose the right CRM technology:

• • • • • Select a CRM system that aligns with your business needs and objectives. Ensure it can integrate with your existing systems and scale as your business grows.
        • The CRM software should offer features like contact management, sales tracking, marketing automation and analytics.
        • Explore how a Customer Data Platform (CDP) complements your CRM providing a unified view of customer data for targeted marketing.
          
          
        • Consider combining your CRM with a CDP to optimize marketing efforts and gain deeper customer insights.

Collect and manage data effectively:

• • • • • Implement processes for gathering high-quality customer data with consent.
        • Ensure data is organized, up to date and accessible to relevant team members.

Personalize customer interactions:

• • • • Use the data to personalize interactions with customers. This could be through tailored marketing messages, personalized offers or customized product recommendations.

Train your team:

• • • • Ensure your team understands the CRM system and the importance of customer relationships.
      • Provide training on how to use the CRM tools effectively and how to engage with customers in a way that builds relationships.

Implement a customer feedback loop:

• • • • Regularly collect feedback from customers through surveys, social media and direct communication.
      • Use this feedback to make improvements to your products, services and customer interactions.

Monitor and analyze:

• • • • Regularly review the data and reports generated by your CRM system to analyze customer behavior, sales trends and the effectiveness of marketing campaigns.
      • Adjust your strategy based on these insights.

Foster a customer-centric culture:

• • • • Encourage a culture within your organization that prioritizes customer relationships.
      • Ensure that every department understands how their role impacts the customer experience.

Continuous improvement:

• • • • CRM is an ongoing process. Continuously look for ways to improve customer interactions and update your strategy based on changes in customer behavior and market trends.

Remember, a successful CRM strategy is not just about the technology you use; it's also about how you use that technology to understand and meet the needs of your customers.

Tips for improving your customer experience

The most important part of improving customer experience is understanding the customer and what the customer needs.Each customer has their idea of an ideal experience and it's your job to understand every individual's journey, both online and offline. Forrester research shows that customer experience improvements drive increased customer loyalty.

A solid customer experience starts with the brand and the brand's understanding of that individual's full scope of interactions with the brand. This is not easy to do,many brands have entirely different departments for email and loyalty programs, not to mention outbound digital campaigns. One of the best ways to ensure that you bring this together is through using a third-party persistent identifier that can connect all of these touch points back to a single consumer ID.

Having clean, organized data that's well-connected across the business and available in real-time is essential. Since many different teams interact with customers and affect customer experience, it's important to have a clear picture of overall effectiveness, and the only way to achieve that is to use data coming from multiple touch points. For example, if the digital team and marketing team aren't connected, they won't know how many times a certain consumer is receiving messages through various communication channels.Monitoring the customer relationship: Metrics that matter

Measuring customer relationships involves assessing various aspects of how customers interact with and feel about your brand. Here are key metrics and methods to effectively measure customer relationships:

Customer satisfaction (CSAT):

• • • • • This metric is gathered through surveys asking customers to rate their satisfaction with your product, service, or a specific interaction. It's usually measured on a scale (e.g., 1 to 5 or 1 to 10). This usually asks the question, "How satisfied are you with your experience?”

Net promoter score (NPS):

• • • • • NPS measures the likelihood of customers recommending your product or service to others. It's a strong indicator of customer loyalty and is obtained by asking customers how likely they are to recommend your business on a scale of 0 to 10.

Customer lifetime value (CLV):

• • • • • CLV predicts the net profit attributed to the entire future relationship with a customer. Understanding CLV helps in making decisions about how much money to invest in acquiring new customers and retaining existing ones.

Customer retention rate:

• • • • • This measures how well your business retains customers over a period. A high retention rate indicates that customers are satisfied and continue to engage with your brand.

Churn rate:

• • • • • The churn rate is the percentage of customers who stop using your product or service over a specific period. A lower churn rate indicates stronger customer relationships.

Customer engagement metrics:

• • • • • These include metrics like website visits, time spent on your site, open rates for emails, social media interactions and repeat purchase rates. High engagement often correlates with a strong customer relationship.

Customer effort score (CES):

• • • • • CES measures the ease of customer experience when interacting with your company. It's based on the premise that customers are more loyal to a product or service that is easier to use.

Feedback and complaints analysis:

• • • • • Regularly reviewing customer feedback and complaints can give you valuable insights into areas needing improvement.

Qualitative feedback:

• • • • • Conducting interviews, focus groups or open-ended surveys can provide deeper insights into customer attitudes and feelings toward your brand.

Remember, no single metric can give a complete picture of customer relationships. A combination of these methods, tailored to your specific business context, will provide the most accurate and actionable insights.

Conclusion

Customer relationship management may seem complicated, but all you need to do is find the right partner. Through our extensive suite of Epsilon PeopleCloud solutions, we help brands connect their consumer’s online and offline activity to a single ID that their brand owns. From there, all media decisions and measurements tie back to that ID, building a comprehensive view of each brand’s customers. We know how to bring data together to enhance your brand’s customer lifecycle and bring it to the next level.

Explore how Epsilon's CRM solutions can transform your customer relationships and drive growth. Contact us today to learn more.