Essay Sample on Effectively Managing Relationships With Customers

Introduction

Building long-lasting relationships with customers or, increasing their loyalty to the brand, or to the company's products and services, is becoming an increasingly persecuted strategy over time (Hitt, Ireland, & Hoskisson, 2014). The problem of customer retention is a critical aspect in today's business, and that is why it is important to build and cement a relationship with the customer that focuses on customer behavior. The study of their sophisticated attitudes and habits goes far beyond a simple newsletter, special discount programs, e-mails or greeting cards that make them feel happier and loyal (Mithas, Krishnan, & Fornell, 2005). The sophistication of their behavior requires important changes in the management of customer relations and, above all, greater knowledge of the same. That is why it is important to study how customer relationships can be effectively managed. Therefore, the ability to create, enhance or maintain relationships with customers can become an asset that is inimitable for competitors, with the consequent effect on the maximization of value applicable in the management of the relationship.

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Analysis

Strategic planning is the process by which an organization defines its long-term vision and the strategies to achieve it from the analysis of its strengths, weaknesses, opportunities, and threats. It involves the active participation of the organizational actors so that it becomes a management style that makes the organization a proactive and anticipatory entity. A customer is the foundation of the success of any business (Bolton & Tarasi, 2007). The high competition that exists today in the market requires companies not to consider the efficiency of supply chain management only from an internal, isolated aspect, such as the improvement of processes or interdepartmental communication. To be competitive in this market, they must foster relationships with customers (Hitt et al., 2014). Currently, consumers have more information available to them mostly because of the internet, they are smarter, knowledgeable and more self-sufficient than ever, which represents a great challenge for companies that seek to meet their expectations and earn their trust (Bolton & Tarasi, 2007). Customer management is a priority for a large number of organizations that, through relational marketing tools, try to increase retention and sales rates per customer. This requires marketers to be more capable of understanding the value dimensions of relationships when managing their client portfolio in an efficient way (Payne & Frow, 2005). They must dedicate time, effort and prioritize the cultivation of relationships with customers since they can be a key source of value for the creation of competitive advantages.

Effectively managing customer relationships allows the company to integrate sales, marketing and services to produce targeted events, campaigns and promotions. It is necessary that a company encourages a culture of consumer appreciation and strives to understand how these relationships should be fostered. The main purpose is to retain clients, which includes their complete satisfaction, the anticipation of desires and demands, treatment with dignity and respect through the provision of adequate products and services (Reinartz, Krafft, & Hoyer, 2004). Therefore, the company must have a culture focused on customer service and obtaining useful information. That is why this process encompasses three steps: automation of marketing management, business management, and product and customer service management. These activities result in information, which is entered into a database (Mithas et al., 2005). When used properly, it is possible to consult them at any time and make more precise decisions. This requires standardization of records, such as email, telephone, social networking profiles, and so on.

One of the best and most efficient ways to ensure that the strategic plan of a company remains not only viable but relevant is to ensure that the needs of the customers are met, and managing relationships with customers will ensure that these needs are met. In short, customers seek better quality, design, innovation, choice, convenience, and service. They also seek to spend less money, make less effort and take fewer risks (Gulati & Oldroyd, 2005). The management of customer relationships and customer service will help a company to customize the product or service based on their needs, providing a good user experience and involving them, for example using social media and through other actions, of the way that they provide information that serves the company to generate demand.

Solution

Having an adequate knowledge of the customer is an essential step in the construction of a customer relationship management (CRM) model. Building a long-term and loyal relationship requires constant communication, and in the field of business, this is no different (Reinartz, Krafft, & Hoyer, 2004). Today, companies must build communication mechanisms that allow them to know the opinion of their consumers as soon as possible in order to improve their experience (Hitt et al., 2014). The quality that customers value the most is the speed and efficiency with which companies meet their demands, to such a degree that most of them expect the website to incorporate a self-service mechanism that answers their questions and queries immediately, a reality especially important for new generations of buyers. There are several steps that a company has to follow in managing their customer relations.

Identification: The first step is to know the customer's identity - where he/she lives, preferred contact, needs, interactions with the company (criticism, praise, and suggestions) and more. Identification is the prime factor for any beginning of a relationship.

Differentiation: After collecting customers' information, the second step is to differentiate them to understand which ones have a real interest in the business, so that lasting relationships are established. Differentiation should be done between higher value customers and higher potential customers (Boulding, Staelin, Ehret, & Johnston, 2005). At this point, it is essential to actively engage customers with suggestions and complaints to understand their perspectives on the business. It is these manifestations that will guide the actions, that is, anticipate in solutions by the needs of the clients.

The incentive for interaction: After knowing the targets, the next step is to encourage them to interact with the company. For this, the key is to customize the products and services offered to the consumer and offer advantages so that he/she remains interested in the business. Social networks are great tools for the interaction process.

Customization: After gathering information about customer needs, the next step is tailoring and customizing products according to customer needs, so that their shopping experience becomes unique (Gulati & Oldroyd, 2005; Hitt et al., 2014). Therefore, in addition to personalizing, it is relevant to create a feedback loop, so that clients are offered all the benefits they want, when they want and how they expect. This last step requires flexibility, feeling and training of the customer relationship team. It needs to change its behavior and adapt the offer according to each client.

Justification

Loyalty is a consequence of satisfaction and the perception that there is no better offer than the one the company may be offering. A very useful methodology is called IDIP (Identify, Differentiate, Interact and Customize) (Hitt et al., 2014). First, within a good customer relationship management strategy, the company and its employees need to "easily" identify the customers. It is frustrating for a customer to call a company and get transferred from one department to another, and every time the customer has to explain their problem or grievance (Gustafsson, Johnson, & Ross, 2005). With good information, the company needs to "differentiate" customers, segment them to achieve "interaction" in the right way by offering the solution it needs and solving its problem. Finally, the company should "Customize" its offers, so that the customer feels exclusive and well attended, generating satisfaction. In this process, it is very important to manage the customer experience, mapping the interactions with the client, and creating intentional situations that generate satisfaction gains (Payne & Frow, 2005). Among the many benefits of managing customers, relationships include: obtaining quality information quickly to understand and track consumer behavior changes; improving the cost-effectiveness of customer management through automation and process improvement; improving the customer experience when he/she wants to access company information, and improve company profitability and empathy with the customer.

Summary

Of all the marketing actions that influence the success of a company, the main one is undoubtedly the way to manage the relationship with its customers. The basis of CRM is to create a system that allows the company to collect data about customers and use them intelligently to develop customer satisfaction and loyalty. Customer relationship management can be divided into three distinct phases: creating a customer data collection system; Analysis of the data in an integrated way by all the sectors of the company related to the marketing; Development of a system to use this data in a systematic way to optimize the relationship, generating loyalty and new sales to former customers, as well as new customers. Companies can be more competitive by implementing plans to make the relationship and customer service processes more efficient and effective. In addition to analyzing information about the company's processes, it is equally important to analyze the information provided by its clients, which may be relevant to improve processes, products or service.

References

Bolton, R. N., & Tarasi, C. O. (2007). Managing customer relationships. In Review of marketing research (pp. 3-38). Emerald Group Publishing Limited.

Boulding, W., Staelin, R., Ehret, M., & Johnston, W. J. (2005). A customer relationship management roadmap: What is known, potential pitfalls, and where to go. Journal of marketing, 69(4), 155-166.

Gulati, R., & Oldroyd, J. B. (2005). The quest for customer focus. Harvard Business Review, 83(4), 92-101.

Gustafsson, A., Johnson, M. D., & Roos, I. (2005). The effects of customer satisfaction, relationship commitment dimensions, and triggers on customer retention. Journal of marketing, 69(4), 210-218.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. (2014). Strategic Management: Concepts: Competitiveness and Globalization, South-Western College Pub, 11th Edition.

Mithas, S., Krishnan, M. S., & Fornell, C. (2005). Why do customer relationship management applications affect customer satisfaction?. Journal of Marketing, 69(4), 201-209.

Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of marketing, 69(4), 167-176.

Reinartz, W., Krafft, M., & Hoyer, W. D. (2004). The customer relationship management process: Its measurement and impact on performance. Journal of marketing research, 41(3), 293-305.