The current customers are the key to overcoming the current economic downturn. Attracting new customers costs between 6 and 13 times more expensive than the preservation and sale on existing ones. Under normal conditions, companies lose about 50% of existing customers average on every five years, while the difficult attraction of new ones in an environment of shrinking market and financial crisis, imposes to look at this as a cost-effective source of revenue. Effective management of customer relationships is essential in times of crisis and organizations can use customer – oriented strategies and Customer Relationship Management (CRM) tools to maximize the value and loyalty of their customers to open up new opportunities not only for survival but also for development.
Should the customer relationships be managed?
The typical client no longer exist and some companies learned it by the hard way.Until recently, business was more concerned about what sells. In otherwords, companies focused on selling as many products and services without giving importance who buys them. Still, many companies are product-oriented, based on its organizational structure and bonus plans on the products, which they sell, than on customers who buy them.
Modern companies have already changed or plan to change their organizational structure and information from product to customer-oriented, applying reengineering on core business processes and laying the groundwork for transition to the next stage of their development – active management of customer relationships.
If we perform an analysis, we will see that focusing on only 5% of loyal and valuable customers can increase profits by 25% to 70%. This, together with the fact that it costs much more expensive to sell to new customer than to an existing and loyal one, motivates companies to try to maximize their existing customer relationships. Also, dynamic market environment and business conditions make it necessary to take into account the following factors:
– Changed organization of work: In today’s business and corporate structure often professionals working in the departments of marketing, sales and customer service rarely and sometimes never made direct contact with customers. CRM is a business strategy, philosophy and technology that aims to fill this gap.
– Changed business environment: Changed is the behavior of customers and it is not the same as prior years. It is becoming increasingly difficult for companies to operate, meeting the symptoms of “marketing fatigue” in potential customers. The increasing variety of marketing and communication messages to customers, leads to the effect of continuing contraction of the benefits of traditional marketing tools and for the search for new ones.
– The increasing complexity of markets: The increasing globalization leads to the emergence of new competitors that offer completely new products and services.