Business owners need to move away from simply looking at customer relationship management solutions to customer retention strategies that grow the company. The imperative is not simply one of implementing a new IT customer-centric solution but taking on a business strategy that maximises the return on service investment.
Customer retention strategies include all front office interactions with potential and existing customers, including sales and marketing as well as customer care and help-desk support. Rather than customer relationship management which focuses on managing customer data, a dynamic customer retention strategy allows a firm to grow its revenue among existing customers.
The improving of business efficiencies using IT solutions is key to growth. The coupling of IT with a customer retention strategy provides the next step in looking at an end-to-end solution for front office operations. A customer retention strategy enables a company to better organise, update and use its customer information as well as providing all staff with access to the same customer data to complete their tasks. This improves productivity and does away with the duplication of effort and too many inefficient manual processes.
Yet cost may be a factor and not all organisations can afford the complete integration of their IT infrastructure with a customer retention strategy. There are customer retention solutions on offer that meet the differing budget and business requirements of emerging and growing businesses.
Road less travelled
The high-road offering is the implementation of an end-to-end solution that extends a business` existing IT infrastructure. This type of solution offers user-friendly functionality to drive lead generation, the management of sales, the management of service and support, business intelligence tools as well as the integration with mobile, PDA and PC environments.
No matter the solution chosen by a business, the benefits of a customer retention strategy need to add value to its bottom line.
David Lees, director of End2End Business Solutions.
The middle-road solution would look at installing a customer retention management application that enables a business to work with a single, accurate database of customer records that can be continuously updated and used for sales campaigns and management reporting.
The low-road is a hosted solution. In this case, customer retention management is outsourced to an application service provider who supports a company`s requirements via a Web-base application. The business connects to the Internet to capture and update customer contacts, or draw reports on customer and lead generation data.
Adding value
No matter the solution chosen by a business, the benefits of a customer retention strategy need to add value to its bottom line. The challenge for an IT vendor is to ensure the solution deployed can grow with new business requirements. The question is not about spending more on IT but rather what IT infrastructure is required to grow the firm.
The return on service investment should be easily measured as a company`s service levels improve as a result of the implementation of a customer retention management solution. Business owners have reported their customer retention strategy has played a major role in increasing their turnover.
There is a need to change business owner and staff attitudes to adopting customer retention solutions. Many owners do not understand the concept of customer retention and the fact that it encompasses technology tools, staff training and defining business processes and structures.
Organisations view customer retention programmes as a cost rather than an investment in business. A high level of commitment is required to implement customer-centric solutions which may necessitate change in business processes and staff attitudes. However, many business owners and staff lack the desire to change. In addition, some cost-effective solutions on the market have not been user-friendly and have resulted in low adoption rates among companies.
An attitude change is required among business owners to share information and empower staff. There is a clear need to record all business decisions, sales leads and customer interactions in a system that is easy for staff to use. In relation to the cost of advertising and marketing in the hope of attracting new customers, the investment required to implement a customer retention solution is minimal.
Success factors
Business owners should consider the following to ensure the successful implementation of a customer retention strategy:
* The opportunity cost of growing the business: By how much should it grow as a result of adopting a customer retention strategy? What benchmark will be used to measure how this technology solution will pay itself back?
* The need to ensure customer satisfaction: Does the solution provide business intelligence tools to tap into existing and identify new customer needs?
* The collection of data to determine customer trends: How many customers use e-mail? Why did a customer not respond to an e-mail marketing campaign?
* The adoption of the solution by staff: Is the system easy to use? Does it fit into systems, like MS Outlook, that staff are already using?
* The need for business owners and staff to understanding of benefits of a customer retention management system: Is there commitment from management down to all levels of staff? Does the organisational culture promote a mindset change to adopting new systems and processes?
Fortunately, mindsets seem to be changing and it`s clear that business owners are becoming more and more aware of the need for customer retention strategies to track customer interactions more closely. I truly believe that adopters of customer retention solutions will reap great rewards. Today, the most effective way to differentiate one`s business from another is to sustain high service levels and a key strategy for raising service standards is to implement and monitor a well planned customer retention strategy.
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