Customer Relationships Could Really Impact Your Bottom line
Customer relationship management, commonly known as CRM, is a way of designing structures and systems so that they are focused on providing consumers with what they want, rather than on what a company wants them to want. It usually involves a restructuring of the company’s IT systems and a reorganisation of its staff.
CRM is heavily dependent on a technique called data warehousing, a way of integrating disparate information about customers from different parts of the organisation and putting it together in one huge IT “warehouse”.
This is contrary to the product-oriented way in which most firms grew up, when divisions and business units were built around products and product groups.
CRM is about putting structures and systems in place that cut across the vertical lines of the traditional firm and focus on individual customers.
Two things in particular brought home to companies the need to take better care of their customers. First, some terrible mistakes were made because of the blinkers imposed by the old product-silo approach
The second thing that drove companies to focus more closely on their customers was a growing awareness that building up profits by aggregating narrow margins from the sale of individual products might not be the best way of ensuring the long-term health of the organisation.
More companies want to regard their customers as customers for life and not just as the one-off purchasers of a product —it is far less expensive to retain an existing customer than it is to acquire a new one.
Why is this especially true in the payments arena? Think of the tremendous data we have associated to a simple credit or debit card alone. We are able to know the customer by:
- Age
- Name
- Location
- Marital status
- Number of children
- Income
- Monthly money spent
- Purchasing behaviour
- Shopped stores
- Purchased items
- Desired foods etc.
This coupled with data mining we are able to identify customers who will buy a specific product with high probability when offered as a result of observed purchase behaviour. This opens the door to any number of new initiatives coupled with working with our retail partners.
All it takes is to have a holistic view of your customer allowing you to be customer focused. Banking is an industry that has high direct access to a customer in other words Customer Interaction is high so why not use that position to apply new initiatives ignoring our own internal silos to both better service our customers with specialized services showing we are proactive with the specific needs of each customer.
Customer’s loyalty and longevity with you will increase when you are able to aim campaigns that are suitable to the needs, lifestyles and desires of your customers.
If you take a look at people in the age group of 18 – 25 and produce tailored products to meet their needs today and in the future you will have a customer until they are the age of 70.