CRM and BSC
Customer centricity has become the core strategy of every business these days. It starts long ago before a company’s foundation is laid as every business is launched by identifying the group of people whose needs and wants the business is going to cater. Then what product or service to provide, do customers really want to buy it, how the company’s offering can create maximum value for money its customers pay for the product or service, how to sell it to potential customers, how to retain customers over a long period of time, how to design strategies and promotions to constantly keep them coming to you and how to bring them to a level where they are not only willing to purchase your product but also refuse to purchase the product offered by your competitor in case they do not get your product – all this is what defines business scenarios these days.
As the markets saturate, more and more companies compete for same share of wallet of customer. This forces every business to come up with some unique selling proposition besides the standard set of attributes for which the customer is paying primarily. This is where comes the role of customer relationship management that aims at identifying the loyal customers with high life time value and building long lasting relations with them. Effective CRM can retain company loyal customer with high return paying attention to their needs and wants, identifying and filling the gaps between what the customer desires for and what the company is providing and crafting promotional strategies providing a rewarding experience to customer. And that is the stage where the customers become partners of the business and not only do business with the company for long period of time but also advertise on its behalf spreading favorable word of mouth.
The important thing in this regard is that a company evaluates CRM activities on constant basis in order to keep a track of its progress in winning the share of mind and wallet of the customers. A balance scorecard approach can do the magic when used to measure the effectiveness of CRM activities of a business. BSC metric make use of key performance indicators of customer relationship management. These indicators include customer’s life time value, number of satisfied customers, number of dissatisfied customers, customer retention ratio, market segmentation, market penetration, extent to which a company provides personalization, sales force behavior, complaints and feedback etc. These factors are evaluated by setting quantifiable goals against each indicator and then constantly monitoring the effectiveness of CRM in pursuing these goals. Evaluating these measures gives a clear insight into the CRM strategies and tactics that how successful a company is in delighting its most important stakeholder – the customer.
