Almost every company, regardless of size or industry, has a similar underlying goal: to cultivate and grow an engaged, profitable, and loyal customer base. This is easier said than done and the obvious question becomes, “How do I do that?” Strategically, the answer to that question varies, but today technology should play an important role in this process. Properly leveraging a Customer Relationship Management (CRM) system and partnering it with an enterprise Customer Loyalty Management (CLM) system will go a long way towards effectively engaging customers, increasing profitability, and driving customer loyalty, all on a scalable platform that enables personalized experiences on a mass scale.
A CRM system plays a significant role in interacting with potential customers, whether it be through a customer portal on a website or through a mailing campaign managed through CRM. No matter the customer’s preferred channel of interaction, CRM has the ability to play a part. CRM systems use advanced customer segmentation techniques which lead to more personalized communications with higher levels of relevance and timeliness. This improves the first impression a company makes on its customers and increases conversion rates on those campaigns. In addition to increasing the personalization of communications, CRM systems enable organizations to consistently and reliably scale their marketing operations to cater to their growing customer base.
CRM is a highly effective tool for making first contact with a client or for disseminating offers to infrequent customers. However, to appropriately engage active customers many companies decide to offer rewards programs. In order to effectively manage loyalty related transactions and financials, offers, and members, larger companies often implement dedicated CLM systems. These systems (think Epsilon, Aimia, Brierley, and even Oracle Siebel) have been specifically developed to manage loyalty programs and properly engage members.
CRM systems enhance profitability by utilizing the previously mentioned segmentation and targeted marketing strategies to increase a company’s customer base. The more customers; the more purchases and more purchases mean more profits.
The goal of a loyalty program is to maximize the firm’s profits from its most active customers. These systems are designed to process thousands of transactions per second and to award and deduct loyalty points at appropriate rates based on a multitude of business rules. These systems are built to support growth and have the ability manage tens of millions of loyalty accounts. CLM systems incorporate a great deal of financial and member management functionality and operate best when integrated with a firm’s back office financial systems as well as its CRM. The depth of financial functionality allows companies to accurately project and calculate ROI on campaigns, offers, and specific customers – these data driven insights inform better strategies and lead to higher profits.
Driving Customer Loyalty
CRM and CLM systems are also complimentary in the ways they drive customer loyalty.
Effective marketing managed through CRM improves brand image among new customers and conveys the fact that the company understands what its customers need. This demonstration of personal understanding and value alignment drives increased conversion and loyalty among new customers and target markets.
Rewards programs and CLM systems focus on getting customers personally invested in companies and their products. Offering competitive rewards provides an extra return for customers; instead of simply walking out of the store with the product they purchased, they walk out of the store with their purchase and the promise of future benefits (benefits that increase the more that customer interacts with the company). Every purchase increases a customer’s investment, and likelihood of repurchase, with the company.
Here’s the bottom line – there are many different strategies used to drive customer loyalty that range from marketing and pricing strategies to product or service differentiation. But regardless of the strategy, in today’s world, companies must be able to leverage technology to enhance their efforts. CRM is a highly effective tool for reaching new potential customers, enriching brand image and reputation, and growing a company’s customer base. CLM systems, on the other hand, play an important role in making sure that those customers keep coming back. Both technologies also serve as a foundation for growth by providing the ability to manage members, communications, offers, financials, and KPI reporting on an enterprise scale. CRM and CLM systems empower organizations to provide a personal touch to their interactions and a differentiated overall experience for their customers, driving growth in customer loyalty and profits.