Understanding Customers

Customers can be seen as the most important stakeholders in a business. Without customers purchasing goods or services, most businesses would not have a revenue stream. But it can be difficult to shift from realizing this important fact to implementing it in day-to-day business decisions and strategies.

A successful relationship with a customer is based on meeting or even exceeding their needs—determining what problems the customer has and providing solutions, sometimes before the problem occurs. It depends on continually giving the customer a reason to transact with your company above any other.

CRM should not only mean implementing customer-centric processes and consider technology, but embracing customer-driven processes. Through innovations in digital technologies, enhanced customer engagement, and the introduction of mass personalisation, the customer can often drive the business.

Consumer Touchpoints

Consumer touchpoints are all the points at which brands touch consumers' lives during their relationship. This is the starting point for all customer relationship management (CRM)—a brand needs to speak with one voice across all of these touchpoints and deliver a rewarding experience every time it interacts with its customers. Touchpoints can be brand initiated (e.g., a brand sending an email newsletter) or customer initiated (e.g.,the customer making a purchase in a store).

People don't start out as customers; they begin as prospects—people who merely view a business's offering. Once a prospect has expressed interest, CRM can help to convert them into a customer. Some people will always shop on price and need to be converted to loyal customers. Here, brand perception and service are often the differentiators. Consider the prospect who walks into a car dealership and is given outstanding service. In this case, CRM in the form of an aware and trained sales force can help turn a prospect into a customer.

A consumer touchpoint can be as simple as a print or banner ad. It can also be as multifaceted as a conversation between a call centre agent and a customer. It can be a timely tweet, or an outbound email giving the customer details about their account. Even statements and bills are touchpoints that need to be managed carefully to ensure that the brand continues its relationship with the customer successfully.

Customer touchpoints can generally be divided into three spheres or phases.

Prepurchase or pre-usage covers the various ways brands and prospects interact before the prospect decides to conduct business with a company. Here, the brand has several goals:

  • gain customers
  • heighten brand awareness
  • shape brand perceptions to highlight the benefits it offers over competitors
  • indicate how the brand provides value and fulfils the needs and wants of consumers
  • educate consumers about products and services

Purchase or usage covers the touchpoints at which the customer decides to purchase a product, use a service or convert according to set criteria, and initiates the brand-customer relationship. The key goals are to:

  • instill confidence
  • deliver value
  • reinforce the purchase decision
  • heighten brand perceptions

Postpurchase or usage covers all the postsale interactions between the brand and customer. Now, the brand wants to:

  • develop a relationship
  • maximize the customer experience
  • deliver on the brand promise
  • increase brand loyalty
  • remain top of mind
  • invite repeat purchases

Customer Loyalty

The main objective of any CRM strategy should be to gain customer loyalty over the long term. But what is loyalty? This may mean different things for different organizations. Ultimately, it is about acquiring and retaining customers who meet the following criteria:

  • have a projected lifetime value that makes them a valuable prospect to your business
  • buy a variety of your products or use your services repeatedly during their time as a customer
  • share their positive experiences with others
  • provide honest feedback on these products and services, and their experiences
  • collaborate with you on ways to improve their experiences

Licenses and Attributions

Chapter 8: Customer Relationship Management (CRM) from eMarketing: The Essential Guide to Marketing in a Digital World, 5th Edition by Rob Stokes and the Minds of Quirk is available under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported license. © 2008, 2009, 2010, 2011, 2013 Quirk Education Pty (Ltd). UMGC has modified this work and it is available under the original license.