50MINUTES - Customer Relationship Management: A powerful tool for attracting and retaining customers

• Name: customer relationship management (CRM).
• Uses: CRM is used in businesses and aims to optimise customer service, develop the sales force and provide statistical and customer monitoring tools for the purpose of marketing and data management.
• Why is it successful? CRM allows companies to improve the quality of customer relationships, personalise their offers, monitor relationships, identify opportunities and implement multichannel communication while reducing their effort (in spite of the large number of clients and prospects to manage) and guaranteeing the transmission of client knowledge within the organisation.
• Key words:
  • Attrition : the loss of customers over a given period, measured through the attrition rate; the opposite of retention, which corresponds to the rate of clients conserved over a given period.
  • Customer lifetime value : a prediction of the net profit value expected from a client throughout the entire duration of their relationship with the company.
  • Customer segmentation : the division and classification of customers into homogenous, distinct, profitable and reachable groups.
  • Data mining : all the statistical analysis tools and practices that use data, in particular customer data, to find significant information that can be used to develop marketing campaigns and other activities.
  • Front office : unlike the back office, which is not visible to customers, the front office encompasses all the human and material resources in direct contact with the client.
  • Key performances indicators (KPIs) : key performance indicators are used by management and provide indications about performance and efficiency which measure the results of an activity such as, for example, a marketing campaign.
  • Loyalty marketing : all the actions needed to stimulate and maintain customer relationships.
  • Multichannel : the use of several means of communication between the company and the client, such as direct sales, phone, internet (social media, email, chat programmes, the company website and contact forms), and so on.
  • One-to-one marketing : a type of marketing which contrasts with mass marketing in that it tries to communicate with each client separately to offer them a personalised service.
  • Prospecting : the search for potential customers (prospects) with the aim of turning them into consumers of the goods or service offered.

According to the English entrepreneur and iconic founder of Virgin Group Richard Branson (born in 1950), there are two keys to success: hiring talented people and listening carefully to the customer. This guide will focus on the second of these two vital points.

Customer relationship management, or CRM, refers to all the strategies, tools and techniques that allow companies to track, manage and enrich their relationships with customers (including both current customers and former customers to win back) and prospects.

CRM software has now become virtually indispensable in most large companies. It allows businesses to keep a reliable and precise record of all the exchanges between the company and the customer, which allows them to personalise interactions in an attempt to win customer loyalty, or between the company and the prospect, thanks to integrated segmentation tools. Finally, it can be used in business reporting to produce general statistics and other important figures (such as key performance indicators.

An interesting thing about CRM is that it is traditionally seen as a front-office rather than a back-office tool. Front office, which is used in economic jargon to refer to the visible part of the iceberg, represents the part of the company that customers are aware of: salespeople, sales representatives, cashiers, ticket sellers, and so on. The back office encompasses all the tools and material and human resources of a company that the customers are not directly aware of, such as the accounting and finance departments.