Tips for Cost-Effective Customer Retention Management

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TMVendor Guru
Tips for Cost-Effective Customer
Retention Managementby Gina PogolTable of Contents
Executive Summary....................................................................................................... 3
Introduction.................................................................................................................
Customer Loyalty Doesn't Have to be Expensive................................................................ 4
1. What does a new customer cost? ................................................................................. 52. Creating loyal customers cost less and adds more value.................................................. 53. Profiling Existing Customers Helps To Find Better Customers............................................ 5
Balancing Retention vs. Acquisition.................................................................................. 6
Affordable Solutions....................................................................................................... 6
Identifying The Most Cost Effective CRM Solution For Your Organization................................ 7
Conclusion.................................................................................................................... 8
About the Author........................................................................................................... 8
Sources....................................................................................................................... 8
© 2007 VendorGuru.com. All rights reserved. www.VendorGuru.com Page: 1Executive Summary
Customer Relationship Management (CRM) is a concept as old as trade itself. Keeping customers apprised of new products, remembering their likes and dislikes, promptly resolving issues, and giving them chances to vent and offer feedback are customer-centric concepts that were probably used by the best iterant peddlers of the dark ages. The major difference between doing business years ago and today is the speed at which we not only can service our customers, but the speed with which our customers expect to be serviced.
Customers today are much more demanding in their expectations of how they are serviced and the levels of service they will get. More often than not, a level playing field between many businesses means the only real differentiation and competitive advantages we can develop and sustain will be the relationships we forge with our customers. Many good businesses have made the mistake of assuming that they don't have the advantages of knowing their clientele personally because of the rapid pace at which we do business today and the driving force to sell sell sell.
The truth of the matter is that with the right tools and business processes in place, it becomes quite easy to gather the customer details needed to easily develop and maintain those precious relationships with our clients that ultimately translate into key differentiation and competitive advantage. It's been highly documented over the years that it costs between 6 and 10 times more to acquire a new customer than it is to retain an existing one, and by implementing a solid CRM solution and work processes that leverage it, your business can continue to grow from within.
Today we have an abundance of CRM solutions to choose from. Some are relatively inexpensive and lack some key functionality, while others require huge investments in time, planning, resources and money. These larger solutions are often overkill for all but the largest of enterprises and so it becomes a challenge to strike the right balance between a cost effective solution that delivers the desired results and throwing away time, money and resources.
A truly cost effective CRM solution that will serve a large majority of businesses does not need to include sophisticated telephony functionality, screen pops, and call management. Unless your organization is a major call center and your business is that of telephone support, these features would be an unnecessary investment. There are many other components to large CRM systems that add costs yet will go unused by most organizations, and knowing which features to trim and which to keep will allow you to deploy a cost effective solution that will serve all of your customers nee... [download for more]