Customer relations / satisfaction involves meeting or exceeding customer needs and expectations. customer-relationship management (CRM) is a philosophy and process of building and maintaining relationships with customers.
Customer relations and satisfaction begins with knowing what customers want, need, or expect. Most marketers develop a sense of understanding of their customers through experience. With good communications, marketers can often anticipate customers’ needs and wants and, by fulfilling these needs, develop enduring business relationships. Understanding customers can be difficult, especially in new target markets. A common mistake is to assume new customers think and feel the same as past customers. Economic, demographic, and cultural differences, as well as lack of knowledge of a product or service, can lead to different customer expectations.
Effective marketers constantly measure customer satisfaction through SURVEYS, complaints, and employee input. In almost every retail business, customers are offered customer-comment cards. These cards, if they have postage-paid mailing, are usually processed by marketing-research firms, which provide monthly summaries to the client. Some retailers have drop-in boxes at the checkout counter, while others ask customers to just leave their comment cards at their table. Like all market research, obtaining and interpreting information about customer satisfaction (or lack thereof) can be difficult. One restaurant had customers leave their comments at their table. Waiters and waitresses would read the comments and, if they were not complimentary, discard the cards. Some managers may overreact, using one complaint to change policy or procedures. Anyone who has worked in retailing knows it is impossible to please everybody. Market researchers recommend using complaints on customer-comment cards as a signal that there might be a problem.
In addition to customer-comment cards, some companies conduct surveys of their customers, assessing changes in perceptions and expectations. Whether conducted by mail, telephone, or personal interview, customer-satisfaction SURVEYS can provide valuable information to marketers. Armed with information about their customers, companies can develop better FAQ (Frequently Asked Questions) websites and information brochures, train callcenter personnel, and adjust their marketing strategy to better meet customer expectations.
The University of Michigan, along with the American Society of Quality Control, developed the American Customer Satisfaction Index, which tracks customer satisfaction across a broad range of companies, industries, and government agencies. Major companies watch the index and track their ranking relative to other competitors in their industry.
Improving customer satisfaction leads to better relationships. In almost every marketplace it is significantly more expensive to find new customers than retain existing customers. Effective customer-relationship management reduces marketing costs and improves word-of-mouth referrals. One study found that 95 percent of dissatisfied customers do not complain directly to the company but instead, on average, tell 11 friends or acquaintances about their negative experience. Marketers know word-of-mouth is almost always the most important source of promotion. Customer relations and relationship management can directly impact the success of marketing efforts.
With advanced database management techniques in recent years, companies have adopted customer-relationship management strategies. CRM involves using information about customers to better meet and exceed their expectations. In the past, many times different divisions or individuals within a company had information about customers that was not centrally organized or accessible. CRM can tell managers simple things like which of the company’s products and services the customer is already purchasing, leading to opportunities to cross-sell. It can tell marketers when customers have made most of their purchases, allowing predictions of when they will be ready to reorder. It can report which marketing communications and promotional methods customers respond to.
Some companies install CRM technology but do not institute a customer-relationship philosophy. A customerrelationship philosophy involves centering company efforts on the needs of their customers. Together, CRM and a customer focus can lead to enhanced customer satisfaction and retention and profitable business relationships.