Make it hard for your customers to defect

Did you know that it is much less expensive to sell to existing customers than to recruit new ones? Industry experts estimate that the difference in cost is six fold.

A good CRM program within your company is built on this premise. It can make it "painful" for your customers to leave. Managing customer relationships properly can actually create barriers for customers who might otherwise defect to the competition. It does not matter if your company is large or small. The same principles hold for businesses that are consumer-based and business-based.

Think about your own experiences as a customer. Would it not be a major "pain" to go through the process of educating a new barber/hairstylist or drycleaner about your particular likes and dislikes? The same concept holds true for business-to-business customer preferences, too.

You can take your personal "CRM principles" and apply them to your business. For example, if everyone in your company knows all about a particular customer's requirements (or at least can get access to that information immediately), then your organization becomes indispensable as a provider to that customer. Why would the customer ever leave for a competitor with nothing but a lower price, when he knows that you always deliver the goods exactly as required?

In the online world, Amazon.com is a great example of CRM in action. Over several visits, that company determines that a particular

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customer (you) likes books about technology and CDs of Blues music, for example. Why would the customer switch when he would have to teach those preferences all over again?

With a well-planned and properly implemented CRM project that makes your company indispensable to your customers, you can be your customers' next Amazon.com, no matter what business you are in.

Stephen Brooks is vice president of marketing for MultiActive Software Corp., in Vancouver, B.C. The company (www.multiactive.com) publishes Maximizer, Entice and ecBuilder CRM and e-commerce software solutions.


This was first published in October 2000

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