Today’s consumers are more value conscious, price driven and much, much more demanding than in the past. Most companies have realized that it is more efficient and profitable to keep old customers than to win new ones. This has given rise to what is known as Customer Relationship Marketing or CRM.

This is not a new strategy. Before supermarket chains drove small businesses out of business, neighborhood store owners probably knew all of their customers. They knew you, they knew what you liked, and they could recommend products based on this.

Then came mass production and with it, the disappearance of the direct relationship between customer and producer. Products began appearing on shelves that consumers neither knew nor trusted. Marketers realized they had to change something in the way products were sold, and thus brands were born. Here was a means of providing consumers with the assurance of consistent quality. But as the market became saturated again, with hundreds of new product introductions every year, brand names were no longer enough to differentiate products.

Thus, CRM was back in vogue as marketers began to realize several facts. Some of these are listed below:

• When you lose a customer, you lose their lifetime value.
• A 5% increase in customer loyalty will result in a profit increase of more than 25%.
• In almost every industry, 20% of the customers account for 80% of the profits.
• Seven out of ten clients go to the competition due to bad services.
• It takes up to twelve good experiences to overcome one bad customer experience.

With the rise of computers and the Internet, consumers are much better informed and less susceptible to easy manipulation. This made marketers realize that a shift in emphasis is needed from transaction-based marketing, i.e., a one-time deal, to relationship marketing where long-term, mutually satisfying relationships are built with consumers to win and win. retain your business in the long term.

In other words, instead of trying to maximize profit from each and every transaction, relationship marketing focuses on maximizing profit on customer lifetime value by building and maintaining relationships. Therefore, it reduces transaction costs and time.

Most of the companies that use CRM as a marketing strategy implement it with CRM software. This software can be very expensive, not only because of the cost of the software, but also because of the training required to familiarize employees with it. However, this money spent usually does not translate into better benefits. The reason for this is fundamental and overlooked by most companies. They assume that technology alone will solve their customer retention problems and lack clear goals for their CRM implementation.

The solution is not always simple. You need to understand that using CRM effectively doesn’t just mean restructuring your sales and marketing departments. Instead, you should view CRM as an integrated business strategy that places consumers squarely at the center of your organization’s consciousness. For small businesses, big, expensive and complicated CRM software is usually not the answer.

Instead, you need to focus on building relationships with your customer base and building loyalty. You should also encourage collaboration with consumers, asking them to give feedback on your product or changes they would appreciate. This makes the customer feel that they have contributed to the product and makes them more likely to buy it.

One software I would recommend for managing your clients is Tree.io (http://www.tree.io). With this affordable software, you can not only control all aspects of your CRM strategy, but you can also manage all other aspects of your business. also. As a bonus, its intuitive interface means that it requires little training to be used effectively.

I hope you enjoyed this article and feel free to add comments or suggestions below.