What is the most effective way to manage key customers? How to improve the loyalty of key customers?

1. Definition of customer loyalty

Customer loyalty is a concept derived from the concept of customer satisfaction. It refers to the trust in a certain product brand or company that results from customer satisfaction. A psychological tendency to maintain, maintain and hope for repeat purchases. Customer loyalty is actually the continuity of customer behavior. Customer loyalty refers to the degree to which customers are loyal to an enterprise. Customer loyalty manifests itself in two forms, one is the customer's willingness to be loyal to the enterprise; the other is the customer's behavior of being loyal to the enterprise. General enterprises often easily confuse these two forms. In fact, there is an essential difference between the two. The former does not generate direct value for the enterprise itself, while the latter is of great value to the enterprise. The reason is simple. , customers only have wishes but no actions, which is meaningless to the enterprise. What enterprises need to do is, first, to promote the degree of conversion of customers from "will" to "behavior"; second, to further increase the frequency of transactions between customers and enterprises through cross-selling and up-selling.

2. Comparison of customer satisfaction, customer loyalty and customer profitability

The relationship between customer satisfaction and customer loyalty is relatively close. Generally speaking, only customers are When the level of satisfaction of the company reaches a certain level, customers will be willing to be loyal to the company; when this level of satisfaction is further improved, customers will become loyal to the company. On the other hand, if a company improves customer satisfaction but does not change customer loyalty, then this improvement in customer satisfaction is meaningless.

CRM vendors and the industry generally believe that as long as they win the loyalty of customers, companies will be "rich in money"; therefore, companies' expenditures on cultivating customer loyalty are gradually increasing. Because on the surface, it seems that the higher the customer satisfaction, customer loyalty and customer retention, the greater the customer profit contribution. But the reality is not what they expected. The latest paper in the Harvard Business Review shows that the correlation between customer satisfaction, customer loyalty and customer profit contribution is much smaller than expected. Enterprises should further segment loyal customers, then classify and manage them based on more detailed customers, and take corresponding countermeasures. In the paper, the author conducted an in-depth segmentation of loyal customers based on the two dimensions of profit contribution and short-term and long-term customers. Mainly divided into four categories: "Butterfly", "Friend", "Stranger", and "Mysterious One". Enterprises should take corresponding countermeasures according to each type of situation. The key to managing those butterflies of profitable but disloyal customers is to make as much profit from them as possible when they shop. It is more appropriate to take good care of those "best friends" who are both profitable and loyal customers. As for those "barnacles" of loyal but unprofitable customers, what you need to do is determine whether they have the potential to increase consumption. Finally, for "strangers" who are neither loyal nor profitable customers, the answer is of course simple: identify them early and make no investment in them.

3. How do companies improve customer loyalty?

Every manager is faced with the reality that product differences are getting smaller and smaller, and promotion methods are similar, but competitors are becoming more and more competitive. More and more are coming, and customers are becoming more and more discerning. How can companies survive in this environment? However, the fundamentals remain true, and the driving force for a company's stable development is nothing more than three points: operational efficiency, market share and customer retention. The two key issues that CRM needs to solve are: increasing market share and increasing customer retention. The solutions to these two problems still need to be focused on one core issue, the maintenance and improvement of customer loyalty. The important factors that stimulate customers' loyalty to the enterprise mainly include: intrinsic value, transaction costs, interaction between various stakeholders, and social or emotional commitment. However, just by possessing these qualities, a company may not necessarily be able to obtain too many highly loyal customers, because the company must first have a "customer-centric" culture and reflect this culture into the business processes of each business department of the company. middle.

So, the question now is how much investment should companies invest in cultivating customer loyalty to achieve the most economic benefits? Enterprises are facing a common problem: how to improve customer loyalty? Below we will summarize some strategies and methods that are often used in the process of cultivating customer loyalty, for your reference only!

Build employee loyalty

It is an indisputable fact: companies with high levels of customer loyalty generally also have high employee loyalty. If a company has a very high employee turnover rate, it is simply impossible for the company to gain high customer loyalty; because customers obtain products/services through contact with employees. Therefore, the core principle of customer loyalty is: first serve your employees well, and only then can you serve your customers well.

Determine customer value orientation

To improve customer loyalty, we must first know what factors will affect customer orientation. Customer orientation usually depends on three aspects: value, system and people. When customers feel that a product or service is lacking in quality, quantity, reliability, or "fitness," they usually focus on value orientation.

Expected value is affected by the cost of the good or service, and the expected value is different for low-cost and higher-cost goods. But when the quality of the core product falls below expectations, they will consider it against price.

Practice the 80/20 principle

Companies should apply the 80/20 rule when implementing customer loyalty programs. To sum up, 80% of a company's revenue comes from 20% of its customers. All customers are not equally valuable to a business; some of them bring long-term value to the company. Smart companies should be able to track customers, segment them, and provide targeted products and services based on their value. Therefore, when we implement customer loyalty programs, we should focus on 20% to 30% of high-value customers, but at the same time we should consider customers with some valuable potential and adopt corresponding strategies. Let customers recognize "value for money"

Only by maintaining a stable customer base can the brand win huge profit margins. However, when businesses use "discounts" and "promotions" as the only means to pursue customers, "price cuts" will only cause companies and brands to lose their most loyal "customer base." Promotions and price reductions cannot improve customer loyalty, and "price wars" can only bring more and more customers with "no loyalty at all" to the brand; when merchants and enterprises seek their own development and high When profits increase, these customers will surely be lost. To cultivate a loyal customer base, we should not only achieve "cheap and good quality", but also let customers understand that this product is "value for money". Due to "business homogeneity", companies can only truly cultivate their own "loyal customer base" by segmenting product positioning, seeking differentiated operations, and identifying the value orientation and spending power of target customers.

Determine ways to improve customer loyalty based on the current situation

Customer loyalty to the company will inevitably be in a state. Therefore, companies can clearly understand how to understand the current status of customers. Only then can we enhance customer loyalty. Generally speaking, customer loyalty can be divided into five stages: suspicion, expectation, first-time purchase customers, repeat purchase customers, and brand promotion customers. If your customer relationship building and maintenance processes aren't ensuring customer loyalty, it's time to reconsider.

Service first, sales second

In an era of rising consumer awareness, good customer service is the best way to build customer loyalty. Including service attitude, speed of responding to customer needs or complaints, return and exchange services, etc., so that customers can clearly understand the content of the service and how to obtain the service. Because today's customers are becoming more and more picky and will be very "sensitive" after purchasing a product, they want to be able to get enough pleasure and minimize trouble when dealing with companies. When these customers get a good customer service (great service) experience, they will naturally form a "second purchase"; however, if they get a bad experience, they will tell more people around them Publicize their "misfortune". Therefore, if companies want to improve customer experience, they must provide product-related services, and then they can actually sell products.

Resolving customer complaints

For most companies, only 10% of customer complaints have the opportunity to express clearly to the company; and the remaining 90% are customers who have no chance. Expressed to the company, these complaints can only be reflected in some behaviors, such as defaulting on the company's accounts payable, not being polite to front-line customer service personnel, etc. And, thanks to the Internet, the unhappy customer can easily make her feelings known to thousands of people. Therefore, companies must quickly resolve this unpleasant incident before it happens, try to give customers an opportunity to express their complaints, give them the opportunity to express their unhappiness, and at the same time try to solve these unsatisfactory problems. Companies can set company guidelines based on customer response time and customer trend analysis. Abroad, "employee complaint monitoring" is an important tool used by senior management for decision-making. Furthermore, the harm caused by poor service is obvious. Redressing the impact of this harm should be viewed as an opportunity rather than just a painful routine. When we resolve customer complaints, we start from two aspects. One is to provide convenience for customer complaints, and the other is to handle these complaints quickly and effectively.

Obtaining and retaining customer feedback

Research shows that customer feedback is closely related to customer perceptions of quality service. The advent of the Internet has changed how customers perceive feedback. Gradually, customers begin to expect companies to receive a full 24-hour service. Moreover, today's customers are accustomed to visiting websites and expect to get answers to their questions online. Some of the latest technological tools, such as Web-based self-service, email management, chat/Webcallback, have gradually become one of the key applications of the company's customer service department.

Know the definition of customer value

The "Customer Loyalty Code" is very valuable. Knowing your customers' value orientation is very important to building high customer loyalty. However, it is not easy for a company to truly know the definition of customer value, because the definition of customer value is constantly changing.

Investing in customer loyalty research helps companies understand "how much value they can bring to customers."

Proactively provide new information that customers are interested in

One-to-one personalized service has become a trend. For example, you can design a program to ask customers to fill in the topics they are most interested in. , or design a program to automatically analyze the customer database to find the topics that customers are most interested in. When there are new products in this area, we proactively notify customers and add letters of recommendation, which will definitely give customers a different personalized service experience.

Do a good job in customer regeneration

Research scholars have found that the success rate of selling products to a lost customer is twice that of selling to a new customer. At many companies, recovering lost customers is often the most overlooked revenue-increasing strategy. Under normal circumstances, companies lose an average of 20% to 40% of their customers every year; therefore, companies not only need to establish customer acquisition and customer retention strategies, but also need to establish a "customer regeneration" strategy. Because no company can achieve 100% customer retention, every company needs to reacquire these high-value customers that have been lost.

Use multiple service channels for the same customer

Researchers’ research shows that customers who contact the company through multiple channels are significantly more loyal than those who contact the company through a single channel. client. However, the premise of this conclusion is that customers can get the same service by entering a physical store, logging into the website or calling the call center. In order to achieve this kind of multi-channel product delivery and product services, companies must be able to integrate resources and information from these multiple channels. Only in this way can they clearly know which channels customers prefer when and no matter what channel they use. Channels, enterprise-related personnel who are in contact with customers can obtain unified information related to customers. The fickleness and personalized pursuit of customers force our companies to change channels; otherwise, customers will only flow to competitors. In addition, companies should establish multiple layers of connections with customers. The knowledge that an enterprise has in contact with customers should never come from a single contact such as customer service staff. This narrow contact will make the enterprise prone to information distortion and inaccurate judgments, and this trust relationship is very difficult. Vulnerable, opening the door to competitors when connections change. Ideally, there are multiple layers of connections between customers and businesses, and information from multiple layers of connections can be integrated.

4. How companies use CRM to enhance customer loyalty

How to judge that customers are loyal to a company can be observed from the following five aspects: Loyal customers frequently and repeatedly purchase from the company Products or services, the company can even quantitatively analyze their purchase frequency; loyal customers are willing to provide references to the company and products, or often make verbal suggestions, and can actively and positively advise the company on how to improve product quality and service levels. Suggestions: loyal customers have diverse choices when purchasing products/services, and they pay more attention to new products or services provided by the company; loyal customers are very happy to recommend the company's products/services to others; loyal customers will reject the company competitors.

As a customer relationship management (CRM) idea and method that has been used more recently, how does it play a role in improving an enterprise's customer loyalty? Below we will analyze it from several aspects.

Give "frontline employees" sufficient operating skills

For most companies, the frontline employees are field sales personnel and service personnel, as well as customer service personnel in call centers. These frontline employees will have direct contact with customers. So the impression they leave on their customers will be very profound. It can be said that these front-line employees are the company's future "loyal warriors." Moreover, the integration of multiple channels (including telephone, email, fax, etc.) in call centers has also become a development trend. The famous research company Gartner predicts that by 2005, 70% of North American call centers will be replaced by multi-channel contact centers. The integration of multiple channels poses higher challenges to customer service personnel.

Collaborate with channel partners

In today's complex marketplace, companies often rely on many partners to collaborate to serve their customers. Through the construction and maintenance of supply chain relationships, customers' loyalty to the company can be further enhanced, and customers will be difficult to lose to competitors. For example, a European car manufacturer inputs its customer database into a system that can be shared by all channel partners; in this way, the car manufacturer can build more stable customers through distributors/channel partners. Relationships, that is to say, companies can adopt corresponding strategies to let other manufacturers in the supply chain assist the company in building and maintaining customer relationships.

Storing data in a central database

Many companies lack a 360-degree view of their customers because they do not have a central database.

The financial department, sales department and customer service center may all have their own databases, but these customer databases are very different. The same customer may store different information in these databases because the customer content that different departments care about is different. Same. These information islands can easily cause different departments to send different information to the same customer on the same issue, which can easily lead to customer dissatisfaction, even disgust, and even churn. Because in order to effectively implement a customer loyalty strategy, customer data across all touchpoints must be able to be integrated.

Create a customer-centric culture

Let customers and employees know that the company cares about them. What companies focus on is how to do the best for customers and employees and how to win their loyalty. If the company can do this, customers will buy or use the company's products and services more often and in greater numbers, and the company will make more profits from them. Promoting a "customer-centric" culture in the company not only requires our marketing, sales and service departments to establish "customer-centric" business processes, but also requires other departments of the company to actively respond to changes in customer needs and establish a true sense of all departments All operations are "customer-centric"; and if the downstream of the internal upstream and downstream processes are regarded as customers, the company should establish a more perfect customer-oriented plan and mechanism.

Establish a process for cultivating and improving customer loyalty

In order to continuously increase the number of loyal customers and improve customer loyalty, companies should establish a standardized process for cultivating and improving customer loyalty. process. Let employees in all departments of the enterprise realize the importance of customer loyalty and know how to cultivate and enhance customer loyalty. At the same time, companies should be able to scientifically evaluate customer loyalty and churn rates, and be able to evaluate customer lifetime value or customer lifetime profit margins. Only with systems and regulations, evaluation methods, and continuous improvement methods in place can an enterprise's customer loyalty program be implemented and promoted in a standardized manner.

Achieve "one-on-one" service

If an enterprise wants to win higher customer loyalty and profitability, it must achieve the following goals: at the right time, at the right price , Provide the right products (or services) to the right customers through the right channels. In the new social environment, customers' needs are constantly changing, and they are beginning to pursue a unique product and service enjoyment. The "one-to-one marketing" and "one-to-one enterprise" that have recently been advocated abroad are precisely products to meet the new needs of customers. What many companies currently lack is personalized products or services. If a company can create a personalized profile for each customer, it can provide personalized services to each customer. However, for many companies, it is really difficult to truly achieve this kind of "one-to-one" service. We can think about it in another way. In order to realize the transition from "one-to-many" to "one-to-one", we first establish a "one-to-class" approach. The idea of ??this method is to mine and analyze customer information based on the CRM function, and then classify these customers according to some established standards (such as income, personal preferences, etc.) and some cluster analysis methods. , and then provide corresponding products or services to the classified customers. This can not only relieve the cost pressure of providing "one-to-one" services to customers, but also provide customers with a certain degree of personalized services.

Think about what customers want in the future

After companies implement CRM, they need to manage the overall data and information of customers, including customers’ geographical location, family member status, customer profit contribution rate, and transaction channels. Preference, lifetime value and other factors. Then segment the customers according to their different information to provide a "personalized" customized service; more importantly, CRM can help you predict the future. It is not enough to just "think what customers want"; We should "think about what our customers want in the future". The predictive model established in CRM can help the company's marketing department formulate more accurate market strategies and launch more successful market offensives through surveys of customers and market changes. Usually, the establishment of a predictive model requires the use of a variety of statistical tools to explain customer behavior and predict future customer and market trends to truly "think what customers will think in the future." In addition, this kind of prediction of customer behavior can also help tap the potential value of customers. Above we mainly analyzed how companies can cultivate, maintain and enhance customer loyalty. One of the most important tasks for enterprises to apply CRM is to increase the proportion of loyal customers among all customers, increase the loyalty of satisfied customers, and increase the profit contribution of loyal customers.