Customer – definition and meaning

A customer is a person or company that receives, consumes or buys a product or service and can
choose between different goods and suppliers. The main goal of all commercial enterprises is to
attract customers or clients, and make them purchase what they have on sale. They also try to
encourage them to keep coming back. At the core of marketing is having a good
understanding of what the customer needs and values.
UNDERSTANDING THE CUSTOMER:

How can you use CRM to understand your customers?

CRM is used by businesses to help manage their relationships and interactions with their
clients. By using the data you gather on your customers' interests, purchase history,
preferences and more, you can better tailor your products, marketing and services to your
clients' needs.

The three approaches are:

1. Listen. Don’t just ask customers about the experience, listen, as well. There are a lot
of different channels and ways for customers to tell you about their needs and desired
outcomes and how well you are performing against their expectations. Understanding
these expectations and identifying key drivers of a great customer experience are
important outcomes of this exercise.
2. Characterize. Research your customers. Identify the jobs they are trying to do.
Compile key personas that represent the various types of prospects and customers that
(might) buy from you or that use your products or services.
 3. Empathize.( priority) Walk in your customers’ shoes to get a clear understanding of
the steps they take to do whatever job it is they are trying to do with your
organization. Map their journeys to understand the current state of the experience.

How to understand your customers' needs

A thorough understanding of your customers' needs requires analysis. Here are four steps you
can follow to understand your customers' needs and turn this information into actionable results:

1. Create a buyer's personal

To understand your customers' needs, you need to first understand who your customer is. You
can start by crafting a buyer persona, which is a fictional description of your ideal customer,
based on research and your current customer base. It describes the type of person your business
appeals to, including their likely age, gender, location, income and hobbies.

2. Seek feedback from your customers

One of the best ways to understand your customers' needs is by getting feedback from them
directly. You can ask customers what they like about your products, what they dislike and what
they would like to see changed. There are several ways to do this, like sending out surveys,
holding focus groups and tracking discussions across social media.

When asking for feedback from your customers, remember to ask a wide range of questions. Try
to learn more about both their physical and psychological needs. Ask them about how the
product made them feel, along with their experience physically using the product.

As you collect this feedback, compile all the results and implement the suggested changes. You
can then go back to your customers and see if the changes improved their experience. This
process of gathering feedback, implementing changes and reassessing is essential for not only
understanding customer needs but for making good use of the information you receive.
3. Analyze your competitors

Your competitors also play a role in determining your customers' needs and wants. If one of your
major competitors offers a new service or feature, your audience will come to expect this in all
their buying options. For example, if a software company that offers a product similar to your
own offers a 30-day free trial, your audience may expect the same from you.

You can analyze your competition similarly as you gathered feedback from your customers.
Conduct focus groups where you demonstrate the two products side by side, hold interviews with
customers of the other business and track their social mentions. From this, you can learn how
your competition is meeting the needs of your audience and how they could improve, which you
can then use to improve your products.

4. Craft a customer needs statement

With a customer needs statement, you are defining the exact needs of your audience and putting
them into one succinct statement. Use the data you collected in the previous steps to inform the
content of your customer needs statement.

 To craft a useful customer needs statement, there are a few elements to aim for:


 Consistency: Aim for a statement that remains consistent over time. Your buyer's
persona is the same throughout the product development process, so your statement
should be as well. Keeping a consistent needs statement ensures you can establish
methods for reaching those needs.
 Usefulness to the consumer: Your needs statement should describe how your product
will meet a customer's needs better than a competitor. Use the information you gathered
about your competition to describe what you can do better than them.
 Usefulness to your business: Create a needs statement that can help out every
department in your organization. From this statement your marketing team should know
 the best way to promote a product, the product development team should know what
improvements to make and the sales team should know how to best sell the product.
 Clearness and conciseness: Everyone who reads this statement should know exactly
what it is your customers are looking for. Keep the language simple and accurate for the
best results.

What is customer satisfaction in CRM?

Customer satisfaction is defined as a measurement that determines how happy

customers are with a company's products, services, and capabilities. Customer
satisfaction information, including surveys and ratings, can help a company determine
how to best improve or changes its products and services.

CRM in driving customer satisfaction

CRM plays an important role in driving customer satisfaction. Satisfied customers are
profitable to a firm not only because they are likely to make repeat purchases but also
because they promote the firm through words of mouth. Thus, CRM improves the firm’s
market share by bringing in more customers. However, proper implementation of CRM is a
must for customer satisfaction. CRM prescribes that in order to satisfy the customers, first of
all it is important to understand the customers. Customers should be very well understood for
their tastes, attitudes, preferences and decision-making factors. This helps the firms in
identifying their target customers. No firm can ever cater to all the customers satisfactorily
so identification of target market is a pre-requisite.

Customer satisfaction is a measure of how satisfied a customer is with a product, service, or

experience
loyalty crm- meaning

Customer loyalty increases profits, improves sales success and allows for sustainable
growth.

Customer loyalty describes an ongoing emotional relationship between you and your
customer, manifesting itself by how willing a customer is to engage with and repeatedly
purchase from you versus your competitors. Loyalty is the byproduct of a customer's positive
experience with you and works to create trust.

CRM or Customer Relationship Management is a system that helps in collecting, organizing,

and managing the customer information. A loyalty program is a system of structured rewards
given to customers, usually in exchange for desired behaviors, with the goals of increasing
customer loyalty and collecting customer data

What is meant by customer loyalty? - meaning

Customer loyalty is a commitment between a customer and a brand that causes the
customer to make repeat purchases. While customer loyalty may result in strong purchase
preference to a particular brand, the loyalty may not be exclusive. Customers may make repeat
purchases to multiple brands in the same category.

Customer retention( hold) - meaning

Customer retention is the capacity a company has to keep customers engaged with its
product or service. It also acts as a business strategy in customer relationship management that
seeks to increase customer loyalty and reduce customer.

What is customer retention?

Customer retention is a variety of activities aimed at keeping customers for the long term and
turning them into loyal buyers. The end goal is transforming first-time customers into repeat
customers and maximizing their lifetime value (LTV).
customer retention strategies that work

Retaining customers costs less than acquiring them, and both add to your company’s bottom line.
So before you go all-in on tactics designed to get new prospects into your sales pipeline, consider
using one of these 16 research-backed customer retention strategies to grow your revenue by
keeping the customers you already have.

1. Stand for something

Very few customers feel they have relationships with the brands they purchase from and
use.Interestingly, 64% of the consumers who said they have a relationship with a brand cited
shared values as the primary reason for that relationship.

Most people prefer products and companies that resemble them in some way. This cognitive bias
is called implicit egotism and is an important thing to keep in mind.

Customers are more likely to ignore you if your company doesn’t stand for anything. If you want
loyal customers, you need to create real connections with them by letting them know what values
you share.

2. Collect feedback with customer surveys

The best way to find out what customers think about your business is to ask them.
Using customer surveys to collect feedback and diagnose potential dissatisfaction is a great
starting point to understand what needs to be fixed in your overall online experience.

Customers appreciate it when you ask them for their opinion. It means you care and that you’re
ready to go the extra mile to keep them.

3. Capture your product’s momentum

When exciting improvements are being made to your product, everyone in the company feels the
momentum. But do your customers feel the same way?
They won’t unless you take the time to share your work.

Create excitement with current customers by showing them what your latest features will help
them accomplish.

For example, as we prepared to introduce major improvements to our Beacon product in 2018
(such as the addition of live chat), we ran a series of preview posts (like this and this) to generate
excitement about everything customers would be able to accomplish with the new tools.

Not only does this build momentum for upcoming releases, but it also helps promote new
features that existing customers might otherwise miss.

4. Don’t just sell — educate

The last thing you want to do is leave customers to fend for themselves after they’ve signed up.
It’s crucial to offer resources that make it easy for new customers to learn how to use your
product.

There are a lot of different ways to train new customers on how to use your product:

 Offer in-product onboarding with tips and tutorials designed to help new customers get
started.

 Send a series of lifecycle emails designed to guide new customers through the process of
learning how to use your product.

 Provide one-on-one training sessions with customer support, sales, or an onboarding

specialist.

 Create an online academy of training resources for new customers who prefer self-service
training.
  Build a community of product experts that new and long-time customers alike can turn to
when they have questions.

At Help Scout, we offer recurring 45-minute live classes that new customers can register for in
order to learn more about our product and ask any questions they have.

5. Communicate with your customers

Constant communication with customers via their preferred channel is the key to online customer
retention. Today, there are 3.9 billion email users worldwide, and even though social media is
very popular, email is still customers’ preferred communication tool. It’s also the best
performing channel with a reported $44 return on investment for every $1 spent.

Regardless of where you communicate with customers, it’s important to be consistent and to
leverage personalization whenever possible for spot-on relevancy.

6. Leverage personalization

A brand’s success depends on the ability to offer a unique, personalized journey for the
customer. According to Salesforce, “79% of customers are willing to share relevant information
about themselves in exchange for contextualized interactions in which they’re immediately
known and understood.”

Getting customers to create an account is a great way to learn more about them and offer them a
personalized experience that will encourage them to make a purchase from your company.
Another simple way to add a sense of personalization is by using product recommendations
based on customer behavior.

7. Deliver surprise reciprocity

Reciprocity is the social construct that makes the world go ‘round and keeps customers coming
back.
The concept of reciprocity is simple: people respond based on how they’re treated. When
someone is treated nicely, they respond nicely. When they’re treated poorly, they respond
poorly.

It’s no wonder then that consistently good service is one of the biggest drivers of repurchases and
recommendations.

And while reciprocity works incredibly well on its own, research shows it’s far more powerful
when it’s a surprise. Recall a time that someone did something nice for you unexpectedly. The
gesture probably wasn’t all that unusual, but the fact that it came out of nowhere likely left a
strong impression on you.

Brainstorm some ways you can surprise your customers with a kind gesture. For example, at
Help Scout, we occasionally send handwritten notes and swag to our customers just to say thank
you.

Thank-you notes are a rare throwback to old-fashioned, personal customer service; they stand out
as a delightful gesture that makes customers feel special and cared for. The relationship-building
is well worth the relatively minimal investment.

8. Offer fast delivery and easy returns

When it comes to ecommerce, delivery and returns are two of the biggest consumer concerns.
The way you manage last mile delivery can help you stand out from the competition and retain
customers.

However, there will be situations when customers want to return and replace the product.
Simplifying that process will give your customers peace of mind and also encourage them to
come back to your ecommerce store.

9. Find ways to delight your customers consistently

Discounts and freebies are a great way to delight your customers, but they can be costly. Instead
of leaning too heavily on these delighters, you should embrace the art of the frugal wow —
creating reciprocity through small, thoughtful gestures.

In fact, psychologist Norbert Schwarz found that as little as 10 cents can create reciprocity
between two individuals. It really is the thought that counts.

One small way we try to consistently brighten our customers’ days is by building what we call
“huzzah" images into our product — a fun illustration and caption that appears when customers
reach inbox zero.

It may seem like a small thing, but if you can make people feel good about using your product,
they’ll be more likely to stick around.

Another example: in a study from the Journal of Applied Social Psychology, researchers found
that waiters and waitresses could increase their tips by 23 percent through the simple act of
returning to tables with a second set of mints.

10. Provide exceptional customer service

Many companies assume exceptional customer service can only be achieved by going above-
and-beyond — that loyalty is built on showy gestures.

But according to research from Dixon, Toman, and DeLisi published in The Effortless
Experience, the true driver of customer retention and loyalty is the ease of getting a problem
solved.

Delight isn’t the foundation of a customer service strategy; it’s a second-order effect. First, focus
on consistently meeting expectations and avoiding unpleasant surprises. Then go the extra mile.
Here are a few more tips.

 Provide support on the right channel(s). It’s important to make sure you’re providing
support on the channels that make the most sense for your business and your customers.
Hosting companies, for example, know that live chat is critical when their customers’
 sites go down; other companies may have customers who prefer using self-service, or
even phone support.

 Make customer support a communal effort. Countless case studies have made one thing
clear when it comes to creating an efficient support system: you need to keep everybody
in the loop.

11. Accept that speed is secondary to quality

When it comes to highly rated customer service, quality and completeness matter more than
speed.

According to research from Gallup, customers were nine times more likely to be engaged with a
brand when they evaluated the service as “courteous, willing, and helpful." “Speedy" service, on
the other hand, only made customers six times more likely to be satisfied.

Telling your team to spend more time with customers might seem counterintuitive, but numerous
behavioral psychology studies have shown that everyone views their service experience as more
positive when they don’t feel rushed or ignored.

Whether you’re responding to support requests or delivering new features, speed is only
delightful if you’re delivering exactly what your customers need. You’ll do more damage than
good by rushing and delivering something that creates more problems than it solves.

In fact, research conducted by John Goodman found that customers were much more sensitive to
price changes — and thus more likely to churn — when they experienced a few problems with
the product or the support they received.

13. Build your customer loyalty programs the right way

The key to creating loyalty programs that work is to know why customers use them and what
gets customers to keep using them. Luckily, there’s a ton of research on customer loyalty
programs that you can use to set your program up correctly from the start.

 Give loyal customers a head start. Consumer researchers Joseph Nunes and Xavier Dreze
are known for their studies on the Endowed Progress Effect. Their results have
conclusively shown that the biggest pitfall in preventing customer loyalty programs from
succeeding is getting people started. In their well-known car wash study, participants
were twice as likely to finish loyalty cards when they were automatically started (or
rewarded) as soon as they signed up.

 Make ideal customers VIPs. Additional research by Dr. Nunes on retention programs has
shown that people love being VIP or “gold" members. There is one caveat, though — this
only works when people know there is a class below them on the totem pole. Speaking to
human nature, Nunes saw a notable increase in gold members’ participation as soon as he
implemented a silver class.

 Assign your customers positive labels. Research on voting patterns conducted by

Stanford University revealed people are more likely to participate in something if they
are labeled with a positive trait. Buffer refers to their premium customers as “awesome"
members and even named their upgraded payment plan the “Awesome Plan."

14. Turn negative into positive

Being persistent pays off. Don’t give up on customers who leave your website before making a
purchase or subscribing. When using an abandoned cart email, always have in mind that the end
goal is to recover the customer, not the sale.

Another great tactic is to solve customer complaints and turn them into loyal customers.
Staggering data shows that “95% of unsatisfied customers will return to a company if it manages
to solve the issue quickly and efficiently,” so be proactive!
15. Reward your loyal advocates

When your customers go out of their way to recommend your product or service to others, let
them know that you see and appreciate it! If you spot someone recommending your business on
social media, for example, reply to say thanks. It shows you’re paying attention and that their
testimony means something to you.

16. Over deliver on your promises

To wrap up the list, we’ll just say this: Over deliver on your promises. Customer expectations
have hit all-time highs, and the only way to be competitive is to be willing to go above and
beyond to create the best online shopping experience. That is the only way to keep customers
coming back for more.

Relationship economics economics meaning

Management Summary Customer relationship management (CRM) is an enterprise business

strategy designed to optimize profitability, revenue and customer satisfaction by organizing the
enterprise around customer segments, fostering customer-satisfying behaviors and linking
processes from customers through suppliers.

CRM requires a large investment in technology, labor resources, consulting services and
training. Many enterprises now use CRM total cost of ownership (TCO) and factor in business
benefits to build a compelling return on investment (ROI)-based project justification.
Relationship economics
Leaky bucket
theory
Relationship portfolio