CRM's Unfulfilled Promise - why CRM fails at Customer Retention

If CRM is the customer strategy of the decade then why do companies employing the strategy find it so difficult to achieve customer retention? What is to blame for the exodus of loyal customers to competitors? If CRM has so much to offer the organizations employing it why then is customer loyalty a thing of the past?

Answers to the above can most often than not be found in the method of implementation of CRM. There are so many things that can go wrong with a CRM implementation and when any of this occurs, it will but naturally have an impact on customer retention.

Why is Customer Retention crucial to success?

Customer Retention focus is essential to overall business success. Profits can soar and productivity and efficiency increase only when customer retention is achieved. Profits depend on the customer - that is the fundamental truth!!!

Customer Retention is definitely a must for all businesses. Currently there is a plethora of websites, consultants, and companies all willing and eager to offer advice on this much needed asset. There are heaps off theories moving around propounded by various researchers, consultants etc. When companies have the ability to train employees in the correct manner, and employ CRM in the right way, why then do they fail to do what is essential to hold onto their customers? What's going wrong?

Usage of Existing Information

Most companies believe that adopting a CRM project will allow them to establish a better relationship with their customers, monitor their behavior and basically induce them to continue their patronage to the company. Undoubtedly this is happening to a certain degree. Then what's wrong? The fundamental problem with companies is that they continue to work with what they already know about the customer rather than focus on what new information they could learn in an attempt to know the customer better. They are working with existing information in their customer retention strategy rather than looking for new avenues to their biggest asset - their customers.

Reluctant Employees

Raising customer satisfaction involves considerable effort on the part of all employees especially those at the forefront. Does this really happen? Of course not. Employees sometimes due to a lack of adequate training or because they adopt the wrong attitude or have inhibitions, fail to use customer information in the right manner. Most often employees fail to realize the importance and goals of CRM and work in a manner that is in contravention of it. They adopt sore attitudes towards customers and wind up achieving customer desertion rather than customer retention.

Insufficient Attention

Ensuring that the customer has a pleasant experience will go a long way in ensuring his continued patronage. The extra personal touch is what is missing in most organizations today. They are focusing on aspects such as their marketing and sales efforts, cost adherence factors and returns but forgetting the fundamental necessity- that of focusing on the customer and making sure he is satisfied. Companies view this as an unnecessary and sometimes costly or time consuming affair, shirk it and wind up paying the price of watching loyal customers walk away.

What are the most important factors that determine customer retention?

An appropriate and viable business environment, well trained staff, prompt response to customer enquiries and generally making the customer experience a pleasant one. What it implies is the need to have your customers coming back to you again and again.

What efforts can be adopted to increase Customer Retention?

Right from the inception itself there are several efforts any business needs to take in order to ensure that the customer is on its list of priorities. And not just on its list of priorities but one of the very first. It can do this in several ways. For starters a company needs to ask itself several questions like - What information it would like to have about its customers? How it intends to use this information? What is the most productive way to use it so as to benefit the customer? Are there any other ways in which it can make the experience of its customers a better one? Does it have the necessary resources and technology needed to implement CRM? What other resources does it need to increase customer retention?
Customer appreciation is a forgotten task. Despite the fact that engaging in this will go a long way in mitigating customer loss, organizations fail to make it a part of their business process and employees fail to incorporate this in their dealings with the customer. This needs to be done at all stages.
Another failure on the part of businesses in claiming customer loyalty is their inability to educate the customer about the product. Or shall we say reluctance rather than inability? Why do companies hesitate when this effort on their part can undoubtedly go a long way in alleviating their customer retention problems? The hesitance occurs due to the time constraints and cost involved. Businesses believe that if they shirk this duty they will not pay a price. That is a wrong assumption. Attempting to educate the customer about the product will go a long way in bettering the customer experience for him
One of the ways in which organizations can assist their customer loyalty programs is by ensuring that their customers get to share their positive experiences with other customers thereby boosting customer retention.
Customer feedback is fundamental and essential in any attempt to understand the customer and succeed at customer retention. What happens when a company encourages feedback from its customers is that they are equipped with additional customer knowledge and can avail of the valuable suggestions and advice that is got through customer feedback alone. It is the only means by which the company gets to know the exact picture of how customers feel about the enterprise. Efforts towards improvement can only be made after this is had.

It is only through adoption of the right customer practices, coupled with a genuine desire to provide the customer with the best experience possible that CRM's goal of customer retention can be fulfilled in an organization.

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