Customer relationship management (CRM) is an essential aspect of every business, regardless of its size. Although it is a common practice among large businesses, small and medium-sized businesses (SMBs) should also prioritize CRM. In every marketing book and course, authors emphasize that the cheapest and most efficient way to generate more sales is by acquiring old customers because they already know who you are, and you don't need to spend a lot of money on ads to reach them. However, if you don't do anything to retain them, they will leave you soon, and this is where the concept of Customer Lifetime (CL) comes into play.
Customer Lifetime Value (CLV) is another metric that marketers need to consider. CLV can be estimated by using the average period of purchasing a product or service, the average frequency of purchasing, and the average amount spent. The value of CLV depends on the product, but the most important thing for entrepreneurs is to extend the duration of customers' purchasing and make them spend more money on the business. By focusing on CLV, SMBs can create long-term relationships with their customers, which in turn leads to increased customer satisfaction and loyalty.
One fascinating research finding is that the most impactful factor that makes a person happy in life is relationships. Therefore, creating a relationship with customers can differentiate your business from competitors, especially with the rise of social media, where anyone can be an influencer, including your brand. Social media has revolutionized the way businesses interact with their customers. Social media platforms provide businesses with an opportunity to engage with customers and build a loyal following.
When it comes to social media, there are four types of media: earned, unowned, purchased but unowned, and owned. Owned media is the most important for SMBs because it allows them to have complete control over the customer relationship. Owned media includes mailing lists or databases with direct contact. SMBs can leverage owned media to communicate with customers directly, offer them promotions, and build a relationship with them.
To convert customers into owned media, SMBs can use various approaches such as loyalty programs, member cards, and privilege discounts. These approaches help SMBs collect customer information, such as telephone numbers, email addresses, and social media accounts, which will allow for direct interaction and real growth for the business. SMBs can also use customer relationship management software to manage customer interactions and automate marketing campaigns, making it easier to manage the customer relationship.
CRM is essential for every business, and SMBs should prioritize it to create long-lasting relationships with their customers. By focusing on CLV and leveraging owned media, SMBs can build strong relationships with their customers, increase customer satisfaction and loyalty, and ultimately grow their business.