The following areas represent the process of CRM and can be presented in the form of cycle (Figure1). The complete CRM cycle is responsible for customer retention and profit maximisation.
Acquisition: Acquiring potential customers is the most essential step of customer relationship management. The process of acquisition encompasses five major stages, viz., enquiry, interaction, exchange, coordination, and adoption. Each Stage performs an important role in the process Of acquisition. In the enquiry Stage, different organisational aspects including nature of organisation, product, transaction methods, etc., are enquired by the potential customers. This enquiry will result in the interaction of the customers with the organisation (interaction stage). Next is the exchange stage, in which different exchange related aspects like mode of delivery, terms and conditions of exchange, etc., are determined. Later, in the co-ordination stage, both the customer and the organisation exhibit the co-ordinated effort and the organisational products and services are adopted by the Customer (adaptation stage).
Customer Interaction Management (CIM): Building customer relationships is not possible without focusing on the interaction between the customers and the organisation. CIM encompasses combination of customer relationship technologies and technology-centric interactive solutions. CIM is based on interactive communications related to potential customers enabled through available channels of interaction. This further supports the development of customer relations. With the emerging change in technologies, communication through message, content, media, accuracy, speed, distance, reach, repetition, etc., plays a very crucial role in supporting the CINI.
CIM covers these routes:
- Online Routes: These routes consist of e-mails, chat rooms, web communities, etc.
- Offline Routes: These routes consist of television network, telephone, fax, mails.
- Outsourcing: CIM can be implemented by outsourcing, i.e., indulging a third party having expertise in CIM.
The effective interaction of the organisation with their potential is the result of effective CIM. Based on customer segment, service needed and the channels utilised, these interactions must be regular and also modified as per the customer requirements.
Customer Retention: The main concern of the organisation is retention of acquired customers for longer period. The process Of effectively accomplishing the customer requirements, and thus, going beyond their expectations, so as to keep them in the customer inventory Of the organisation for longer period, is called customer retention. Thus through customer retention. an ordinary customer is transformed into loyal customer. In modern business, customer retention plays a vital role in building customer relationship. In selling organisations, number of defected customers is reduced With the help Of customer retention strategy. Making first contact with the customer and developing relationship with him/her, which lasts for lifetime, is the characteristic of a good customer retention strategy. Customer retention not only involves satisfying the customers, rather it Inculcates satisfying customers beyond their expectations so as to convert them in loyal supporters of the brand/organisations. Therefore, business strategy of the organisation is more inclined towards ‘customer value’ rather than shareholder value or profit maximisation, for developing customer loyalty.
Attrition: The next phenornenon occurring in CRM after the retention is attrition, which involves gradual destruction of the Customer loyalty. This Stage encompasses the queries that Customers have, about their returns and benefits from long-run relationship with the organisation. Avoiding the early attrition arising from customers, may lead to defection of customers. Hence, the organisations should be capable of identifying the attrition signs so that appropriate precautions can be enforced. Following are some Of the attrition signs that the organisations must recognise:
- Decreasing frequencies Of contacts,
- Increasing complaints,
- Decreasing enquiries,
- Decreased communication
- Decreasing number of active buyers, and
- Decreasing business volume.
Defection: Customer defection refers to the process of discontinuation of purchase by an unhappy customer which ultimately means losing a business. In case, when the organisation is not able to provide required products (services) to the customer as per his/her need, the unhappy customer switches to another alternative and discontinues the purchases from earlier organisation, resulting in defection. Thus, the customer defection acts as a threat to the organisation. Hence, the attrition signals should be timely recognised by the organisations. If these signs are not identified at the earliest, the customer will become dissatisfied and will move on to other available alternatives in the market. In that case, the organisations must try to regain the lost customer loyalty by designing re-acquisitioning strategies.