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Ankit Kedia
Australia
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What makes CRM a viable option is the cost dynamics
- The cost of getting a new customer is 4 times the cost of retaining an existing customer.
- 80% of a firm's business comes from 20% of the customers.
Hence the firm should channelise its efforts in retaining this 20% section of customers through its CRM activities. (...) Read more? Sign up for free
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Emiel Veenstra
Business Consultant, Netherlands
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What Makes Customer Relationship Management Viable
Ankit, I completely agree. Although one important factor should not be forgotten: to check whether the customer, even if he is one of the 20%, is profitable.
So, I think this is an element you should add to CRM: Only keep the customers that are profitable.
Therefor the company must have the possibility to calculate the real costs and thus profits per customer.
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Stefania Escobar
Student (University), Colombia
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Viability of Customer Relationship Management (CRM)
I agree too! And one way of estimating customer profitability is the CLV (Customer Lifetime Value) Concept, a good approach to know what will be the expected purchase behavior.
Customer Loyalty Programs look to improve customer retention rate, customer profitability and reduce marketing costs.
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Tracking Works
Manager, United States
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Customer Relationship Management is not Just Signing New Customers
One of the main functions of CRM can be to increas (...)
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