CRM (Customer Relationship Management) is a fairly generic term which is generally applied to the technology, normally software, used to manage a relationship a company has with a specific customer. Big vendors include salesforce.com, SAP & Oracle.
Traditionally it is largely used by companies in the lead up to a sale; but I argue that this is wrong and isn’t using it properly. A relationship with a customer doesn’t stop once they have purchased an item, it get’s more complicated and more important. Although a business may use a CRM system to get the customer to purchase more items this is usually the start of the relationship, particularly where the products being sold are physical rather than service based.
Once a customer has one of your products if you then “manage the relationship” through after-sales, technical support and warranty it’s far more likely that they will remain a customer. Using your CRM wisely will help you with this.
The prompt for this post was the experience I recently had in The Apple Store in Solihull. My iPhone was playing up, and I booked an appointment with a “genius” (I hate this term) to see what we could do. It turned out my phone was water damaged (yes, ok, I may have dropped it); and this was causing it to behave erratically. In honesty I expected this was the case.
The genius said that obviously this wasn’t covered by warranty. I asked if I could pay to have it repaired and was told they could exchange it for a refurbished, as good as new, unit for circa £150. As I was weighing up the pros and cons of this offer the chap said, “just hold on one minute, let me check the warranty.”
He looked up the serial number on Apple’s CRM system and said: “You’ve not had one replaced before have you; ohh, and I can see you bought a new Mac Book Pro 3 months ago, an iPad about 5 months before that, and a new Apple TV this year too…. it would seem a bit unfair of us to charge a loyal customer for a refurb unit.”
And as a gesture of good will they replaced my damaged and out of warranty phone with a new one; there and then. Clearly I was very very happy with this.
The Cost Of A Customer.
What this shows is that Apple have adopted a good CRM technology solution which shows the relationship they have with an individual customer instantly in a concise form. More importantly, they have given their customer facing staff the authority to use that data wisely. It’s technology + process which equals good CRM.
The employee could see that within the last 12 months I’d spent a considerable amount of money with Apple and that I was a loyal customer; so used this to make a judgement call. Was it worth £150 to Apple to keep me happy? Yes, because the likelihood is that I’ll buy more in the future. I will.
Of course some people will argue that Apple can afford to do this because of the high margin it makes on its hardware; while others will argue that it didn’t cost them £150 as that was the retail price of the refurbed unit, not the cost of it. But it isn’t about the money, it’s about the acknowledgement of a relationship with Apple.
Like all relationships it’s about give and take. I’ll pay their higher hardware prices, live in their walled garden of apps etc, but in return I get cheap OS upgrades and a little bit of love when it comes to my mistakes.
If you’ve got a CRM then make sure you are using it fully, and your staff are allowed to use it properly. If you don’t have one, then get one (don’t be put off by high prices from big boys – small business rarely need all their complexity).