Customer Relationship Management

Customer Relationship Management

Customer Relationship Management, or CRM, is an integration of philosophy and software that caters to customers’ needs. CRM creates a relationship with a customer and ensures that your business is on the top of their mind when the time comes for a purchase. CRM also allows businesses to track their customers. The system calculates their value, their contribution to the bottom line, and ranks them as a desirable, mediocre or undesirable customer.

Some personal examples; my florist has a record of my earlier purchases and the occasion of the purchase. They have my e-mail, and so I receive reminders to send flowers for t holidays and birthdays.  They offer me a choice of selections, and continue to send me reminders up until the last minute, when   I can simply select an item and know that they will take care of delivery. They already have my credit card; so the whole process is seamless. I have never met my florist, but we have a relationship and I don’t even look elsewhere for another florist.

Much of my shopping for home furnishings is done at Bed Bath and Beyond. Each month they send me a voucher for 20% off any one purchase. They also have a no hassle return policy. Why would I go elsewhere?

In the following example, a bicycle retailer in a small American town grew his sales from $50,000 to five million during the time that  Wal Mart, the world’s largest bicycle retailer, arrived in town. Studies have shown that when Wal Mart comes to town, sales for other retailers drop significantly. However, from his CRM system our bicycle retailer learnt that 30% of his customers buy because of price, 30% buy   because of the service and 40% are a bit of both. Knowing that Wal Mart is not known for their great service, this retailer decided to offer exceptional service to those willing to pay for it. In fact, he did not even want to attract customers only willing to pay a low price. He offered a free lifetime service policy, which showed his loyalty and commitment to his customers and of course made them his for life.. His free lifetime service led to the development of a sophisticated customer database, which for example, allowed him to offer children’s bikes when a child reached a specific riding age. Such direct mail marketing had a return of 50%, which is highly unusual.

The issue of loyalty is important and relevant, as corporations on average lose half their customers in five years. Loyalty is actually the absence of a better value alternative (Jim Harris in Blindsided p. 180). We remain loyal to those that provide value. Over time customers become more profitable because they place fewer burdens on the support team. Thus their net worth increases.



  1. Who are your loyal customers? What is keeping them loyal?
  2. Do you treat your most important customers differently from your average customers?>
  3. Do you know the value of your customers, and which ones should be considered   the best and the worst?
  4. Can you offer a cheaper alternative to your worst customers?
  5. What keeps your customers from leaving? What are the costs involved in their leaving?
  6. How can you improve your treatment of your customers   so that they won’t consider leaving i.e. develop their loyalty to your business?



Unique Core Differentiators

Perception is the reality-people buy based on differences They Perceive. It’s the differences that potential customers perceive that make them choose one business over another. And those differences make the customer feel more confident about their final decision as well.

Unique Core Differentiators (UCDs) clearly articulate what makes your business different. They are the special things about your product or service or business that compels customers to buy from you rather than your competitors. Well-formed differentiators target your customer’s ‘hot buttons,’ real buying concerns, or key frustrations. In one statement it educates them about exactly why they should buy from you.

Selling Solutions – Not Products


The best sales people are ‘canned’. They know better than to wing it through a prospect meeting. They have a systemized sales process to work with. And the most effective system is relationship selling – selling based on getting to know a customer’s real needs and fitting your product to them.

Relationship selling doesn’t involve high pressure or manipulative methods. The salesperson here is a problem solver, a helper, and an advisor to the customer. They learn to identify the customer’s needs and sell them a solution that fits the need – not just a product. It moves the emphasis from price to value as a differentiator and provides a powerful advantage over competitors.

Do you know…

How to use objections to further the sales process

How to prepare a sales pitch so that saying ‘yes’ is the next natural thing to do

How to build relationships so strong that your clients won’t think of going anywhere else

Features And Benefits

Your customers are generally only interested in product features that translate into benefits. So, whether you’re developing a new product or exploring a way to repackage an old one, it is important to think clearly about the benefits you provide. Product features are not important in themselves. Great as a product may be, customers won’t love it for its own sake. They’ll only love it for the benefits it provides.

Developing An Extraordinary Guarantee

Guarantees, and especially those that are in some way even better than ‘money back’, are a proven way to attract prospects. But how to develop such a guarantee?

The best thinking on the issue of developing guarantees now involves using the concept of ‘risk reversal’.   There is no better way to change the perceived benefit of a product or service than to offer an ‘extraordinary guarantee’ that switches the risk of making a wrong choice from the buyer to the seller – risk reversal. In effect a risk reversal guarantee inspires the prospects trust by announcing: “I’m so confident in our products, services and business that I’m prepared to put my own money where my mouth is and make it impossible for you to lose out on this transaction.”

By knowing what the customer really wants, and then making it clear that they will get the result they’re after from this deal or else the seller shoulders the consequences, makes their buying decision so much easier.   And that’s what offering an extraordinary guarantee can do.