To achieve customer retention and growth, there are positive and negative strategies, reward for staying and penalize for exiting respectively. In my experience, the penalties for exiting, such as create exit barriers and enforce contract, generally destroy the trust and comfort. After a period of time or the end of contract, relationship will no longer exist. Just like me and PCCW, it enforces me to sign a new contract for long term and high penalty for termination of service which make me depression. In the contrast, the rewards for staying, such as delight customers and create customer-perceived added value, are much helpful. Just like Pets Central and me, it often provides some sales promotion to me and gives me a membership of its customer club. These strategies delight me frequently and I am more likely to continue our relationship.
According to “Customer Relationship Management: Concepts and Technologies” (Buttle, F. (2009)) and “How do you sustain and grow your customer relationships?” (Terry H. Hill), excellence in CRM should have some criteria. Despite of advertising, sales promotion and membership, there should also include post sales support, staff experience and product innovative which can achieve customer acquisition and retention. They will influence the reputation of companies by word of mouth.
In practical, I am going to use two examples which I have business dealing with them to rate them by the criteria above. They are Dah Sing Bank and Pets Central. Dah Sing Bank is a middle-sized bank. I have opened a personal account in it that I can deposit and exchange stock or application for IPO. I contact with it every day by using e-banking to operate my account and every month by mail or e-mail to receive the statement or advertisement. I expect it can provide reliable service, to be a well capital keeper, and provide higher interest rate or lower trading cost. But, I slightly dissatisfied with the relationship, as the server of e-banking often breaks down, it is inconvenient and possible to cause economic loss since it cannot trade at critical moment. Also, the branches are small generally and less in amount. It causes a relatively long waiting time than other banks due to fewer tellers.
The other company, Pets Central, is a pet clinic. I have a cat, so, I go Pets Central to look for some medical support, such as, drugs prescription and injection. I also use to purchase food in there since those foods are recognized and recommended by veterinarian. I contact with it by Facebook and official website to get news, window shopping or online shopping to refill the food and litter monthly. Also, I take my pet to there for injections yearly. My expectation to it are, well quality medical support, product promotion, responsibility and detail introduction or explanation on drugs, diet and injection. I satisfy with this relationship since it provides well treatment; its staffs are professional, attentive and enthusiastic; there is membership program and announcement of updated news on Facebook. The following is the rating table:
In “Sales promotion”, Dah Sing Bank seldom has some discount or coupons while Pets Central often has that, so, the rating of Bank is lower than Pets Central; In “Post sales support”, Pets Central provides well after-sales service. Its staffs always introduce their products or treatment procedures enthusiastically and phone to customers to follow up the cases actively, while Dah Sing Bank seldom contact with customers actively; In “Staff experience”, all staffs of Pets Central are professional in veterinary, they have specific certificate while not all the workers in Bank are professional in finance, not all the staffs can answer some questions; In “Product innovative”, Dah Sing Bank always has different products, such as, combination of Octopus Card and credit card, new form of loans, while Pets Central seldom has new products; In “Advertising”, we can always watch the advertisements on TV and newspaper while Pets Central seldom put efforts on it; In “Loyalty programs”, Pets Central has membership and often operates different functions for member, while Bank seldom hold events for customers.
In the rating table above, Dah Sing Bank scores less than Pets Central. To improve its CRM system, first, it should communicate with customers more often and actively. For example, it can mail or email birthday card, festivals’ card to customers to delight them. This small activity will warm most people and improve the relationship, but not contact customers to sell “loan” every times. The cost of this relative low if using email, but the efficiency is remarkable. The delighted customers may more willing to use the service of Dah Sing.
Second, it should improve customer loyalty. By doing this, it can implement rewards programs, such as, accumulated points from using credit cards. It encourages customers to use and join the bank’s products. The customers will more likely to continue the relationship with bank for long term.
Third, it should improve the quality of E-banking. The stability of E-banking is essential. It needs to provide reliable service to ensure its professional image. It can put more effort on I.T. department, such as, upgrade its server and hire more specialists to operate the department. Since more customers use and concern I.T. service, bank should know what customers needs and therefore, it is necessary to invest more to develop I.T service. I.T service is a new trend in entire business.
In conclude, according to Mr. Hill, “CRM is the process of tracking and managing all aspects of a company's interaction with its customers, including prospecting, sales, and service”. CRM is an important issue of companies. The performance of CRM affects the profitability directly and Customer Life Cycle(CLC) is the first strategy to select, acquire, retain and growth. To evaluate the Customer Life Cycle performance, we can use some criteria: Sales promotion, Post sales support, Staff experience, Product innovative, Advertising and Loyalty programs. By compare with Dah Sing Bank and Pets Central, Dah Sing Bank’s CLC is needed to be improved.
Reference
Book & article:
How do you sustain and grow your customer relationships? - Terry H. Hill
Customer Relationship Management: Concepts and Technologies - Buttle, F. (2009)
CRM and Customer Life Cycle - Bruce Zhang
Website:
http://www.pets-central.com/
http://www.dahsing.com/tc/html/index.html