Managing and exceeding customers’ expectations is often the main focus for every business worth its salt. For any business, conversion of raw materials creates value, which is only realizable, if it is recognized by its customers.
Therefore customers are the bread and butter of any business. This is the reason management gurus say that customer value management should be an integrated part of executive strategy formulation; with this, your business can leverage the maximum benefits from its customers.
Theories of marketing, like the 7 P framework, are often used for the marketing of services, but once a customer is acquired, customer management and retention strategies are often neglected by the marketing professionals. Thus sadly it is forgotten that the cost of acquiring a new customer is 6 times more than the cost of managing an existing one. So, consider how you can leverage various forms of customer value for your business.
Customer Lifetime Value Management
It has been recognized that retaining customers is far more cost effective than finding and acquiring a new one. The customer relationship merely begins in the marketing process, but should be nurtured long after.
This can be ensured by continually serving the after-sales servicing needs of the customer; from great customer support to follow up email marketing.
Get some ideas for your follow up marketing here.
Customer Network Value Management
It must be recognized that the bulk of your customers live in a social ecosystem where everyone is connected to a network of other potential customers and competitors. However, network value is realizable only if your customers are satisfied with your company and service.
According to the White House Office of Consumer Affairs, “A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people.” This is the positive aspect of customer network value; a happy customer makes for a valuable brand networker.
Customer Knowledge Management
Today, successful businesses realize that the knowledge residing within customers provides much more than competitive intelligence. This knowledge can be leveraged to design offerings more successfully. Hence, companies like Apple and Samsung are creating history by marketing successful products which cater to the needs of the people, while mammoths like Nokia and Palm are dwindling because they failed to listen to the needs of their customers.
Understanding the pains of your customer goes a long way in creating a business which will actually add value for the customer. At that point, your sales strategy can shift from push to a pull. However, doing so is not easy. Many companies are trying to address this by implementing forums on their websites, encouraging discussions among their customers and listening diligently. However, not only does this improve your relationships with customers, but also provides a much valued intel on what they want.
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Bio: Dr. Arpan Kar (PhD) is a faculty of the globally renowned Indian Institute of Management. He has rich experience in research, training and consulting in e-business, e-commerce, digital marketing, technology marketing and technology enabled supply chain management. He was earlier associated with IBM Research and Cognizant Business Consulting besides handling advisory projects for multiple Fortune 500 MNCs. He regularly blogs at Business Fundas, an educational blog on business management.