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Savvy businesses already understand the myriad benefits that a comprehensive customer relationship management (CRM) system can bring. From collecting accurate customer data to determining the most appropriate information to send to each customer group, CRM technology can ultimately help a business achieve greater profitability by improving the customer experience and increasing loyalty.

However, consumers in the UK are becoming increasingly disillusioned with the perceived poor service they receive from businesses. Rude customer-facing staff and endless waits on the telephone to speak to an operator are driving some customers into the arms of competing businesses.

A recent report by Harris Interactive into customer experience in the UK found that customers would give more business to companies that provided good service. The bottom-line is that to provide good service, it is necessary to build a good relationship with customers. Whilst it may be next to impossible for a medium-sized business to remember the name of every customer through the doors, a business that implements a CRM system that collects and analyses data on recent customer purchases that can then be used to offer discounts on related products or remind the customer of significant dates can begin to build that relationship. 

“Good CRM enables larger organisations to utilise technology to replicate the intimacy of traditional relationships,” says Ray Jones, Head of Communications at the Chartered Institute of Marketing. “Today’s customer wants a tailored experience and ‘one size’ no longer ‘fits all’. The best CRM systems use customer information to guide the consumer to the product that is best suited to their needs, and prompt the development of new lines.”

This strategy has been used to good effect by many larger companies. Supermarket chain Tesco, for example, uses data gathered through its clubcard scheme to help segment its customers. It gathers information about customers purchasing trends and habits and can target them accordingly. The move led to the launch of its highly successful ‘Finest’ range and its white label basics brand. Specific promotional material and tailored discounts are now sent to each customer depending on what category they fall into.

Using the Tesco model, mid-sized businesses can use market segmentation to enhance the customer experience by marketing certain products and anticipating needs based on historic trends. “Just because it may have a smaller number of customers, it does not mean those customers are one homogenous group. Each will have different preferences and behaviours, and these must be considered at all stages of any marketing campaign,” says Jones.

This, in turn, has the knock-on effect of providing a good customer experience and helping to build loyalty to a brand. With CRM technology, the ability to demonstrate personal knowledge of customer needs and wants can encourage a lasting customer relationship.