Why Know Your Customers?
Knowing your customers and their preferences is the easiest way to customer retention.
Why know your customers? Initially, the seller-purchaser relationship was tilted in favor of the seller. This was because competition was less and purchasers had fewer choices. However, the last two decades have seen a consistent power shift. With technological advancement and easy availability of information, the buyer now has an upper hand. If your business doesn’t provide what’s required, a competitor is just around the corner to grab the opportunity.
Customers today have become more demanding and expect innovative solutions. Merely meeting customer needs is not enough. The goal is to exceed their expectations so that they return to do more business with you. Studies have shown that about 80% of a company’s business comes from its existing customers. In such scenario, customer retention assumes increased importance. In order to retain customers and ensure that they do not move on to your competitors, it is essential to understand the customer and customize your product/service offering to suit their interests and needs.
How to get to know your customers better? Businesses today don’t function like the corner shops anymore where there’s face-to-face interaction with the customer everyday. Today, customers may be interacting with the business without the business even knowing about it. A visit by the customer sto the business’s website is an example of one such interaction. The key is to capture such interactions, understand the customers and predict their future behavior based on these interactions and use that to anticipate customer needs before they arise. This way the business will be adopting a customer-centric approach to its offering. Knowing the customers will also help your business to make smart decisions that enhance customer experience. Every decision being made can be looked at from the customer’s point of view. However, for this ideal customer-centric approach to become a reality, it is also essential that the commitment towards customer focus is top-down. Only when the CEO and the Board is committed to customer relations will the other employees believe in the concept. Until your business adopts a proactive approach to customer satisfaction, this would not be easy.
What are the benefits of knowing your customers? Knowing your customers better can help you boost is because once you know what could be of potential interest to the customers, you can cross-sell or up-sell relevant product/service offerings. Also, you can save considerably on costs incurred in acquiring/retaining a customer, since your marketing efforts would now be more focused and yield better results. Improved customer satisfaction and loyalty are some other benefits that will arise.
What are the core requirements in this process? To know your customers and be able to understand them, your business needs to adopt an integrated approach to the whole process. All the functions should be well co-ordinated, especially, marketing and sales. Your marketing strategies should be highly customized, running primarily on customer activities that arise as a part of client interaction. The information gathered from the customers should be stored in such a manner that it can be retrieved in a timely fashion and makes sense to all who would be using it. A good marketing automation software which has analytical functionality can help you with this. Without proper co-ordination between marketing and sales, the efforts put in by the business to know your customers can fail.
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