Statistics have shown that divorce filings slow during a recession and spike as the economy recovers because many couples fear the economic implications of splitting up.
Similarly, many businesses have been focused on surviving the recent economic downturn by generating revenue without paying enough attention to the costs of obtaining and keeping customers.
With the economy perched on a recovery, is it time for you to divorce any of your customers? Customer relationship management (CRM) analytics can help you uncover actionable insightabout the customers who actually may be costing you money to acquire, service and retain.
But how do you know if it’s time to cut your losses and split with a customer?
Cost to acquire: Intuitively, many companies celebrate any new client acquisition as a win, but does that customer’s buying patterns justify the cost to acquire him? CRM analytics can quickly provide your marketing and sales teams actionable insight from disparate data sources that visually illustrates the profitability of a customer.
This customer lifetime value analysis can be used in a wide variety of ways to bolster the bottom line, such as highlighting a certain lead that might not be as attractive as thought on first blush or uncovering unsuccessful marketing campaigns that don’t entice customers to keep buying.
Cost to retain: All customers are not equal. It might be time to fire one of your customers if the cost to maintain his business – through excessive use of your call center or a record of paying late – exceeds the money he spends on your goods or services. With CRM analytics, users can view data by region, warehouse, retail location, sales manager or any other metric that will quickly provide insight into the true value of a customer.
Cost to woo: Measuring marketing tactics can’t be done in a vacuum; they must take into account multiple variables that could be locked in isolated systems. CRM analytics can show a marketing department if its campaigns are paying off. Perhaps a customer hasn’t responded to an email campaign detailing new features to an existing product but maybe he could be ripe for cross-selling from a different product or service line.
Delving deeper into analyzing the issues surrounding an individual client relationship can strengthen your relationship to other customers by revealing insightful gems to predict their future behaviors. Maybe you’ll decide it’s time to split with a number of customers in the same segment. With CRM analytics you can construct a client pyramid, highlighting those clients whose marriage to your firm should last a lifetime to ensure ongoing profitability.
Next Steps:
- Download this complimentary ”5-Minute Guide to CRM Analytics,” and learn how agile analytics technology can deliver critical value to executives and front-line marketers.
- Check out this post “The Role of Advanced Analytics in CRM,” and learn more about the relationship between advanced analytics and CRM.
