CRM for small business - The importance of meeting the customer's needs

Whilst pricing strategy is still vital it is increasingly difficult to compete on the basis of price alone, and in the face of increasing competition, mature markets and the ever-demanding customer, treating existing customers well is the best source of profitable and sustainable revenue growth.

A successful customer relationship management helps businesses to gain an insight into the behavior of their customers and modify their business operations to ensure that customers are served in the best possible way. When setting up a CRM strategy it is important to tailor it to be relevant to the business involved, it is not a case of one strategy being suitable for all.

How CRM affects marketing behaviour

Part of the strategy is to determine how CRM decisions will affect marketing behavior. Now-a-days marketers are moving from customer acquisition with heavy doses of mass marketing and price-orientated promotions to customers and channel members, to customer retention, which requires new and different methods which will be discussed later. The reasoning behind this transition is that there is a dramatic increase in profits from small increases in customer retention rates.

With the decline of mass-media advertising, marketers are focusing on customer relationship management as the best way to win, retain and grow business. Organisations are unable to reach the same number of people or the audience they are intending to target as they did in the past through a single medium.

Therefore, organisations are having to implement more select methods and channels to reach their varied customer segments.

Some organisations are adopting customer relationship management to find out what their customers want and tailoring their marketing accordingly, through finding out about their customers' purchasing habits, opinions and preferences and profiling individuals and groups to market more effectively and increase sales.