PRINCIPLES OF CRM
The overall processes and applications of CRM are based on the following basic principles. • Treat Customer Individually Remember customers and treat them individually. CRM is based on philosophy of personalization. Personalization means the ‘content and services to customer should be designed based on customer preferences and behavior.’ [Hagen, 1999] Personalization creates 28 convenience to the customer and increases the cost of changing vendors. • Acquire and Retain Customer Loyalty through Personal Relationship Once personalization takes place, a company needs to sustain relationships with the customer. Continuous contacts with the customer – especially when designed to meet customer preferences – can create customer loyalty. • Select “Good” Customer instead of “Bad” Customer based on Lifetime Value Find and keep the right customers who generate the most profits. Through differentiation, a company can allocate its limited resources to obtain better returns. The best customers deserve the most customer care; the worst customers should be dropped. In summary, personalization, loyalty, and lifetime value are the main principles of CRM implementation.
PRINCIPLES OF CRM
The overall processes and applications of CRM are based on the following basic principles. • Treat Customer Individually Remember customers and treat them individually. CRM is based on philosophy of personalization. Personalization means the ‘content and services to customer should be designed based on customer preferences and behavior.’ [Hagen, 1999] Personalization creates 28 convenience to the customer and increases the cost of changing vendors. • Acquire and Retain Customer Loyalty through Personal Relationship Once personalization takes place, a company needs to sustain relationships with the customer. Continuous contacts with the customer – especially when designed to meet customer preferences – can create customer loyalty. • Select “Good” Customer instead of “Bad” Customer based on Lifetime Value Find and keep the right customers who generate the most profits. Through differentiation, a company can allocate its limited resources to obtain better returns. The best customers deserve the most customer care; the worst customers should be dropped. In summary, personalization, loyalty, and lifetime value are the main principles of CRM implementation.
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