Customer Relationship Management aims to leverage customer satisfaction in order to increase sales. Indeed, there is a clear correlation between customer satisfaction, and one company sales. Nevertheless, customers are weird animals. Therefore it is hard to satisfy them. If I may be more precise, it is hard to satisfy them all.
I read this very interesting blog article of François Jouandet about the topic. There are several case studies showing that the best customer centric companies sometimes are struggling. It is the case of Kmart, having the best KPIs in terms of customer satisfaction, but struggling with sales for years. Why? Because customer satisfaction cost money. A lot of money.
Here are the most common negative aspects of a customer centric organization:
- Raise in operation costs to coordinate customer relationship management efforts
- More complex reporting
- Sometimes doubling positions which leads to more inefficiency
- Longer decision making processes.
This is the reason why your customer satisfaction efforts should be focused on specific segments of clientele. We have already discussed on this blog on why you should abandonned some customers' segments are they could be toxic (especially non profitable ones, that drains a lot of energy). Some companies are paying customers to leave their loyalty reward programs...
Also, it is important to have a clear ROI idea of your CRM strategy, in order to master the cost and its efficiency. Leaving some expensive programs in order to cost less and be more efficient, and moreover to have a clear segmentation of your clientele, in order to master your expenses upon your ROI.