Quiz 11: Customer Relationship Management

Business

Customers are given high priority in any business organization and the firms takes several steps to satisfy its customers and offer best products and services to retain them. Customer relationship management (CRM) refers to the program wherein the firm maintains and manages proper interaction with the current as well as potential customers. Data analysis is undertaken by the firm about customer's history in relation to his purchases and depending upon this, the firm's services are improved to maintain amiable relationships with the customers. This way the firm retains the existing customers and also increases its customer segment. One of the CRM program participated by an individual as a customer can be described by stating that one of the banks where the individual keeps his account calls its customers every fortnight or twice a month and provides latest information about the events and activities taking place in the bank in terms of the services and products. This way the bank retains the customers and keeps in touch with them and also attempts to attract the existing customers to buy more products from the bank.

Customers are given high priority in any business organization and the firms takes several steps to satisfy its customers and offer best products and services to retain them. Lifetime value of customers refer to the time period for which the customers would buy the products or services from the seller and will be creating a value for the seller in terms of its sales and profits. The reason why retailers want to determine the lifetime value of their customers because unless the retailers will be aware about the time for which the customers would be buying its products or services, the retailer cannot forecast the amount of products and type of services it has to keep ready in stock for the purchase by the customers. Similarly, the retailers are facilitated to determine the amount of profits that could be generated in the given time if the lifetime value of customers is properly determined. This is the reason why retailers want to determine the lifetime value of their customers. The past customer behavior helps the retailers in anticipating future customer retention in a way that by observing the buying behavior of the past customers and the time period for which the customers have bought the products or services helps the retailers to determine the level need for its offerings by the customers. The retailers would be able to evaluate the performance of its products or services, and the kind of sales and profits that could be generated out of it by determining the past buying and consumption behavior of the customers. This way retailers offer the desired product in desired quantity to the customers for future consumption and never remains stockout. This way past customer behavior helps the retailers in anticipating future customer retention

Customers are given high priority in any business organization and the firms takes several steps to satisfy its customers and offer best products and services to retain them. Lifetime value of customers refer to the time period for which the customers would buy the products or services from the seller and will be creating a value for the seller in terms of its sales and profits. The reason why some customers have a low or negative CLV value could be that the customers might not be properly aware to make the best use of the product or the services offered to them by the retailer's side. It could also be the case that the product offered by the retailer is not demanded by the customers in the market or they might have carried bad experience or dissatisfaction attached with that product/service. These could be the reasons why some customers have a low or negative CLV value. The approach that retailers can undertake with low lifetime value customers to minimize their impact on the bottom line is that the retailers need to take feedback from the customers and has to improve the loopholes in the product/service offering. This will allow the retailers to offer right product to the right customers and obtain lasting lifetime value of customers. The retailer has to attract the customers to make a second purchase because when the customer will buy goods or services from the retailer the second time, it will increase CLV.

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