The importance of having a CLM strategySchedule a Free Demo
One of the most difficult aspects of handling customers is predicting their reactions and behavior. Whether you are selling products or offering services, your whole company will be much better off if you can predict what your customers’ behavior will be like. Fortunately, there are ways to understand customer’s behavior by having a CLM strategy. By why is it so important to have a CLM strategy, and are there others aspects that it will affect? In this article, MoversTech CRM explores just that. Keep reading to learn more on this matter.
What is CLM?
CLM stands for customer lifecycle management. One of the first things you learn while observing customers is that all of them have a pattern when it comes to engaging your company. In marketing and customer management, this pattern is referred to as the customer lifecycle.
Depending on what your company is like, and who constitutes your customer base, the customer lifecycle can drastically vary. But, in most cases, the standard lifecycle comes in five stages. Therefore, to reflect this, CLM also comes in five stages.
The five stages of CLM
- Awareness – This is the initial point when the customer finds out about your brand. During this stage, they are most likely comparing you to other companies.
- Education – In this stage, the customer is most likely to start engaging with you. They will try to learn as much as possible about your brand and see whether you are worth doing business with.
- Purchase – If you’ve come to this stage, the customer has decided to do business with you.
- Post-purchase – During this stage, you build up customer retention. Here you engage them and see whether they need any extra products or services. Furthermore, you inquire whether they are satisfied with your company.
- Advocacy – The final stage is when you are done directly engaging with your customer, and when they advocate your brand on their own accord.
As you can see, each stage plays an important role in how effective you are with your customers. At every stage, you can work out a strategy and monitor your progress. And, if you develop a good CLM strategy, every stage will play a significant role in customer retention.
The importance of having a CLM strategy
While we can go on about how to utilize a CLM strategy, let us now shift the focus on why it is important to have one. If you are new to customer relationship management you might think that doing all this analysis is not worth your time. After all, there are a lot of aspects to consider, and a lot of testing to be done before you have a decent CLM strategy in your hands. So, why bother?
Well, as you will soon learn, there are some major benefits to having a decent CLM strategy. And once you put all of them together you will see that having one is not only recommended but mandatory.
Customer retention rates
Getting customers is difficult enough as it is. And retaining them is, arguably, even more difficult. You not only need to follow the current trends but also develop a deep understanding of your customer base. Luckily, this is precisely what CLM gives you. Developing a good CLM strategy will require you to learn what your customers are like. Each stage represents a well of knowledge as you closely follow your customer’s online behavior. After a while, you will have a clear idea of what your customers want. And that, as you will soon learn, is paramount for increasing and maintaining retention rates.
Better customer research
Knowing your customer needs and wants is not only useful for retention, but for your overall marketing as well. It can be surprisingly difficult to orient your marketing efforts and ensure that those efforts are cost-effective. Most companies have to resort to blind guessing, where they invest in a marketing strategy and hope for the best. As you might guess, this isn’t really cost-effective as most strategies won’t give much of a result. What is needed here is in-depth knowledge of customers and what their spending habits are. And that is precisely what you learn from your CLM.
Bu utilizing a CLM strategy you gain valuable input into the customer’s online behaviour and spending habits. You can then use that knowledge to optimize your practices and orient your marketing efforts. If you are a sports company, you can figure out which products are most sought after during a season, and therefore time your marketing properly. If you are a moving company, you can learn the profile of your customers and implement the right moving leads management software when necessary. All in all, the more you use your CLM, the better data you will have at hand.
Higher customer engagement
Companies often struggle with customer engagement, simply because it is not enough to know who your customer base is. Even by knowing who your customers are, you still need to decipher when and how to engage them. Luckily, that is what CLM software is all about. Through each stage, you can learn how your customers behave and what they want. This allows you to time your engagement so that your customers welcome it.
By now it should be fairly obvious that having a CLM strategy is a must. Without one, you will have a hard time optimizing your marketing and ensuring good retention rates. Unfortunately, there is no one-for-all CLM strategy. Every company needs to find what works for them. So, what we advise you to do is to first carefully look through different software. While a moving company can make use of MoversTech CRM, a sporting company may require a completely different system.