New marketing research shows that 20 percent of your
customers generate 80 percent revenue for your company. This statement contains
huge research behind itself. How could only 20 percent customers generate large
amount of revenue?
Companies are now working on CRM (Customer Relationship
Management). The core objective of CRM is build long term relationship with
customers. Now a day there is no concept of production and selling product. Now
companies are trying to identifying niche and then serve them profitably.
Severing niche profitably need some long term relations because of less cost.
Complete Marketing Blog (www.youthhelpers.blogspot.com)
20-80 rule follows some directions for its efficiency. For
example building long term relations with 20% customers contain less cost of
retaining them, zero cost of acquiring new customers, cost to serve is very
low, promotional expense are very less, above all value analysis can be done. Complete Marketing Blog (www.youthhelpers.blogspot.com)
All above benefits, company enjoy when company position its
brand in the customer’s mind effectively and force them to purchase the product
happily. A loyal customers are who are valuable for the company and company
design some CRM strategy for those customers. Complete Marketing Blog (www.youthhelpers.blogspot.com)
There are seven stages of customer loyalty. One customer may
fall in any stage during his purchase life:
Suspect - In this initial
stage company identify segment and could think that this customer fit our
target market profile. All potential customers are before purchasing, fall in
this category.
Prospect - The next stage is
prospect where company sales person study the customer and try to fit that
customer according to product and is being approached for the first time.
First-time customer - When
customer agree with the product, company’s culture and policies then he
purchases Company’s product for the first time.
Repeat customer - After satisfying
with first purchase and company’s sales force behavior customer makes more
purchases.
Majority customer - In this
stage customer think that is product is best for me and satisfying my need then
customer selects your product/company as supplier of choice.
Loyal customer - With purchase of
products more frequently, customer is resistant to switching suppliers; strong
attitude.
Advocate - Last
stage of customer loyalty program, where customer is now brand ambassador of
company and defends product in front of other people and customer generates
additional referral.
Numbers
of other concepts are attached with this concept. For example customer life
time value- where company can estimate future expected customer’s purchase for
the specific time period. Brand equity- where company find how a brand worth in
the marketing. Customer’s pocket share- where company estimate how much brand enjoy
share from the customer’s pocket. Complete Marketing Blog (www.youthhelpers.blogspot.com)