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A. “Customer Attainment Rate” B. "Customer Retention Rate" C. "Customer Conversion Rate"
Customer retention is more imortant than bring in new customers. It is like buliding a boundry wall arroung a water dam. One day the Dam will be full if there is no spillage no matter how slow the in flow of water is.
I believe all the aspects are equally important and the product life cycle will play a significant role in deciding the factor affecting the measurement of ROI from CRM model.
B. "Customer Retention Rate"
Market Research is key success for any organization or business to help taking the right decisions and ensuring efficiency. As senior leader in the finance team in Maersk Line in Egypt especially in my roles for Working Capital Manager and Accounts Receivable Manager, Market research was used daily for effective Account Receivable management. Below are some examples:
- Being responsible on the Accounts Receivable for multinational company in challenging economic country like in Egypt requires having a consistent flow of the information about the market, customers, competitors and banks enabling us to perform the most possible evaluation and calculation for the financial accruals for the uncollectable overdue amounts and bad debts and arrange the timely action to reduce the risk.
- The creditworthiness assessment for the customers before granting them credit facilities as doing the market research about the customers is one of the main factors in the credit analysis along with the careful verification of the financial statements for the customers to evaluate the ability of a company to honour its financial obligations.
- Promoting any new products or initiatives for handling the invoicing and collections from the customers. For example, getting the invoices directly from our website instead of hard-copies and activate e-Payment method and accordingly, we need to make some market researches to assess if these products/initiatives are matching with the market culture in Egypt or not avoiding unpleasant surprises before promoting it to the customers.
- The communication with the customers to come up with the best possible strategy for dealing and communicating with our customers. Knowing what the customer-base likes and dislike to deal with can ensure the best communications takes place and reflect positively to the customers’ satisfaction as well. For Examples, some customers like to be handled through face-to-face interaction at the counter and some other customers likes to be handle their accounts through exchanged e-mails or phone calls.
Customer Relationship management is an art of putting your feet into the customer's shoes, means understanding the customer's need. As it is true in every relationship, there are two factors a.) Trust & b.) loyalty / Integrity. which will get you the ROI. Gaining customer's trust & loyalty (also integrity) is important in measuring ROI of CRM.
customer retention rate whch signifies that the product is being appreciated and is a signal of generating more customers as long as product quality is maintained and not allowed to depreciate.
