Customer Relationship Manager(CRM) Question:
Why a Business Wants Relationship with its Customers?
Answer:
Every business regards its customers as a lifetime stream of revenue; losing a single customer can cost the business very high. Lifetime Value (LTV) for a customer is considered to analyze the effectiveness of a particular marketing channel.
For example, if the Churn Rate of a business X is 5% and that of business Y is 10%, then in the long-term, business X would have a larger customer base than business Y, which places business X at the position of competitive advantage and directly influences profit of both the businesses.
A business can generate greater sales volume and in turn greater revenue if it knows its customers well and have good relationship with them. Thus, solely for the economic purpose, every business wants to have healthy relationships with their customers.
For example, if the Churn Rate of a business X is 5% and that of business Y is 10%, then in the long-term, business X would have a larger customer base than business Y, which places business X at the position of competitive advantage and directly influences profit of both the businesses.
A business can generate greater sales volume and in turn greater revenue if it knows its customers well and have good relationship with them. Thus, solely for the economic purpose, every business wants to have healthy relationships with their customers.
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