The Core Components of CRM: Effective Customer Segmentation
CRM software can deliver a wealth of benefits to an association however, many associations fail to appreciate that technology is simply just one of the components of a successful CRM solution. Associations implement a CRM as a complete business strategy focused on improving the way they market, communicate, and provide services to members. Once a CRM has been implemented effectively, a CRM strategy results in numerous benefits for an association including; greater employee, partner, and customer satisfaction as well as improving the organisations financial performance among other significant benefits that will be addressed in later blogs topics.
Important components central to a CRM include:
- Effective customer segmentation
- Integrated multichannel strategy
- Well-defined business processes
- The right skill sets and mindsets
- The right technology
The Need for Customer Segmentation
Customer segmentation is the process of dividing a market into discrete customer groups that share similar characteristics, and this is an important component to any CRM strategy. Customer and member segmentation allows an organization to understand which customers are most profitable and then determine how effectively they can market to them along with providing excellent service. This knowledge then allows an organisation to determine which investments will drive the greatest returns.
Segmentation allows key customer attributes to be derived including descriptive characteristics of a specific member or sponsor including; demographics, purchasing history and special interest groups. A consumer’s lifecycle process can be analyzed from knowing how much they have spent in the past to what is likely that will spend in the future.
Analyzing Members Lifecycle
Through analyzing member’s lifestyle an organization can pinpoint significant differences as well as significant similarities among members. Segmentation sorts out which differences and similarities are important across an association by dividing them into groups and allowing them to be sorted into relevant distinctions. Effective segmentation is greatly aided by the power of CRM technology, giving organisations the ability to easily capture and analyze large bodies of timely data and to discern significant correlations among member attributes.
CRM technology provides a single view of the customer across all company touch points. In the past, organisations didn’t have an easy way to capture, consolidate, or analyze customer data, their segmentation strategies were limited and often based on criteria with little strategic value eg. geography. The CRM technology enables associations to segment customers according to far more complex and less obvious factors, such as channel preference, probability, buying patterns and other meaningful customer attributes.
Association and Membership Management Software
Stay up to date with the latest Member Evolution membership software, as our technology roadmap is constantly changing to keep up with the evolving needs that is the Association Industry. Stay tuned for more CRM Components.
Read part two covering CRM Integrated Multichannel Strategy.
