CRM vs. Loyalty Programs: Best Friends or Arch Rivals?
CRM vs. Loyalty Best Friends or Arch Rivals?
sk business owners what keeps them up at night and most will say driving revenue, increasing profitability, staying ahead of the competition, and retaining customers. For the past year and a half, companies in a variety of industries— most notably those involved in the financial services, telecommunications, travel and tourism industries—have looked to large customer relationship management (CRM) applications as a way to calm these bedtime demons. The nightmare is that CRM solutions can be expensive and difficult to attain, and what many are learning is that well run and targeted customer loyalty programs can provide nearly all the benefits of CRM with fewer hassles and far less expense…almost a dream come true.
their customers, and with them, their associated revenues. Therefore, CRM is no longer a competitive differentiator; rather, it is a business necessity in the 21st century.” What many organizations are now discovering is that customer loyalty programs generate nearly 80% of over-all CRM benefits--at only a fraction of the time and costs typically associated with a full-blown CRM initiative. More importantly, for some industries, CRM applications just aren’t a viable alternative to loyalty programs. The retail and restaurant industries, for instance, have large number of customers who are difficult to identify. This means that these organizations likely have no idea who their customers are, let alone which are the most valuable. The same is true for almost any business where a customer can frequent the store, make a purchase, and leave without providing relevant demographic information. For these types of industries, overcoming the customer identification hurdle is a necessary step that needs to take place well in advance of any successful CRM initiative. To help get them started, some merchants have instituted private label...