An effective CRM system takes the customers’ view, not the products’ or company’s view.

There are three stages in CRM. None is more important than the others, but you will need to make one your primary focus – without abandoning the other two,

1. Acquiring new customers.

2. Increasing the profitability of existing customers.  

3. Retaining existing customers.

The first stage of CRM is acquiring new customers. Through existing customer testimonials, product quality and availability convenience, and innovation; you can attract new customers to your company. The next stage of CRM is increasing the profitability of those existing customers. Apart from enhancing relationships with the customer through cross-selling and up-selling, it also offers the consumer great convenience at reasonable costs. If you have everything the customer currently needs, make sure he knows it. To truly see the benefits of the customer/seller relationship, you must sustain customer loyalty. The third stage of CRM is retaining existing customers. Not only do you have to offer products the market wants, but you must also offer what your customers want. Your goal is to retain your customers for life. Many companies focus in this aspect of CRM because the greatest percentage of sales comes from existing customers.

Focusing a company’s goal on customer satisfaction is a major benefit of CRM. Another advantage of implementing CRM is that it redefines marketing strategy so that it is more effective. Transforming to a CRM system aligns your organizational structure with actual business operations. A key advantage of implementing a CRM system is that it re-concentrates the single focus of product performance on to the customer. CRM is a bridge linking an organization to its valued customers. Implementing a CRM system dramatically affects everyone involved. It requires a political, cultural, and organizational change. CRM cuts a wide swath across the entire organizational body that it demands a more cohesive approach toward meeting goals.

Current incentive systems may work against CRM because they reward only a portion of the customer’s relationships with the company. Therefore, your organization may lack an incentive program that supports a CRM system. The challenge of implementing a CRM involves the cultural resistance to the change it requires. You also need to embrace the international market and create an infrastructure to facilitate the new system.

To find out what your customer wants, you need to understand and identify the elements of the CRM loop. The CRM loop is the fundamental cycle of activity that drives CRM programs:

• Comprehension and Differentiation
• Development and Customization
• Interaction and Delivery
• Acquisition and Retention

The four stages of CRM loop are an interdependent and continuous cycle of activity. All your initiatives and objectives must be intrinsically connected to this core cycle of action to get the best results. As you transition from one stage to another, you will become more adept at implementation processes and achieve deeper insights that will improve each successive effort.