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Advanced
How To Guide
Getting Close To Customers: Leapfrogging With eCRM
From Product and Geography Focus To Customer - Centric
Strategies
The combined impact of the Euro and the Internet has
highlighted pricing disparities across Europe and will
no doubt begin to erode them for manufactured and other
internationally tradable goods and services. As manufacturers
traditionally have reaped the rewards from differential
pricing strategies in each country and region, these
developments will undoubtedly cause already slim profit
margins to become even slimmer. An interesting example
of this is to compare prices online for the same technology
items in different countries from multi-national IT
suppliers such as Dell.
While many regional differences will persist within
Europe such as those determined by culture, language,
government policies, and payment systems manufacturers
will have to move beyond product and geography-centric
sales, marketing, and customer service practices and
start to put the customer at the centre of attention.
If increasingly knowledgeable customers can make price
comparisons from country to country, the only way for
manufacturers to retain price premiums and increase
shareholder value will be to offer greater value through
improved customer service and target customers with
differentiated offerings. That is, they will have to
maximise the way they treat each and every customer
or segment. The entire customer interaction, including
what goes on after the sale, will become even more important.
Customer loyalty and retention are bound to become the
ultimate platform for competition.
Customer
Loyalty and Profitable Growth
Because it costs significantly more to continually attract
new customers than to retain the current ones, and because
the value of most customer relationships increases over
time, companies that increase revenue without holding
onto their best customers wind up eroding profitability
and, thus, shareholder value.
When we look at the business performance of customer-centric
manufacturers, we find clear indications of the underpinnings
of success. Customer-centric manufacturers are more
likely to exceed their goals for return on assets and
market share compared to non-customer-centric companies.
They are also much more likely to exceed key operational
goals for inventory reduction, parts shortages, labour
costs, and organisational learning.
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