Customer Relationship Management (CRM) is management approach which focuses corporate activities and resources on discrete customer segments, to the mutual benefit of both customer and supplier. CRM is typically divided into two separate components:
The analysis and segmentation of customers based on purchase behaviour, potential value and net profitability. Within this area, we offer a range of innovative services, including:
- Allocation of overhead costs to customer accounts to determine net customer profitability
- Calculation of transaction profitability per customer
- Customer segmentation using ABC, hybrid ABC, xyz, strategic factors and other methods
- Purchase frequency analysis and monitoring
- Customer price and offer sensitivity
The formulation and execution of effective sales, order and customer management techniques, yielding higher sales, higher profitability and stronger customer loyalty.
The globalisation of the supply chain, the growth of ecommerce, and industry concentration among large retail organisations and suppliers are continually changing the competitive environment. Consumers are becoming more sophisticated and less loyal, while businesses are more demanding in terms of prices, credit, merchandising, advertising and delivery conditions.
In order to compete, companies must work more effectively with customer segments of variable profitability. Today, suppliers persist in offering the same terms of service to all customers, even though they understand that some customers are not loss-makers. In order to succeed, companies must answer three questions:
- Which customers are truly profitable once all costs, including general overheads, have been allocated?
- Which customers are less profitable, but contribute to corporate overheads or ensuring volume discounts from suppliers?
- Which customers are neither profitable, nor central to overhead cover, operations or strategic interests, and what should be done with them?
The CRM methodology developed by Navigator provides a customer-centric marketing and sales approach that:
- Analyses sales, gross profit, overheads and net profit per customer.
- Identifies useful information to determine customer behaviour, such as purchase events and frequency, responsiveness to special offers, etc.
- Supports strategic decision-making, such as differentiating the level of service offered to different customer segments.
- Develops tactical marketing programmes focussing on improving relationships with customers and improving organisational and salesforce capacities to sell profitably and effectively.