CRM and Customer Engagement

It goes without saying that communicating with customers is important for any organization, including Clubs. Communication in a marketing context is the ability to provide reliable and timely information (Oly Ndubisi, 2007). A slightly different view of communication is that it is the process of interaction and dialogue between a company and its customers during different stages of the customer life cycle… Effective communication has a number of benefits to an organization (Oly Ndubisi, 2007).

These include:

• Staying in touch with valued customers
• Providing timely and trustworthy information to customers
• Proactive communication with customers if or when a service problem occurs

The above activities allow for an organization to build stronger customer relationships and through better relationship, greater customer loyalty. The longer the customer stays with the organization the greater is the value of purchases and the lower the costs of managing the customer (Buttle, 2006). Communications not only help with maintaining and enhancing relationships with existing members, but also serve an important role in acquiring new members.

One should bear in mind that customers are being bombarded with vast amounts of information. As such it is key to serve customers with only those communications and offers that are relevant to them at any given point in time. Also noting that excessively frequent communications can have an opposite effect to that desired.

A CRM system can have a strongly positive impact on customer retention, hence resulting in Customer Lifetime Value (CLTV). CRM systems in general allow for an increase in customer loyalty in the following ways (Roberts-Lombard, 2011):

• By providing timely and trustworthy information to customers.
• By providing more highly tailored services to customers by integrating information from a number of different channels as opposed to a mass marketing approach.
• Resolution of conflicts between the organization in a quick and timely manner.

CRM systems keep track of customer interests, their purchase history and preferences in general. They allow for Clubs to create highly focused micro-homogeneous groups of customers and serve personalized communications via the appropriate channels to Members. As such this has been proven to garner significant improvements in engagement (as compared to generic mass communications), that lead to Members building a stronger affinity to the Club and in turn an increase in visits and over time, spend.