Customer Loyalty Programs Key Terms

Understanding customer loyalty programs key terms can help your CRM program succeed

Many businesses use customer relationship management (CRM) systems to maintain customer loyalty. If you are using CRM or any other type of customer loyalty program, you should have a good understanding of customer loyalty programs key terms. While some terms, such as customer service, are self-explanatory, others may not be so obvious. But once you fully understand the concepts that make a customer loyalty program successful it should be an easy task to implement the program.

 

Customer loyalty management

By using customer feedback, you can set up a customer loyalty management system to help you retain your customers. If you actively work to make each customer feel as if he or she is receiving your undivided attention, you already have a good customer loyalty management system in place. If that's not your goal, you may want to re-evaluate how you handle customers so they remain loyal and continue to do business with your company.
Try: For further discussion of customer loyalty management, see the white paper from Walker Information.

Contact center or call center

Often the customer's connection to your business is through your contact center, also known as a call center. Your business can set up many ways to communicate with your customers. Whether it's through telephone service, email, newsletters, blogs or another emerging form of communication, the contact center should strive to maintain a positive image of the company.
Try: Avaya compares different styles of contact centers.

One-to-one marketing, or 1:1 marketing

One-to-one marketing refers to an individual approach to marketing in which you develop a plan designed to meet each customer's particular needs. The goal is to work toward building a business relationship first and then making sales. Businesses that use the 1:1 model often have high rates of customer retention.
Try: Read more about one-to-one marketing at Managing Change.

Customer life cycle

A customer life cycle is the relationship between a customer and your company over time. Examining the relationship in its totality can help you decide which products to recommend, how to market and cross-sell certain products, and how to best continue service after the sale. To maintain a customer life cycle, it's important that you maintain a positive environment for all the steps to occur.
Try: Jim Novo discusses the customer life cycle.

Retention

Retention should be the goal of all customer loyalty programs. It simply means keeping the customers you already have.
Try: BNET defines customer retention and the various techniques you can use to build customer loyalty.

Churn rate

Churn rate refers to the number of customers who choose not to do business with you. To find this number, take the number of people in your CRM program who no longer do business with you and divide it by the total number of customers in your CRM program. As you compare your churn rate over a period of time, you can measure your customers' satisfaction.
Try: Marketing research expert Gregory Kohs has an in-depth analysis of churn rates on his blog, Inside Market Research.

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