CRM, retention, and loyalty departments: FIDO
For those in the blue, CRM = Customer Relationship Management.
Wikipedia definition:
Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers
CRM plays a vital role in establishing new clients and keeping existing ones. Large corporations spend hundreds of thousands to millions of dollars on CRM initiatives to enforce a 360 view of theis clients. Customer service (the focus of CRM) has increased exponentially in the past 50+ years and has triggered the need to tailor business towards a customer’s need.
A loyal customer is one that is easier to market to and more cost-effective.
Case in point: Company ABC markets promotional products to customer XYZ. XYZ is an existing and long-term client for this company. Company ABC is now in a new line of business and has the opportunity to cross-promote or upsell similar products. Based on the client’s historical information, ABC may already know the client’s preferred method of contact (snail mail, email, phone) and the best time to reach him/her.
From another point of view: businesses make a strong effort to retain their customers to the best of their ability. If they lose a customer, this ultimately leads to lost revenue AND a possibility that the ex-client is now a client with one the company’s rivals/competitors. To illustrate this point, I will focus on Fido and the world of telecommunications.
Fido, along with other telecommunications providers have long established a “retention department”. This is a fancy term for a “cancellation department”. When a client calls FIDO and asks to cancel their relations with Fido, they are often redirected to this department.
The retentions department generally has more negotiating power than the typical Fido CSR (customer service representative). The purpose of the retention department is to simply retain its customer: to give incentives to the client that is willing to cancel. The rep’s objective is to persuade the client to change their mind by offering discounts, added features to the caller’s account and to find out why the user would like to cancel.
At the same time, the retention CSR will make it clear that if a contract is still in-tact, cancellation charges will be applied. This tactic is used to “scare” the prospective leaver from cancelling the account. If however, the contract is over, this gives the user strong negotiating power.
For example, the retention department may ask: “Why are you leaving?”
Client: “I’m looking for a better plan and I’ve found one with X provider.”
Retention CSR: “I could add those same features to your account if you’re willing to re-sign with us”.
Client: “I like X provider’s handsets better”
Retention CSR: “What if we gave you Y option, Z option, to account for the phone? You still have the option to upgrade your phone based on your terms”.
…and so forth. For more information, try google’ing “Fido Retention plans” and see what you can find!
On a side note, Fido has recently renamed their retention department to its “loyalty department”. It appears that there has been a shift in terms of customer behaviour and Fido has taken note of this. Instead of dealing with aggrevated and disgruntled consumers, Fido has taken the approach to reward its loyal customers.
This department pretty much acts the same way as the retention department but has a more subtle name.
Tags: CRM, Customer Relationship Management, Equinox, Fido Loyalty Department, Fido retention, Retention