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Strategic CRM for Chinese auto OEMs

(chinadaily.com.cn)
Updated: 2008-04-14 16:42

Customer Relationship Management (CRM) is more and more widely adopted by the Chinese automotive industry. However, what exactly is CRM, what is the pitfall, and what do companies need in order to achieve excellence in CRM, may not be well understood yet.

Value proposition of CRM

Let's have a look at figures that tell about the value of CRM[1]

Overall	§         About 68 percent of the customers that companies are losing are because of a lack of customer management – it is the most important cause §         An average CRM can improve revenue by 8 percent, while a best CRM can often increase sales by 42 percent.
Customer Segmentation	§         About 5 percent customers generate 20 percent of total revenue and 30 percent of total profit §         20 percent of prospects produce 80 percent of profits
Lead Management	§         80 percent of all sales are made after fifth contact, §         While 90 percent of sales people give up after the fourth contact
Customer Retention	§         4-10 times cheaper to retain and develop most profitable customers than selecting and acquiring new customers §         Reducing customer defections by as little as 5 percent can double profits

 

It is obvious that a good customer relationship management can improve Profit & Loss sheet and the ultimate benefit of CRM for a company is to convert Customer Relationship into Shareholder Value.

§         The Relationship is the asset not the customer

§         Relationships are assets that should be managed as rigorously as any financial or physical asset using customer economics

§         Companies should maximize shareholder value by choosing relationships with expected net values at least equal to the cost of acquiring and serving them

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