The industrywide interest in Customer Relationship Management (CRM) is created out of a need to curb alarming customer attrition. Retaining a customer is far less costly than acquiring a new one or gaining one from a competitor by offering very attractive (and hence costly) switching options. Customer experience refers to the customer's perception of various interactions with a brand through the sales and service processes and product usage. Customer Experience Management (CEM) means managing customer interactions to build brand equity and long-term profitability.

If CRM is about processes and satisfying customers, CEM tries to integrate and address all customer contacts that will lead to long-lasting positive perception towards the brand and the company. The cost of retention is $180 per customer, he says. But most automotive dealerships are set up for customer acquisition—which is crazy when you consider the average cost of customer acquisition is $1,000 or more.

A satisfied customer can be retained for long by small spending here and there by way of repurchase coupons, loyalty bonus or referral incentives. Sometimes, even a nice letter from the General Manager of the company or a small festival or New Year gift will do the trick. But the benefits that will accrue in the long run are much more than proportionate. Marketers have realized that the benefits of retaining are many fold. A well-retained customer will bring repeated purchases for himself, family members and this may continue well into the next generation. Besides the referrals received from the customer, all these family members too add to the business kitty.

Marketing Mastermind Magazine, Customer Retention, Customer Relationship Management, CRM, Customer Experience Management, CEM, Supply Chain Systems, Online Information Systems, Marketing Strategies, Project Management, Management Skills.