Customer Relationship Management in Agribusiness
In order to keep and grow current customers, after 1980 there was an emerging issue in the field of marketing that is known as relationship marketing. Customer relationship management in Agribusiness is the process of maintaining/ managing detailed information about individual customers and carefully managing all the customer touchpoints with the aim of maximizing customer loyalty.
Reasons for building Customer Relationship
- The relationship is required because of the very low switching cost as far as the customer is concerned. Also in this era of information technology, it is very easy to keep and maintain the detailed profile of all the customers.
- It costs five times more to attract a new customer than to keep and grow current customers.
- A satisfied customer shares with three others while a dissatisfied customer shares with eleven others. So it is very important not to dissatisfy current customers, rather keep them satisfied.
- The 80/20 formula. It has been statistically found that 80 percent of the total revenue comes from 20 percent of the existing customers.
- Customer lifetime value is very important for the company.
- Now it is easy to maintain communication with the target customer so companies should be encouraged to keep the customer relationship
Reasons for lost customers
- Cease to need
- Novelty seeking (curiosity)
- Relative advantage
- Loss of interest
Blocks for building customer relationship
- Customer satisfaction
- Customer perceived value (CPV): is the difference between what the customer gets and what the customer paid for obtaining that (Customer perceived value = Total value – Total cost)
Options are available for companies to increase the total customer perceived value
There are three options
- Increase the total value
- Decrease monetary cost
- Decrease non-monetary cost
Satisfaction is a match between expectation and performance. Customer satisfaction occurs at the level where perceived performance matches the expectation of the customer
What is customer expectation? How does a customer form the expectation?
Total perceived benefits a customer anticipates from a company’s product or service is called “Customer expectation”. If the actual experience customers have with a product exceeds the expectation, they are normally satisfied. If the actual performance falls below the expectation, they are typically dissatisfied.
Customer form expectation in three ways
- Company promise
- Past experience
- Word of mouth communication
A prosperous CRM program for agribusiness allows for a firm with a distinctive capability by assembling and examining data on their customers and prediction and transforming that data into information for use in administrative decision-making. Promising Leaders have the uppermost mean ratings for examining customer response to promotions, analyzing prevailing trends, analyzing participant influence on a working unit’s customer base, and custom-making products/services for customers. Lastly, it is significant to remark that technology infrastructure did not differentiate high performance from low performance. Strategy, people, and process consequences are more essential to CRM programs for agribusiness accomplishment than investments in computer systems (hardware and software).