Hello, this is Matsubara, CRM Evangelist.

Looking back at the businesses and stores that overcame the unprecedented crisis of the COVID-19 pandemic, one common thread emerges.
The fact is that companies and stores that valued their relationships with regular and existing customers were less affected.

Over the next three installments, we will explain in detail how to apply these lessons to the current economic environment and why you shouldn't postpone investing in CRM now.

table of contents

1. What the COVID-19 pandemic taught us
2. Why do existing customers support companies in times of crisis?
3. The importance of prioritizing existing customers is being questioned anew amid concerns about a global economic slowdown.
4. The deeply ingrained overemphasis on new business within Japanese companies.
5. The lack of CRM implementation is further exacerbating this situation.
6. What specifically does it mean to value existing customers?
7. Frequently Asked Questions (FAQ)
8. Summary: Next Episode Preview

1. What the COVID-19 pandemic taught us

During the COVID-19 pandemic that began in 2020, many restaurants and retail stores were forced to close or shorten their operating hours.
Among the businesses that survived, many business owners and experts have cited "the strength of their relationships with regular customers" as the key factor that separated those that did not.

Even in a situation where new customers were unlikely to visit, our regular customers, with whom we had built relationships over time, continued to support us through takeout, online sales, and crowdfunding.
—This kind of story has been covered by numerous media outlets during the COVID-19 pandemic.

Rather than temporary customer acquisition strategies, it was the accumulation of long-standing relationships that became the "resilience" needed to weather the crisis.

2. Why do existing customers support companies in times of crisis?

There are several reasons why existing customers support a company during times of crisis.

・We already have a relationship of trust.: There is no need to build trust with new customers from scratch, and it is easy to lead them to take supportive action (purchase/use) immediately.
- They are willing to tolerate some inconvenience.Even if there are changes to business hours or services, they show understanding because of our relationship.
- It has the added power of word-of-mouth.Existing customers themselves sometimes spread the word to others, saying, "Let's support that store."

These are all previouslyBefore spending a large budget on new customersThe "1:5 rule" mentioned earlier.
—This aligns with the principle that acquiring new customers costs five times more than retaining existing customers.

Even in normal times, relationships with existing customers are a valuable asset, but in times of crisis, their value becomes even more apparent.

3. The importance of prioritizing existing customers is being questioned anew amid concerns about a global economic slowdown.

Many experts point out that the global economy remains unstable.
Amidst a combination of factors that create uncertainty, such as rising prices, interest rate trends, and geopolitical risks, companies are increasingly being forced to make defensive management decisions.

In this environment, similar to the situation during the COVID-19 pandemic, there is renewed emphasis on the importance of strengthening relationships with existing customers and preventing churn, rather than investing large budgets in acquiring new customers.
Often overlooked during economic booms, the seemingly mundane yet crucial aspect of serving existing customers can become a lifeline for a company during economic downturns.

4. The deeply ingrained overemphasis on new business practices in Japanese companies.

However, the reality for many Japanese companies is that they are heading in the opposite direction from this lesson.
While companies tend to spend large budgets on acquiring new customers through advertising and promotions, they often neglect serving existing customers.

This is due to the following structural reasons:

- The number of new customers acquired is often treated as an "achievement" that can be easily reported in management meetings.
Strengthening relationships with existing customers only yields results that are difficult to see, such as "preventing customer churn."
Advertising budgets are easy to incorporate into annual plans, but budgets for supporting existing customers tend to be put on the back burner.

The tendency to allocate budgets to projects with easily measurable results while neglecting those with less visible results is a common management decision-making habit in many Japanese companies.

5. The lack of CRM implementation is further exacerbating this situation.

This structure, which heavily relies on new customers, tends to worsen even further in companies that have not implemented CRM.
If relationships with existing customers remain scattered across individual employee memories and Excel files, the organization cannot even grasp "what status each existing customer is currently in."

- Failure to recognize existing customers with whom relationships are cooling down.
Despite a long history of business dealings, the relationship was severed the moment the person in charge changed.
- Missing opportunities for additional proposals from existing customers

Without CRM, even if you have the philosophy of "cherishing existing customers," there is no foundation to put that into practice.
CRM is the foundation for translating ideals into action.

6. What specifically does it mean to value existing customers?

The phrase "cherishing existing customers" can be abstract, but it specifically refers to the following actions:

- Continuously monitor the length of relationships and changes in circumstances as an organization.
- Even if the person in charge changes, they can carry on the previous history and provide customer service with the same level of enthusiasm.
- Regularly check the customer's genuine evaluation (whether they are satisfied and whether they would recommend it to others).
- Detect early signs of a cooling relationship and take appropriate action.

These are all areas that EMOROCO CRM Lite aims to achieve through its three axes—nurturing score, emotional temperature, and NPS—as well as its churn prediction function.

7. Frequently Asked Questions (FAQ)

Q. Are you saying we should completely stop acquiring new customers?
No.
Acquiring new customers is also essential for business growth.
The key is to strike a balance between focusing too much on new customers and allocating appropriate budgets and systems to existing customers.

Q. How can I measure the effectiveness of focusing on existing customers?
Trends in customer churn rates, additional orders from existing customers, and changes in NPS scores can be measured by continuously monitoring data on the CRM system.

Q. Does this approach also apply to small and medium-sized enterprises?
In fact, for small and medium-sized enterprises, relationships with a limited customer base are directly linked to business operations, making a customer-centric approach crucial.

8. Summary: Next Episode Preview

The COVID-19 pandemic has demonstrated that the strength of relationships with existing customers is crucial to a company's survival.
In today's globally uncertain economic environment, it is necessary to re-examine this lesson.
However, many Japanese companies still have a deeply ingrained structure where their budgets are heavily weighted towards acquiring new customers, and the lack of CRM implementation further exacerbates this structure.

Next time , we'll delve into another invisible threat—the lack of investment in customer information security.

EMOROCO CRM Lite costs ¥1,500 per user per month (minimum 3 users) and has no initial setup fee, with a 30-day free trial.https://www.emoroco.com/You can start from there.
IT implementation subsidy eligible tool number: DL07-0022934.

We also offer a monthly newsletter, "ARCUS NEWS," which provides updates on EMOROCO CRM Lite and other useful information for CRM operations.
If you likeCLICK HEREPlease register here.

Additionally, we publish useful articles about CRM 4.0 on note ( https://note.com/arcuss_crm ), so please check them out as well.

Related article

• Before spending a large budget on new customers
• CRM design to reduce customer churn
• The Science of Relationship Assetization