A Real CRM Strategy or Just Tracking Customers?

An increasing number of companies claim to have adopted the principles of Customer Relationship Management (CRM)

In many cases they are simply paying lip service to what has become one of the latest ‘buzzwords’.

Carried out correctly, CRM is an active process.

It makes a difference which is noticed by your customers. That difference reflects in your bottom line.

 

What is CRM?

The idea itself is nothing new; its roots have been around since trading began. The principle of looking after your customers so that they come back regularly is, after all, merely the basis of good trading. In an increasingly competitive commercial world however, strong customer relationships take on an increasing importance. With the cost of selling to a new customer being five times the cost of selling to an existing one you can’t afford to lose established business.

Yes, you still want new markets, and yes, for various reasons customers will still disappear. The important thing is to minimise this loss and make sure the reasons behind it don’t stem from something you are doing – or more significantly something you are not doing.

Which is why good Customer Relationship Management is vital – and why the process has now been refined to make it more effective than ever.

What does CRM Involve?

In essence, making your customer feel special by understanding his needs and fulfilling those needs in a personal manner which will keep him coming back for more.

Going that extra mile and providing service beyond that which was expected takes your customer to the next stage, where he becomes a ‘raving fan’ of your business - and you can’t have too many of those. Achieve this and your customer suddenly becomes part of your sales force, telling everyone he meets how good you are.

This can actually be achieved without computers and software. A good memory and a card index can keep track of customer’s preferences and buying patterns. Newsletter campaigns, post sale follow-ups and special offer mailings can all be organised - given time; except that this is where it so often falls apart. For most companies time is the commodity in shortest supply.

Identifying the Challenge

This is where you find the first steps into CRM. Contact Management or Personal Information Manager software can provide substantial benefits. A database of customers for envelope labelling, simple word processing and calendar functions can save an enormous amount of time. The latest breed of contact manager software can do this quite efficiently across small groups of people, an office based sales team for example. So what’s the point of moving to a full CRM strategy? Why not stick with a simple address book style contact manager?

The real secret of selling has always been to ‘Think Buying’
So consider for a moment, the things that annoy you as a customer:

• Promised return phone calls not made, and information not sent
• Not being informed of possible delays or problems
• That call to tell you when your order is ready – promised but not made.
• One department in the company having no idea what another department said to you in the last call or letter.
• No one bothering to call to make sure the goods arrived, or are satisfactory. Probably no calls at all – until of course they want to sell you something else
• No one knowing what they last sold to you – or when
• No one knowing enough about you to offer you items or services that would enhance or compliment your purchase. Frequently only one person in the company seems to know anything about you! And if they’re not available…?

Overcoming all this takes more than just contact management software.

The Answer

What is needed is a change in attitude that extends from shop floor to boardroom. Not easy! It takes something special to initiate such a major change, but once up and running the change will feed on its own success.

The CRM solution provides a sophisticated but (and this is important) ‘easy to use’ computer system which monitors all activity with customers, current or potential. Phone, mail, e-mail and fax all link in. Give everyone in your company who deals with your customers access to that system. Link it to word processors, accounts systems, stock control and manufacturing now you’re starting down the right road to achieving your ultimate goal - customers who become Raving Fans.

Your Information Bonus

The additional benefit to a company implementing CRM, is far superior tracking of sales and marketing activities. Suddenly it becomes easier to identify the most effective sources of business.
i.e.

• which Mailshots worked best
• which sector provides your best business
• how many leads turn into actual sales

All this information makes running your company so much easier. Your Sales Manager will also benefit considerably from being able to see sales activity and ratios more clearly. He will probably produce the most accurate sales forecast you have ever seen!

Conclusion

So, should you try to implement CRM or just stick with contact management? That depends on what you want to achieve. If your aim is to look after your customers to the best of your ability, keep those customers, and tower head and shoulders over your competitors, it has to be CRM.

The alternative is to stay with the pack and lose, on average, 50% of your customers every 5 years. Can you afford to do that?

About the Author

Roy Gough has run and managed businesses for over 30 years. He has experience in finance, automotive, retail, high tech and ecommerce. He uses this knowledge to help businesses to improve their sales and profitability. He currently also sells GoldMine business contact management software, QuoteWerks quotation management tool and Mind Manager the brainstorming and planning tool. His web site can be found at http://www.alloycrm.com.