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How To Better Manage Customer Relationships
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The How-To Business Book
11/20/2000
By: Mitchell Young
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A basic tenet of New Economy thinking is that power is shifting from sellers to buyers.
Unfortunately for most businesses it runs smack into an old-economy axiom: The cost of acquiring new customers is far greater than the cost of keeping existing ones. Put these together and it becomes quite clear that keeping and growing business from a loyal customer is more important than ever.
Every business will have to address this increasing power of customers to access more information about pricing, to find competitive products and to establish relationships with new suppliers.
Competitors, too, have new tools like the Internet for reaching your customers.
What's good for the goose, however, is also good for the gander. Cost-effective technology and lower-cost communications are providing smaller and mid-size companies access to sophisticated business tools - and your company probably already benefits from that trend.
Companies have deployed powerful accounting software that has helped build profitability in countless businesses. Other software and business processes such as Supply Chain Management are helping companies build further on cost savings. Now companies are deploying Customer Relationship Management processes and software, a potentially powerful new enabling technology that helps maintain your customer base and grow it.
Does this sound like magic beans to you? Well, not exactly?
In simplistic terms the goal is to bring to every business the intimate customer knowledge and contact of the owner of a small-town general store.
In Selling Is a Team Sport, author Eric Baron puts the philosophy of a customer-centric business this way:
“For your company to position itself strongly in today's environment it must instill in the minds of each and every person that he or she is an integral part of the sales process. Customer satisfaction must drive every decision.”
This is all easier said than done, and CRM is a tool to allow businesses to build and maintain a cocoon around their customer to keep them in and competitors out.
The process starts with management having a belief that a customer-centric business model will propel their company best. While most companies talk the talk of customer satisfaction. walking the walk is far more difficult.
How does Customer Relationship Management work?
Its starts with gathering lots of information about your customers and competitors and includes bringing all that information, existing accounting and service data as well as input on all new customer contact into one accessible data-flow.
It includes continuously capturing customer preferences, and putting that information to work to improve product development, marketing and customer service.
In most companies, the people in front of the customers are gathering the information about customers and competitors and product preferences. Unfortunately, that information is usually not shared and often not captured by the company.
Typically, most information is gathered in the back office, as part of the official history of a customer, from the results of sales or service calls. Sales, customer service and technicians work with the data that's given them, but do little to update and maintain the main database of customer information.
A simple example is when a salesperson makes a call and finds a service person did something at the customer's site and they know nothing about it. What companies need - and what a Customer Relationship Management system potentially can provide - is the ability to provide the same face to the customer from every individual in the company.
In most new business processes, software-enabled or not, the key step to a successful implementation is analysis of the company. Every company is going to have its own strategy; and you don't want to have to change your company to meet a software package, even a powerful application. In evaluating CRM software, look for products that allow you to control the processes you need.
Start with a plain vanilla approach and add on (many software products use application modules) as you understand how you can configure the software to match your company's strategies and work flows.
Customer management is not sales automation. In most sales-automation systems, the goal is really a mechanism for controlling the sales process (or spying on sales people, depending on your perspective).
Properly implemented CRM should be a customer-oriented system, which enables far more than monitoring the sales process. Even the most motivated salespeople need the right information about their customers. Where customer orders stand, sales history, what competitors are doing and saying, what happened at the last service call, the account's credit status, etc. And they need this information without having to hunt around for it.
Take, for example, essential competitive intelligence: In many organizations the process of acquiring and maintaining competitive analysis remains an informal, rumor-driven process. Frontline sales, customer service and technicians often acquire substantial information about customers, marketing staffs do competitive analysis, the problem and the solution is integrating that information into the daily activities of the company.
As buyers grow increasingly sophisticated and demanding, they are quick to recognize and respond to the difference in how companies interact with them. Buyers can spot the difference between a customer-oriented company and one that is simply sales-driven.
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