Customers rule. Customer satisfaction is our only business. Customers are why we're here.
As an entrepreneur, you know every variation of that customer-centric cliché. In the beginning, it was your public or private mantra, a constant reminder of why you launched your business. Later, you repeated it to your employees dozens or hundreds or thousands of times. Maybe you even incorporated it into your motto or mission statement or posted it prominently on your office walls.
So you sincerely believe customers are your company's raison d'etre. The question, then, is whether you - and your business practices, and your technology infrastructure - focus more on acquiring new customers or on serving those you've already got. Chances are pretty good it's the former; if so, now is an excellent time to think about the latter.
As the nation's economy emerges from recession, many companies are adopting a more cautious bird-in-the-hand strategy - working to retain the customers they have rather than continually pursuing prospects. Retailers, for example, "can no longer just open new stores to drive growth," says Tom Johnson, managing director of the Consumer Segment Customer Relationship Management Practice at BearingPoint Inc., the McLean, Va.-based consulting firm. "Before they undertake a massive expansion, they need to go back and satisfy their existing customers."
Note the verb: satisfy. We're not talking here about just about customer service, responding to customer-initiated questions, complaints, returns, exchanges, adjustments, and the like (although doing so courteously and efficiently is certainly critical to any company's survival). We're talking about customer satisfaction, nurturing ongoing two-way relationships that - ideally, directly or indirectly - lead to more business. Reaching that goal requires learning as much as possible about what customers want and what they do. The method for attaining and applying that knowledge can be summed up in three words: customer relationship management.
Companies can use effective CRM for everything from sales (using information to find new customers or up-sell to existing ones) to service (improving call-center efficiency) to going the extra mile (alerting customers to potential new revenue-generating opportunities).
For an acronym that's generated entire books and Web sites, CRM remains the source of much confusion and misunderstanding. Let's clear up the two most widespread CRM myths right now:
Myth #1: CRM is a technology. Reality: Sure, technology supports CRM. Vendors use the term to refer to software that collects, analyzes, and stores customer data, making constantly updated records easily accessible throughout the organization.
But CRM is more than that. It is a "transformation effort that is process-oriented, organization-oriented, incentive-oriented - not just technology-oriented," says Bob Haas, vice president of the strategic information technology practice at the A.T. Kearney consulting firm in New York. In other words, CRM is a process and a strategy; done correctly, it helps companies earn customers' long-term loyalty by learning as much as possible about them.
Typically, CRM as a technology is used to create a single comprehensive portrait of each customer's past behaviors and possible future needs, which any authorized employee can access from any desktop. That way, a sales rep trolling for new business has the same critical customer information as a service rep handling a complaint.
Effective CRM initiatives focus on integrating all those pieces of information to fulfill that underlying strategy.
Myth #2: CRM is a big-company thing. Reality: True, CRM was for years an acronym heard almost exclusively inside major corporations. That's because nobody else could afford the five- or six-figure price tags to buy and integrate all those components. But with the corporate CRM market largely saturated, software vendors are targeting small- to mid-size businesses. On the software side, the field includes giants like IBM, PeopleSoft, and Microsoft, which launched its SMB-oriented Microsoft CRM solution last year, as well as smaller companies like Onyx Software and FrontRange Solutions. Prices vary widely, but start at a few hundred dollars per user.
What's made CRM available to even the smallest businesses today is the Web - specifically, hosted sites run by vendors or third parties, says A.T. Kearney's Haas. Companies simply get online and log in to get CRM capability for costs as low as $65 to $75 per month, with the average running at about $100 to $150. (A caveat: Keep in mind that, in addition to those per-user costs, you may need to pay for consulting, training, or possible infrastructure upgrades to make sure the new tools play well with your existing ones).
No matter which CRM method you use, you'll find it works best if you follow a few simple guidelines.
Consider your customers' convenience rather than your own. Many companies, especially fast-growing ones, fragment into independent "silos" with little information overlap. From the outside, though, customers still see one company. They have little patience with hearing that an employee in one department doesn't have access to information in another, or being told that they have to call somewhere else. Any effective CRM initiative must be organized to provide one-stop service for customers. The possible bonus for you: Reorganizing this way keeps information consistent and up to date, reduces wasted effort, and eliminates redundancy.
Make it easy for customers to reach you. Provide complete, up-to-date contact information on your Web site, in e-mail messages, and in other company documents. Include contact names and hours of availability, if possible. Acknowledge incoming inquiries promptly, even if you must tell the sender you'll have to get back to them later. Then do so.
Offer self-service options. Many customers are happy to do something themselves if it means the job will get done faster. However, effective self-service requires an instant response - for example, an automated e-mail confirming a transaction - and it must work simply and perfectly. A few years ago, customers might spend an hour of trial and error on a self-service site, Haas says. "That's gone. If it's not intuitive and easy to use, people dismiss it very quickly."
Share what you learn internally. In customer-centric organizations, information hoarding is passé. Update customer profiles after each contact; pass complaints or sales leads to the appropriate people.
Watch for patterns. One of CRM's great values is providing early indicators about current trends or potentially predictive behavior.
Follow up. Whenever customers initiate contact, touch base later - by mail, e-mail, or telephone -- to make sure they got what they need.
Try Ed Koch's trick. The former mayor of New York was famous for asking his constituents: "How am I doing?" Follow his lead by soliciting customer feedback. If you use a high-tech approach here, such as a Web-based survey, be sure to include a high-touch component, such as a follow-up phone call or even an in-person interview or focus group meeting.