You've heard the expression, 'the customer is king.' In today's economy, the customer is key to your future success. The right customer relationship management (CRM) strategies can give you insights that lead to increased revenue, improved earnings and solid competitive advantage.
Bill Gates once said, 'Your most unhappy customers are your greatest source of learning.' Whether happy or unhappy, your customers are a vital, often underutilized source of business intelligence. Companies that take the time to understand their customers are better able to anticipate and respond to their needs. They also gain a distinct advantage over their competitors.
At this stage of the recession, many companies have lost sight of the competition, focusing instead on cutting costs and improving efficiencies. And they have succeeded; in fact, today's companies are leaner and meaner than ever before. But now is the time to look outward – focusing on better CRM to grow top line revenues, improve earnings, and take market share away from the competition.
Know your customers and reap rewards
The key is capturing the right information about your customers. With effective CRM processes and technology, you can build a single 'book of truth' about each customer. It's a data warehouse that chronicles each customer's history, including the products they typically buy, how often they buy, as well as their individual preferences and any problems they have had in the past. CRM delivers instant, company-wide access to valuable customer profiles and gives you the insight you need to turn this data into actionable information.
With a detailed customer history, you can easily segment customers, identifying which are your best customers and why. Is it their margins? Or is it their consistency of buying particular products and services? Linking your data warehouse or business intelligence system to your CRM process and technology can help you answer questions like these and gain an enriched insight that allows you to know how and when to focus on particular customers.
Consider, for example, a customer who prefers doing business with your company over the Internet. If you don't know that information, you may unnecessarily redouble your sales efforts by having a direct sales person call on that client. Had you known the customer's preference, you could have eliminated the effort and cost of a direct sale and freed up your direct sales force to focus on generating new clients.
CRM is a great way to streamline and optimize your sales force. The information you gather in various systems can show you where to focus your efforts, directing your sales force to certain sets of clients. When implemented properly your CRM system will enable you to be more successful in attracting new customers, responding to new leads and closing deals more quickly. By improving your responsiveness to customers you also build loyalty and decrease customer "churn."
At the same time, you can identify the best ways to cross-sell and up sell to each customer, either through direct sales, telemarketing, Web marketing, or other sales or marketing activities. If your goal is to better enable your website for e-business activity, CRM is the ideal approach. It establishes a single point of contact with your company and enables you to capture vital customer information and put it into various applications. The result is a cost-effective and efficient way to communicate with and learn from your customers.
Creating your system
Practicing CRM does require discipline in the form of a more efficient and integrated internal business system. When it comes to developing a CRM system, it is important to remember that this is an 'outside-in' approach that focuses on customer input. The most critical component is spending time with customers, learning what they find most valuable about doing business with you. By doing that, you are essentially identifying your main competitive advantages. From there you can design your processes and the supporting systems that will capitalize on that competitive advantage.
As with most IT initiatives, there is a wide variety of CRM hardware and software available from major vendors like SAP and Oracle. When choosing your CRM system, be sure to couple it with business intelligence capabilities that allow you to capture data in a variety of areas and organize it into a single book of truth about that customer. As you put that information into your CRM software in the right fields and capture all the types of transactions you do with clients, you now become very effective in the way to interact with them.
Keep in mind that CRM can only work to your advantage if you view as more than just a tool for getting more from your customers. It helps you do more for your customers. When you become more responsive to customers and understand the way they want to do business with you, you give your organization a head start over the competition and prepare for the impending recovery.
Mike Gorsage is a Partner and Leader of the Business Operations and Technology Practice for Tatum LLC. Tatum is the nation's largest executive services firm, providing financial and technology leadership nationwide.