“How do you rate your customers? Are you effective and profitable?”
Simply put, if you don’t give your customers what they need and if your business doesn’t make a profit, you’re sunk ! Ask yourself:
- Do sales, customer service and management have access to the same customer data?
- Do your salespeople have information about accounts that no one else does?
- Are you tracking client opinions of your customer service ratings?
- Does your Marketing department have a way to segment accounts and do targeted marketing?
- Does your company really put the customer’s needs and wants first?
- Is your company set up so that all departments support Marketing and Sales efforts to win and keep customer accounts?
- Is customer turnover rare?
- Is employee compensation tied to customer satisfaction and sales results?
- Does your Marketing department control what IT projects get resources for completion?
- Does your management have a long term expectation for CRM results?
If you answered “NO” to two or more 2 of the above questions, you need a CRM! Is your company customer centric?
CRM is a customer-centric philosophy, to help you get more business and be more efficient and effective, but you have to want to meet customer needs, not make the best widget because it’s really cool to. Assuming you know that you have to produce what your customer wants at a price they are willing to pay, read on…Where can you get ROI on CRM?
Immediate Cost Savings
- Internal process improvements: More efficient:lowers sales cycle time, creates less rework, automated order handling and improves the bottom line!
- Service center efficiencies: If transactions or problem resolutions are quicker, you need fewer headcount to handle them.
- Reduce expenses for Marketing campaigns: Better targeting of customers leads to less advertising/promotion waste, lower campaign volumes, lower expense to revenue ratios.
Long-Term Revenue Increases
- Salesperson efficiencies: Give the sales force tools to call more customers in an hour, with better information, where the ball doesn’t get dropped and where customers get serviced all but guarantees increased sales revenues per rep.
- Increased order size: Larger order size results from having the right tools that present cross-sell and up-sell opportunities at the sales or order person’s fingertips during sales call opportunities.
- Customer Profitability: Increase customer profitability by moving better customers up to higher value levels. Campaign response improvement: Better responses to more targeted marketing campaigns increase the call-per-order ratio and the bottom line.
Other Benefits
- Lifetime Value: What is your company’s lifetime value of a customer? How much does it cost to acquire a new customer versus retain an existing oneor reacquire old customer? If lifetime value is a key revenue driver, CRM is probably a must. If customer turnover is frequent, you better use something to find out why. CRM may be a good tool.
- Protecting Existing Investments: If a CRM solution can make your customer contact staff more effective and efficient, without changing a lot of the systems and software you have in place, then ROI can be close at hand and easy to realize. Deploying giant CRM software that replaces all of your existing systems may be a foolish endeavour that locks you into one vendor and all of their proprietary charges. Consequently, any system that does not integrate with existing systems that are working well, is probably a waste of money and an inhibitor to reaching ROI goals.
- More Customer Satisfaction: There’s no question that customer satisfaction translates into higher loyalty, better retention and more long-term value. If your processes, staff or lack of customer-orientation inhibit improved customer satisfaction levels, you are headed for trouble. CRM can greatly improve your ability to take better care of customers, in less time, with fewer employees. But, you must track customer satisfaction now to know which direction your trends are headed!
- Less Employee Turnover: If you have a lot of turnover in departments that have contact with customers, you are losing opportunities to build strong customer relationships every time a staff member leaves.
Two issues:
With CRM, you will know client needs and what was talked about, because it is captured in your CRM system, and A CRM solution may provide insight into why so many people are leaving. (It’s costing you a lot of money!) The Bottom Line: ROI may be tough to justify on a short-term basis. A customer-centric strategy may simply be the minimum requirement these days. If you know that your sales, marketing and customer service staff don’t really have the tools they need to service customers well, then maybe it’s time for a change!
Looking at CRM from strictly a “bottom-line” approach may be foolish. A better approach may be to set a strategic direction, for example: “to improve customer’s experiences with your company,” because you know that will translate into bottom-line revenue gains. Then go out and find a CRM solution that will help you accomplish this, as economically as possible. It is not worth bankrupting the company over the goal. You can find many comprehensive CRM packages that will perform admirably for you, no matter what your business is.
More on the math later…What does my company need to succeed with CRM? Are you as ready as possible? Here is a checklist that will help you:
- Set strategic and tactical goals that CRM will accomplish.
- Get senior management buy in and agreement on expectations.
- Make sure you have buy-in from the important functional areas of the company.
- Assure that short-term expectations are realistic, yet long-term goals most important.
- Set a metric tracking system on a few key metrics.
- Motivate your employees to embrace CRM with incentives tied to metrics.
- Position the project as a cultural change project to improve the whole company.