In a discussion today with a major PC systems integrator, I was told that the company worked quite happily with Microsoft Excel and Word for CRM purposes and had no plans to make any changes. This was bad news for someone offering CRM consultancy, so I followed up with some questions.
The sales and marketing organizations are producing good results. Sales activities are largely not documented, but a well organized ERP application provides reliable information on goods and services purchased. A simple ticketing system provides a record of service activities. The company has a stable customer base. Sales processes are simple and are supported by the ERP-System.
In this particular situation, there really would be little gained by introducing a CRM system. There is no need for sales persons to produce offers or take orders while on the road. News letters and customer correspondence can be produced and sent with Microsoft Office products. A Sharepoint depository holds all customer records.
The situation would change however, if the owner/manager were not coordinating and guiding operation himself, thus ensuring a high quality of customer service. If further management levels were introduces this would also change the scenario as would a period of rapid growth. In this case the strategy of the company is to maintain and protects its customer base and to grow only through the sale of more services to a slowly growing number of customers.
So what am I trying to say? Basically that CRM sales persons should be aware that CRM systems are not per se essential for a successful operation. This will depend on the size and processes of the organization. Particularly in the case of an owner managed company, the owner will (normally) be the first to notice when the operation is not running efficiently.
Tags: crm, Excel, Sharepoint, Word
The last two posts have been pointing to the limitations of CRM software. It is true that software functionality has not changed much since the first CRM solutions were offered, but usability and flexibility has shown a massive improvement.
Why do the applications not develop? Basically the tools customer oriented users require are not that complex and are limited in number and type. The tools are available and have been for some time. A tool alone will not help you however, just as little as owning a hammer will drive a nail into a wall. There is nothing wrong with the hammer, but you need to know what to do with it. The same applies to CRM Products. As stated in a previous post, there are solutions available for almost any CRM requirements, but first you must know your requirements.
These are the steps you need:
- Define your business aims with regard to your growth plans and planned customer base. Then define your strategy for reaching these aims from the point of view of the customer.
- Define your business processes in relation to your business aims. Business processes in sales and support are not in any way complex, but they do need attention to detail and need to interface to back office functions. Sales processes must remain flexible. Back Office processes tend to be more strict.
- Translate your processes to software requirements that support your information flow and work processes. Do not let your IT-Department talk you into making a check-list of functions and certainly not into a technology oriented selection process. Your processes are important.
- After all this, go ahead with the software selection process. Let suppliers show you how their software can support your process. In the short list stage it may be worthwhile investing in the development of a module from all short listed companies.
Many CRM projects start with having an IT-oriented employee research information on existing solutions and the development of a list of requirements based on the functions offered by products favored by that person (or team). This is the wrong track. Start a step 1, not at step 4!
Tags: CRM Applications
Contrary to popular practice, CRM consulting is about putting the customer at the center of your business, not about internal efficiency. In most of the cases I have been recently involved in, customers have been primarily concerned with the improvement of existing internal processes. This makes life easy for the consultant or software sales person, but will probably neither lead to reduced costs nor to increased sales.
Finding and retaining customers is becoming increasingly difficult as loyalty is no longer to be expected and competition increases at all levels. To be successful, it is essential to look at your company from the customers point of view. Is your company behaving the way in which your customers expect? Are you supplying sales and support services which your customers expect? Or is your company more concerned with internal efficiency than with customer needs? You do not need a CRM product to increase sales efficiency – most sales people require little more than a good contact management tool, CRM becomes effective when you prospects and customers notice an improvement.
CRM is not software and in fact most available solutions can support your operation. CRM is about knowing your customer’s requirements and putting a strategy in place to find, develop an keep them. Are you looking at your CRM Software with regard to this aim?
Generally, software suppliers will suggest a workshop to define your requirements. That is generally correct, but whether before or after the sale, these workshops will always be conducted with regard to the limitations of the software offered. Sales people know that your budget is limited and will avoid suggesting improvements which, due to software limitations, will be too costly
You must define your aims and requirements without reference to a product. If you are unable to do this with internal resources, find a consultant who is not tied to a product. However, you are still the only person who can define your business aims.
There is no need to fear that you will then not find a suitable CRM product to meet your needs. There are enough excellent solutions on the market.
Tags: CRM Software
Looking back to the beginnings of software for sales and marketing, we have seen “Computer Aided Selling”, “Sales Force Automation”, “1to1Marketing” and now “Customer Relationship Management”. Although suppliers and experts speak about the need to communicate with customers and offer 360 degree customer views, the majority of the RFPs I see tend to center arount the improvement of sales efficiency.
This can probably be explained by the increasing cost of sales and decreasing sales margins but does ignore the advantages which could be gained by looking at sales processes from the cutomers point of view. Aiming at decreasing costs usually involves simplifying current processes and not on reviewing the processes in total. It also has the side effect that products promising simple and quick implementation tend to be preferred.
Increasing efficiency and reducing costs are certainly valid aims when introducint a new CRM system, but the real advantages of a new system should include processes which would not be possible without the use of software. Sales, Marketing and Service functions can be integrated to improve the total service level to the customer not only be reducing administrative loads, but also by offering new services.
In most cases, in Germany at least, customers are categorized as A, B or C customers based on the volume of business. At first, this appears logical but at a closer look more factors should be regarded:
- business volume in relation to the customers total budget
- the customers growth plan
- marketing prestige
Just looking at achieved business volume is a very one sided view of a customer. More important is the size of the customers budget, assuming that there is no reason why you should not expand your share. Some customers will clearly grow rapidly and these need to be handled with particular care since this is a chance to establish contacts and loyalties which will keep competitors out when the company grows and more people are involved in purchase and development decisions. Some companies have a lighthouse function in their industry which makes them a generator for new business if they can be referenced.
Basically, there is nothing wrong with an ABC analysis, but the process for the classification needs to be well and clearly defined and classifications should be reviewed at least annually.
The main argument against the ABC classification, is that C customers tend to be ignored. This would lead to problems, since the rule that 20% of customers create 80% of revenue will always apply. Cutting away the C customers will only reduce revenue – it will not change the 20:80 relation!
Tags: B2B, Customer Value
The importance of information gathered during a customer call cannot be exaggerated. This means that calls to customers should be carefully planned and the results recorded in way which allows later analysis of the information gained.
Good sales persons will know how often they should visit their customers and have a good knowledge of customers attitudes and requirements. However even the best sales person will sometimes forget a call and information not stored online is not available for analysis. A well designed CRM system will provide means for suggesting calls to be made on the basis of the date of the last visit and the potential of the customer. Going into more detail, a CRM-System can support sales people by offering a customer-specific check-list of important points and will make the job of entering call data simple.
This is basically a very simple process and is often, exactly for this reason, overlooked during application design. Some of the most succesful companies guide the frequency and content of customer visits very closely – CRM in practice!
Tags: call scheduling, crm
The World Cup is here again, cars and houses are once more flagged and the streets are empty during games. The key word here is loyalty. Why are people loyal to the team they support? At a time when companies are looking for ways to promote loyalty, people are turning to sports and social media. There is a lesson to be learned from this. People can only be loyal where emotions are involved, and emotions are built around people. There is a strong need to identify with a group of people with similar attitudes and opinions.
Companies which attempt to reach customers by offering the lowest prices or the newest technology may have success so long as they are the cheapest or the best, but they will not keep their customers when conditions changed. This may be one recipe for success, but companies able to generate an identity to which people can relate will do better. Evidently, creating and maintaining the identity is a case for the entire staff of a company, but a good CRM concept should provide the organizational basis by supplying the right information at the right time.
Loyalty is more important than the promotion of special offers and technical gimmicks.
Tags: crm, Loyalität, World Cup
What prospects and customers look for:
- Information on potential suppliers and their products
- Relevant comments and reports from other users
- Supplier independent discussion platforms
What B2B prospects and customers do not want is a sales pitch, for that they can go to the suppliers web site. Many groups in XING have mutated to sales platforms, which is not what social networking is about.
What B2B suppliers want:
- Background information on persons involved with purchase decisions
- Visibility resulting from discussions and comments
- Market background information
- Real-life contacts resulting from social network activities
These requirements are not incompatible, but there is a numbers problem. While individuals looking for information can research on a specific topic when interested, suppliers need permanently to monitor these activities. Also the number of people gathering information will always be considerably higher than the number of employees available for monitoring social sites. The effort involved in monitoring is immense.
Evidently, there is a need for automating these processes, which is where CRM software comes in. As may be expected. Salesforce as a cloud oriented supplier has announced several functions, most of which are still in development. Other companies, Pivotal for example, have announced plans for integration with twitter, linkedIn and facebook. The solutions offered are oriented towards gathering information, which is fine but is only a time saving function for sales and marketing personnel who would otherwise research the information directly.
After saying that automation is required, there are some major challenges to master. Firstly, the amount of information available is considerable and only a small part of the information available will be relevant. Secondly the behavior of people active in the social web world is changing rapidly and there is no reason to suppose that this will change during the next years. Finally, marketing gurus will say that there must be a dialogue between suppliers and the outside world. All this makes automation more a dream than a realistic aim
Common to B2B and B2C is the aim of steering people to the company web site, assuming of course that the web site offers support, forums, customer information platforms and order processing. At this level, processes can and should be automated. The message I am getting to is this. CRM B2B applications may be loosely linked to social sites, the really import interaction is that between the CRM solution and a modern, functional internet presence.
Tags: B2B, Social CRM
This is probably a fringe area of CRM. Many companies invite customers and partners to contribute comments and ideas for product innovation or improvement. I would see this as part of a CRM strategy though it appears that few companies link their open innovation sites to a CRM application. It is difficult to say if companies really use the information gained from customers, but take a look at some examples:
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Tags: Open Innovation
Take a look at this example.
[…] for several years, Xerox has polled 480,000 customers per year regarding product and service satisfaction using a five-point scale from 5 (high) to 1 (low). Until two years ago, Xerox’s goal was to achieve 100% 4s (satisfied) and 5s (very satisfied) by the end of 1993. But in 1991, an analysis of customers who gave Xerox 4s and 5s on satisfaction found that the relationship between the scores and actual loyalty differed greatly depending on whether the customers were very satisfied or satisfied. Customers giving Xerox 5s were six times more likely to repurchase Xerox equipment than those giving 4s.
This analysis led Xerox to extend its efforts to create apostles – a term coined by Scott D. Cook, CEO of software producer and distributor Intuit, describing customers so satisfied that they convert the uninitiated to a product or service.
Found in Putting the service-profit chain to work by JL Heskett, LA Schlesinger, Harvard Business Review, 1994,
No further comment required!
Tags: crm, Customer satisfaction
CRM Auswahl
12./13.10.2010