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Entrepreneur eBook Customer Loyalty

Entrepreneur eBook Customer Loyalty



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Published by: kantti on Dec 11, 2008
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Improved Coordination of Marketing

and Sales Messages

To be as effective as possible, sales and marketing messages need to mirror each other. If a

companypromotes its products in one manner and its sales team sells with another, it may

seem as though the company’s approach to selling its products is inconsistent and disjointed.

How does a CRM program affect this synergy? First, at the most basic level, working from

a centralized database reduces basic errors in contacting your customers. Information is gen-

erated from a single source, all but eliminating the opportunity for data-entry errors that may

misidentify a customer. Of course, this also makes it easier to plan your sales and marketing.

You can see how many customers you have and how they break down by the criteria that mat-

ter to your company: type of customer, geography, income level and other parameters for

“best” customers. This can help enormously when you are planning campaigns, allowing you

to set different criteria for different customers to receive specific communications based on

their needs. This gives you the opportunity to tailor marketing messages that will be most

effective for each group, or to create one overall set of messages or offers.

Most CRM software solutions allow you to segment data based on various criteria. So a

chain of hardware stores with locations in various places on the East Coast can create direct-

mail programs for Northeastern customers to promote shovels, rock salt and other items

needed during snowy months. At the same time, it can create another promotion that touts

lawn care products for Southern customers. A financial planner, meanwhile, can segment his

or her customers based on stage of life, promoting retirement planning to customers who see

their golden years approaching and touting college tuition planning services to those who

have young children. Your CRM software solution should be flexible enough to create lists of

customers that are as broad or as narrow as you need.

How CRM Helps Sell Customer Benefits

One of the first lessons that marketers learn is to focus on selling benefits to the customer,

not features of a product. The bigger your customer and prospect base, the more tempting it

can be to slip into the most general type of marketing, ticking off product features and allow-

ing customers to draw conclusions about how those features will benefit them. After all, it can

be difficult to craft broad messages that resonate with an equally broad customer base.

Your CRM system can help salespeople track revenue potential for their accounts, as well

as determine the probability of closing a sale and at what stage. Most systems have reminder

functions to help salespeople better manage key dates, such as deadlines for proposals, pres-

entation appointments and even customer birthdays. Virtual collaboration features often

allow salespeople to coordinate their efforts online with members of production, sales, cus-

tomer service and other departments with access to the system.

CRM systems can also capture information about where business is coming from. Referral

sources and influencers are important streams of business. By capturing this data in your

CRM system, your sales team can target additional referral sources and influencers to build

on these sources of customers.

Once you have a CRM solution that can segment your audience and deliver tailored mes-

sages and offers to them, you can collect feedback and results, testing which tactics are most

effective. Your sales team can access customer records to see which offers have been made or

what promotions are being offered to particular clients. For example, a beauty products com-

pany may be test-marketing a new line of products sold in packages that fall at different price

points. By recording sales data in the company’s CRM system, it may find that customers like

combinations of soaps and bath gels but prefer to choose their own lotions. Or they may find

that packages priced at $19.99 sell frenetically, while anything over $25 sits on the shelf. By

capturing this data and segmenting it by type of retailer and market, the company can better

customize its product lines so they’re easier for salespeople to sell.

All of these features allow salespeople to see promotional messaging and determine

whether the offers and selling points used were right for those customers. The data captured

from sales calls, call centers and even retail employees can then help you decide whether your

messages and offers are working or whether they need to be changed in the future.

Improving Efficiency Through Automation

Another way CRM can improve sales and marketing efficiency and consistency is by

automating more of your communications with clients. However, in addition to generating

outgoing contact with your customers, a successful CRM implementation can help you auto-

mate reports of results, return on investment and other elements of your campaign.

First, you can select specific lists of customers to whom you wish to promote your prod-

ucts or services. Filter your overall customer database to choose exactly the type and number

of customers and prospects to which you wish to target the campaign. This allows you to cre-

ate the most qualified lists possible. Similarly, you can choose specific products and services,

customizing your offerings and highlights to each audience. You may choose to send back-




ground and informational literature on specific products or create a specialized e-mail pro-

motion for each group.

In addition, your CRM solution can help you automate the timing of your communications

with these groups. Seasonal businesses, like landscaping and pool companies, can send out

reminders to customers that it’s time to schedule service. Doctors’ and dentists’ offices can

automatically generate lists of patients who are due for appointments. Such reminders could

be sent out every other week to customers who haven’t responded, allowing them to either

take action in the correspondence or ask you to take them off your list. This helps you keep

your best customers—or patients, in this case—routinely engaged with you. Other automated

communications may include periodic newsletters, e-mail-on-demand white papers or reports,

date-related promotions such as birthday or company anniversary discounts, and the like.

You can also automate your calculations of return on investment. Many CRM programs can

track budgets for specific marketing programs. Through the use of coded response mecha-

nisms such as coupons, inserts and ads to be returned for discount, as well as special-response

telephone numbers, passwords, website promotional codes and microsites, you can measure

the response levels to particular campaigns. As these responses are recorded, your CRM sys-

tem can calculate two very important pieces of data: It can tell you which messages, offers or

promotions pulled the greatest response, and it can tell you the cost per sale and return on

campaign investment.

These are critical pieces of data for the average business. Of course, understanding the

most productive offers may require some analytics—you need to determine whether the offer

is the driving factor or whether a particular audience responded well to an offer because of a

special circumstance. You may find that your invitations company has had a spike in orders

from customers in a particular area. Upon closer examination, it turns out that it’s April and

people are ordering invitations to weddings and graduation parties. At the same time, the

local stationery shop closed. In this case, your CRM system has given you the information you

need to capitalize on an important new market opportunity—something you likely never

would have uncovered without the power of your CRM data.

In addition, responses can tell you how much your campaigns are costing you and whether

the results are significant enough to warrant continuing them. Lackluster campaigns can easily

be identified and modified or discontinued. You may also have other methods of measuring

the success of particular programs, whether they’re sales figures, inquiries or other metrics.

Your CRM solution should be able to help you measure the level of success that your program

has had.


Creating Loyalty Through Customer Focus

Some experts estimate that the average company loses 20 percent to 40 percent of its cus-

tomers every year. Since it costs more to find new customers than it does to retain existing

ones, it’s smart business to do everything possible to keep your customers happy—and keep

them coming back to you again and again.

The better you service your customers, the more loyal they are likely to be. Since CRM pro-

grams allow you to examine your customers’ needs, buying habits and histories more closely,

you can create loyalty programs based on their individual patterns. These may include dis-

counts or other incentives that are automatically applied once a customer reaches a certain

buying level, or professional courtesy discounts for people in the same geographic area or

who run related businesses. Some loyalty programs provide rewards for your loyalty (think

American Express or airline travel companies)—when you reach a certain buying level, you

get free products or other rewards.

While these can be effective, on a more basic level, customers want to know that you care

about them. Using a CRM system that captures customer interaction can help you spot com-

plaints in time to remedy them before you lose your customer to a competitor—or worse.

Today, unhappy customers have access to blogs and other mechanisms that can broadcast

negative information about your company to hundreds or thousands of people. So it’s best to

take care of problems as soon as they arise.

But what if your customers don’t tell you they’re unhappy? Many won’t. There are other

ways you can spot problems through the information that CRM captures:











Examining your CRM data for these clues—or better yet, programming the system to note

these parameters on a regular basis—can help you actively seek out customers who are

unhappy and give you the chance to address their concerns and problems, increasing the like-

lihood that they will remain loyal customers.

Identifying Customer Needs Through CRM

By housing historic sales information in your CRM system, you can more quickly learn a

customer’s sales cycle and predict buying habits. This will help you more accurately target the

customers who are ready to buy from you and not waste time and resources aggressively sell-

ing to customers who are not ready to buy. For example, you may find a great prospect who

signs a yearlong contract with an existing provider each June. Spending a great deal of time

and resources trying to obtain a buying commitment from that prospect in December is prob-

ably wasteful, since he or she won’t be in a position to negotiate an agreement with you for

several months. In addition, selling aggressively when the customer isn’t in a position to buy

shows a lack of understanding of his or her company and may actually alienate the customer.

By capturing sales cycle information, you allocate enough time to keep in touch with the

prospect and know exactly when it’s most efficient to increase your sales efforts.

Another area where a well-constructed CRM program can help improve the consistency

and reach of your sales and marketing efforts and messages is by capturing cross-channel cus-

tomer data to give broader insight into customers’ needs. Let’s say you own a PR firm. Your

sales process probably uses an account executive who deals with one or two contacts at your

client companies. That person may or may not be tuned in to all the needs of the client com-

pany. However, if you’re capturing customer data from your website, you might see that

another contact at the company used the site to request a free report that you are offering via

e-mail about media training or advertising services. This information tells you that the com-

pany is interested in that service, and you can inquire about providing it before the client’s

company hires your competitor to do so.

Many businesses have steady sources of existing or potential referrals, but they may not

even know about them. Training employees to capture information about where business

comes from is important for many reasons. In addition to measuring campaign return on

investment, capturing referral sources so that they can be recognized and thanked can help

keep referrals coming in. In addition, such information may lead to other referral sources or

even selling opportunities. For example, if a florist finds that an increasing number of big

orders are the result of referrals from a local banquet hall, he or she can cultivate the relation-


ship by thanking the manager in some way. The florist may then send samples to other cater-

ing halls to interest their managers in passing along the florist’s name to people planning par-

ties or weddings.

Finding Strengths and Weaknesses

As we have seen, managing customer and other data through CRM can shine a spotlight on

your company’s selling strengths and weaknesses. Some other areas that can be illuminated

through CRM include:

IEMPLOYEE EFFECTIVENESS: Whether it’s a salesperson who is not making an adequate

number of contacts or a call-center employee who is brusque with customers, a functioning

CRM program will uncover employee performance issues. When the system reveals that a

particular salesperson’s calls are down 20 percent for the quarter, a manager can quickly move

in and find out what the problem is.

ILEAD GENERATION AND FOLLOW-UP: Whether they come from referrals, marketing efforts

or trade shows, each lead holds the promise of increased sales. When leads dry up, that can

be a death knell for any company. Your CRM system can help you track lead levels and docu-

ment what happens to them when they come in the door. Through the automating functions

of most CRM programs, you can immediately route the lead to the proper salesperson.

IDATAREQUESTS: Requests for information may come to your company in many ways—

through phone calls to your office or call center, inquiries on your website, or e-mails and

other correspondence. When a particular customer requests information, it’s motivated by

something on his or her end. That something can be benign, or it can mean that your relation-

ship with the customer is going to change, for better or worse. Either way, your CRM system

can track this data and determine whether you need to formally follow up on these requests

for information.

IORDER FULFILLMENTGAPS:When a customer places an order and it doesn’t arrive on time,

that can do serious damage to your relationship. By tracking delivery methods and times as

well as customer complaints about shipping, you can determine whether remedies need to be

made in this area.

Clearly, an effective CRM system can help you coordinate your sales, marketing and cus-

tomer service functions through comprehensive knowledge management. By using the data to




identify patterns and become more familiar with any customer’s business, companies that

properly implement their CRM systems can reap the rewards of capitalizing on opportunities

ranging from big-picture trends within their customer bases to microviews of specific cus-

tomer needs. Ultimately, though, an effective CRM program allows you to focus on profitabil-

ity. You’ll be able to harness information and use it to spot and forecast trends and opportu-

nities, manage your accounts better and improve customer satisfaction, create more targeted

and powerful marketing campaigns, and arm salespeople with the data they need to be more

effective. The right CRM system streamlines the process, allowing you to reach critical objec-

tives and drive profitability to a new level.



To be on the receiving end of the many benefits of a CRM program, the program

must get off on the right foot. Estimates of CRM project failure rates range from

Gartner Inc.’s widely known prediction of 50 percent by 2006 to as high as 80 per-

cent. However, there’s little evidence to back up any of these grim statistics.

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