Over the past two years, Britain has endured one of the worst recessions in living memory, and it would be foolish to assume that we’re out of the woods yet. But smart companies in the B2B sector are already taking a more intelligent approach to finding new business, and at the heart of this is CRM.
In an age when companies have been forced to rethink their approach to new business and look towards their existing customers, rather than allocating budget to prospecting for new sales leads, the business case for CRM has never been stronger.
Because at the heart of a good CRM system is the ability to get to the truth about your customers, about how good a ‘good customer’ really is, and where the greatest potential lies among your existing customer base. It can identify those customers who ‘have always been with us’ and so are given undue time and attention, even when their spend has declined dramatically and the cost of servicing the business far outweighs the profit it generates.
It can also identify those who are already spending big with you, yet who only take a fraction of the products and services you offer, where the potential for cross-selling is at its highest. And by blending the CRM system with the back-office system, you can identify those companies that spent more than a certain amount with you last year, but nothing this year.
Lowering the cost of sale
This sort of insight used to be difficult to pull together from different systems, but not any more. It reduces the time to make a new sale, and lowers the cost of sale, because you’re not spending money on lead generation. You are spending money on the CRM system, of course, but it’s not difficult to prove the business and ROI case for CRM when you start to investigate what it can do for you.
Don’t try to do it all at once, as that way lies failure. Instead, break the project down into, say, five stages, and make sure that by the time each stage is completed, you are getting your money back on that part of the investment.
How do you quantify this? Let’s say that your objective for stage one is to increase sales by 10% on last year without hiring extra staff. With your CRM system in place, you do not have to ask your salesforce to prepare spreadsheets or go through the week’s activity on the phone with the sales manager.
They also gain the ability to punch an order straight through to production via the CRM system, rather than using the old, manual process. Calculate the time saved, multiply that by the sales person’s hourly rate, and you can see the return.
One Sage customer, PHS Group, which carries out portable appliance testing for office equipment, has transformed its business using CRM. Two years ago, it was being throttled by paperwork. Now, the CRM system manages the whole sales process from beginning to end. The customer puts in a request, the visit is scheduled and the details are sent to the engineer’s PDA and to the client via email. Then, when the work is done, the job is billed electronically, in days, rather
Make it accountable
CRM also scores on accountability. Marketers are being challenged to connect spend to sales and prove the effectiveness of their activities. The ability to run campaigns from within a CRM system makes it a lot easier for marketers to pull together the information they need to prepare a report, rather than hunting around for it from various disparate sources.
A good CRM system, integrated with a company’s financial system, also offers greater visibility to everyone in the company of who is paying their bills. When the sales rep is looking at where he should be focusing his efforts, the ability to see that one customer pays on time every time, and the other strings things out as a matter of course, can help him to better allocate his time.
Finally, CRM helps organisations provide better customer service, and so keep existing customers happy and coming back for more. It does so by making all the information about a customer, and any ongoing issues they have, available to the customer services team in one place. This means that issues can be resolved more quickly, and that if a fix is promised within 48 hours, it actually happens.
By way of example, take Sage CRM, which helps to plan, execute and measure the success of targeted campaigns, making it easier to get the right messages to your target audience at the right time. It does so by drawing detailed information from every area of the business.
Financial profiling, order information and purchase history, plus special interests or demographics, can all be used to help create detailed profiles of customers and prospects for campaign planning.
The platform also enables list creation or the import of external lists. Campaign templates can be created and their roll out automated, enabling you to build up a picture of best practice. Sage CRM also provides meaningful campaign analysis.
Increasingly, the information you feed into CRM systems not only includes insight gathered face-to-face and on the telephone, but also data from customers’ social media activities, on sites such as LinkedIn and Twitter (see below). By inputting this data into a CRM system, a company can trace the source of a new lead back to a tweet, with as much certainty as tracing it back to a proposal request.
A good, modern CRM system, will be social media-capable, enabling users to create a data field for a customer or prospect’s activity on Twitter. It will also interface with online brand monitoring tools, enabling the customer services team to identify when someone has a problem with your company and react to it.
In some respects, CRM is doing everything that’s always been expected of it, but in a fast-changing world, it’s also moving with the times, providing businesses with an intelligent way to manage their customer and prospect relationships, no matter how complex they may become.
David Beard is presales manager, CRM, at Sage CRM Solutions
DO IT RIGHT: SOCIAL MEDIA FOR B2B FIRMS
Bond Solutions is a CRM and accounting software integrator. Managing director Derek Curtis created a LinkedIn Group for customers and anyone else so inclined to discuss social media and CRM.
The company also has a Facebook page, Twitter handle and a blog, and all content that goes on the blog links to the social media sites. CRM also plays an important part.
‘Five years ago, CRM was about managing relationships with customers. Now with the introduction of social CRM, it’s about managing all the touchpoints – on the phone, face-to-face and online,’ says Curtis.
One employee is responsible for social CRM, creating blog posts and tweets as well as monitoring customers and prospects on Twitter. ‘The CRM system brings it all together and makes it manageable,’ says Curtis. ‘We can accurately measure the value of social media.’
WE TRIED THIS AND IT WORKS
Cellular Solutions, which supplies fixed and mobile telecoms services to businesses, uses Sage CRM to improve efficiency. In an industry where the average churn rate is 20-30%, managing director Mike Bowers is proud of the fact that for his business, it’s less than 10%.
‘The CRM system allows us to share information throughout the company, to look at individual cases and flag up instances where we have not performed in a reasonable fashion and do something about it,’ says Bowers.
He adds that the company takes a long-term view on existing customers and what they are worth. ‘The average customer stays with us for 5.4 years, so we look beyond the first or second year, and we promise to deliver a certain level of performance and service support and charge a premium for that.’
Two years ago, Cellular Solutions dispensed with its traditional welcome letter to new clients, replacing it with Sage’s Communicator email. Targeted emails are sent to customers in different business sectors, outlining the terms of their contract, the service levels they can expect and the procedure for escalating any issues, should they need to.
‘The CRM system joins it all up,’ says Bowers. ‘If a customer clicks on a link in an email, it feeds into the CRM system, which has notification levels and flags to alert the account manager to act on it, with an email or a phone call.’
He adds: ‘It’s like creating mini sales leads all the time. Even the sales guys on the road get an alert on their mobile.’