Connecting the dots with CRM
Customer relationship management systems may appear confusing to the uninitiated, but when applied properly to businesses, they have a major impact on the bottom line.
Customer relationship management systems may appear confusing to the uninitiated, but when applied properly to businesses, they have a major impact on the bottom line.
If you have more than a handful of clients or customers, and certainly when you are dealing with more than 15 to 20 people across your customer base, those in the know reckon you should be looking to a Customer Relationship Management (CRM) system to achieve impact, to maintain and grow your business.
And the news is good. Your options are now many, with fewer hybrid systems backing off accounting software. They are designed from the ground up to deliver a customer-centric business system.
But if you think this is just glorified sales and marketing management – read on.
CRM expert, and producer of the annual CRM Watchlist (covering the sector globally), Paul Greenberg has followed the trends for a number of years, and is best-placed to describe the benefits of achieving ‘impact’ – the new holy grail in CRM.
“If a customer thinks of your company when they are thinking of doing something that is related to you, that’s impact. If your competitors see you as someone worthy of competition, that’s impact. If you are seen by pundits, media and practitioners as a leading solution or provider in your field, that’s impact. If a prospect thinks of your company as the one that they need to investigate because of interest in a categorical solution, that’s impact.”
Clearly there’s more to CRM than that and you’ll want to hear about the local options.
NZBusiness was fortunate enough to get two of the more experienced and outspoken local CRM practitioners to spell out what a system must achieve, and provide the information you need to choose the best option for your business. We’ll hear from Microsoft too.
First up, Greentree CEO Peter Dickinson, a highly-experienced CRM practitioner who has been ‘in the game’ from the outset, says: “A good CRM [system] is part of the nuts-and-bolts of your organisation and there is nothing remotely ‘soft’ about it.
“A better acronym would be CTD,” he suggests. “Connecting the dots, because essentially that’s what you’re trying to do. CRM should be the frontline layer joining across all your operational systems and services, which a customer touches or can indirectly impact on them. In most businesses that is pretty much everything you do.”
So what should a good CRM system deliver?
He says it should give everyone in the business direct access to real-time information about a customer. A truly great CRM system turns that information into operational intelligence.
“It might start with simply identifying the contact or organisation as a customer, but then you should be able to deliver accurate information, via the CRM, to give live status updates as to where everything is at – be it an order, production-run, project, service requirements or all the financial processing associated with an account.
“It’s what makes the difference between them remaining a customer or becoming a victim of a gap in your information layer,” he explains. “If you’ve shipped the wrong goods or delivered to the wrong address, you’ve just created a victim.
“In the same way, if you don’t have manufacturing linked to supply and service in real time, how can you possibly tell a customer with any certainty if the goods they want are in stock or not? And if they are not, when they are going to be?
“I am floored by the number of businesses looking to install a CRM system to improve their service levels to customers that are effectively looking to put a sticking plaster on a broken leg. If they can’t connect the dots between all of their suppliers, their internal production processes and their inventory and service systems, then how can they have any certainty the stock they’ve just promised a customer is going to be there when they need it? Or the field engineer is going to turn up on time?
“Tagging on a CRM system, no matter how good it is, can’t fix the fact that your supply-chain is disconnected from the rest of your business,” Dickinson says.
Strategy not software
“CRM is about strategy, not software,” says Jen Rolfe, joint-MD of Rainger & Rolfe, which won the 2014 Supreme Marketing Award for their CRM strategy to move and protect BP New Zealand’s market share and increase its return, by focusing on key segments – to have customers spend more on site.
“Knowing who your customer is and how valuable they are to you has always been important. When you know who they are, more often than not you will act differently,” says Rolfe. “You tend to look after them, use their name when you see them; intuitively, you treat them better, because common-sense, commercial logic and human behaviour would tell us that these valuable customers will, more than likely, develop an attachment to your business and want to stay with you.
“They will spend more, more often, on more products. They’ll forgive your little mistakes and issues. They might even introduce you to their friends.”
Rolfe points out that owner managers, in the early stages of a business, find it a relatively easy process to keep track of issues – noticing when, say three customers stopped popping in so regularly, and especially if five decided to increase their spend.
“However, when you start getting 100, 200, 20,000 customers, having ‘customer intimacy’ like this is extremely difficult and near-on impossible. Most companies just take the easy road and treat everyone the same – but for those clever and successful ones, that’s where you step into the world of CRM.
“In our experience, it’s really important to have your vision sorted. You need to know what your unique proposition (USP) is; your budget; and the timeframe for delivering this.
“It is also extremely important to know one thing,” adds Rolfe. “Have you determined what makes a customer valuable to you, given that ‘value’ can take many forms, including evaluating both current and potential value.”
She says there are a number of criteria which indicate ‘customer value’ to consider. They are:
- Frequency of ‘shop’, spend of ‘shop’, recent ‘shop’ – known as the RFM (recent, frequency, monetary value) model.
- Tenure.
- Rate by which a customer introduces their friends (endorses your business).
- Channel integration (buys both on/offline).
- Participation in the brand (opens emails, visits or logs into website).
- Endorsement/advocacy.
- Low maintenance (not requiring service).
- Early adopter of innovation, open to change.
- Payment method (direct debit over invoice).
- Payment timeliness.
“Frankly, the decision on which CRM system to use should be a decision that is driven by what you need it to do specifically for your business – not by the per-email-send cost,” says Rolfe.
So how would she implement a system for an SME?
“The mechanics by which we deploy the CRM strategy may well in part consist of some element of technology or email. Or as likely, not. The solution might be outbound telemarketing or in-store service? For the businesses we work with, across the board, we are looking to help them regain that level of intimacy, understanding and closeness to the customer,” says Rolfe.
“We see it as an ASLR circle: acquisition [leading to] stimulation, loyalty and retention
“By working through these ASLR strategies (see sidebox) you can get to a point where you can weigh up where you want to spend your money as a priority, and this can be set against your budget. It also allows you to make sensible decisions about how you need to store your customer information; what you need to store; and ultimately the communications channels which will give you the best result.”
When does CRM deliver?
“Where CRM comes into its own,” says Greentree’s Dickinson, “is capturing the critical communication across all parties within your organisation and your customers working together. It’s not simply capturing the information so you have a real understanding of what has been agreed, but having system processes which ensure what you’ve agreed, really does happen.
“It is liberating to know that accounts, despatch, the service department, or whoever else in your business, has followed up with a customer exactly when they should have. If they haven’t, you are alerted to the fact and able to escalate this until action is taken.
“To your customer it can come across as a ‘soft’, nice-to-have part of your service delivery. The reality is that it is the hard edge between knowing you have a happy customer, or the start of a payment, delivery or performance issue which turns them into a victim of your failure to meet their expectations.”
Dickinson says Greentree has many examples of customers who’ve turned their CRM system into a real business tool. One Australian-based company is charged with testing water systems for disease. Depending upon the outcome of testing any one of a number of different responses can be deployed; failure to deploy these correctly could cost the company its operating licence and business.
“By embedding these requirements and process options into the CRM, it has successfully removed the opportunity for error. The same company also recognised its service footprint was virtually invisible to its customers; many were reluctant to pay for a service they never actually saw happen.
“The solution was simple – an email triggered by a clear result from the testing, automatically sent via CRM. Once customers knew the work had been completed the payment response time dramatically improved,” says Dickinson.
An example of CRM in action closer to home is PGG Wrightson’s deployment of the Microsoft Dynamics CRM solution, managed by Intergen, which recently won a Microsoft Partner Award.
“We were holding core information in our back office system and this wasn’t giving us the business benefits we wanted,” says John Skurr, PGG Wrightson’s national sales support manager. “It needed to be in the hands of our frontline staff. And, even more importantly, our frontline staff, our technical field reps (TFRs), were having vital customer interactions we needed to capture in the field, and automatically bring this information into our CRM system.
“We needed a mobile solution that would allow information to flow both ways and deliver the true business value we knew could be achieved for our Retail and Fruitfed divisions.”
PGG Wrightson’s sales reps travel far and wide to generate business and repeat sales.
Previously the company used manual systems to record customer interactions (their ‘Blue Books’ were famous in the industry), and paper product sheets to convey information. Call cycles were also manual – leading to inefficiencies, gaps in understanding, and an ordinary customer experience.
One outcome was the company often had to resort to customer surveys to update their data.
While Dynamics CRM in the back office maintained customer data, it was not actively used by sales reps and managers. That’s because Dynamics CRM could not be accessed by mobile devices, and was not set up to work well for sales. On the other hand, too much information was available, making it inefficient as a sales tool.
Intergen delivered a customised solution for the Windows tablet that pulled data from the back office CRM and other internal systems to display relevant data for each customer interaction. The data included customer fields, as well as recent sales and order history: data which had previously been either unavailable to the rep or out of date.
Intergen built a mobile Windows Store application delivering a modern, intuitive, user-experience, requiring minimal training. The solution works online and offline and integrates with other apps to enable meeting recording and photo taking. The solution became known as ‘Blue Note’ and delivered the following outcomes:
- A streamlined, standardised sales process, resulting in significant time savings and greater productivity.
- Rapid insight into customer behaviour and needs.
- Superior customer service, deeper relationships and more informed customer conversations.
- Immediate information capture and a single point-of-truth, with seamless flow of information between the frontline and the back office.
As Greenberg would say: “That’s impact.”
Kevin Kevany is an Auckland-based freelance business writer. Email [email protected]