Introduction to Customer Relationship Management

Transcription

1 White Paper Introduction to Customer Relationship Management Contents Introduction....2 The Decision....2 The Expectations....3 The Transition....6 The Results....7 About Ziff Davis B2B Ziff Davis B2B is a leading provider of research to technology buyers and high-quality leads to IT vendors. As part of the Ziff Davis family, Ziff Davis B2B has access to over 50 million in-market technology buyers every month and supports the company s core mission of enabling technology buyers to make more informed business decisions. Copyright 2013 Ziff Davis B2B. All rights reserved. Contact Ziff Davis B2B 100 California Street, Suite 650 San Francisco, CA Tel: Fax: marty_fettig@ziffdavis.com

2 Introduction The time when a company decides to move to CRM (Customer Relationship Management) tools marks their progress to professionalism and profit in multiple ways. This Introduction to Customer Relationship Management provides guidelines for companies contemplating this critical step in their development. Before computers, salespeople used a combination of manual tools to track prospects and their multiple contacts with those prospects needed to turn them into customers. These tools included yellow tablets, stacks of business cards with notes written on the back all bound together by rubber bands, and Rolodex cards. Haphazard methods like these guaranteed haphazard results, which is why many vendors leapt on the new PC as a means to organize the sales process. Behold, the spreadsheet appeared, and provided a new way to organize random scraps of data. That s the reason, 30 years later, far too many salespeople still use the spreadsheet as a replacement for yellow tablets, business cards, and a Rolodex. They may have moved chaos to a computer, but they have not accepted the philosophy of CRM as a way to drastically improve their sales and customer relationships. SFA (Sales Force Automation) software appeared soon after the PC, and helped organize many salespeople. But CRM is much more than just software: CRM done right is a new philosophy of handling customers throughout their entire life cycle from first contact to first order through multiple orders. Most salespeople looked to the PC not as a tool for CRM but as an easier way to handle scraps of paper, yellow tablets, and business cards. While SFA was a decent first step for many companies, those software applications focuses on the sales process, not the customer relationship process. Sales gets the most attention, but managing the customer over the lifetime of the relationship cycle provides a real revenue stream and needs many more tools than SFA software provides. The Decision Companies planning to grow and succeed realize customers are the lifeblood of their business in a more profound way than when they started, and properly managing customers becomes the key to long term growth. They begin to notice certain signs that indicate a step up to CRM is necessary in order to improve the value of them to their customers, and of their customers to them. These signs include the following, and more: Lack of insight into the sales process: Lack of insight into the sales process Haphazard reporting from sales people No clear sales funnel process to convert contacts into prospects then customers Inability to track prospects across social media ziffdavis.com 2 of 8

3 No consistency of customer engagement materials across salespeople Difficult to get a grasp on the total prospect pool across salespeople Salespeople competing for the same company through different contacts Losing prospect information when a salesperson leaves the company Notice these signs indicate a lack of something important: useful reporting, insight into the sales process, usable information about future sales in the pipeline, and the like. The best way to predict the future is to analyze the past, but in sales, if you have no prospect data to analyze, you re still just guessing. The three foundations of a good CRM system are people, process, and technology. Too many focus on just the technology and spend months analyzing minute details of competing software applications while their sales drift aimlessly. Smarter companies analyze the sales processes they have now, make note of where improvements are needed, and start building new processes with employee training as well as the software application. Technology is only one of the three successful lets of a CRM system. Sales managers start lobbying for a CRM system before anyone else in the company because they understand how critical the information they are missing is to future growth. But companies where the sales manager chooses and implements a system on their own have more program failures and waste than companies who gather a consensus between sales, marketing, IT, and the back office functions before moving forward. Everyone, from the CEO down to the newest shipping clerk must be understand how they fit into the new customer relationship management process-- whether they use the actual software or not. The decision to invest in CRM software is important. The decision to invest in a CRM initiative throughout the entire company is critical to continued growth and success. The Expectations Every major initiative like a CRM project creates wildly variable expectations among employees. Managing those expectations often becomes more difficult than managing the software installation. Take time to define the expectations each department has of the new CRM process, make sure they align with other departments and the capabilities of the CRM software involved, and make sure those who aren t behind the new project don t create unmanageable expectations. Keep a close watch on the CRM software vendor as well, as their enthusiasm for their product may outrun the abilities of your particular installation. ziffdavis.com 3 of 8

4 Here s a short list of some of the many things a Customer Relationship Management system will do for your company: Contact acquisition processing Conversion from contact to customer Establish the customer relationship Retain the customer longer and more profitably Establish the value of each customer Add cross-sell and upsell opportunities Improve close rates Reduce sales and marketing costs Improve customer service One way to solidify the expectations of all the CRM stakeholders is to carefully examine and record the sales management processes that are place now. This may be difficult if there are many manual parts used by individual salespeople, often in direct defiance of orders from management. Establish a non-judgemental team to document all sales processes as they are, not as how management thinks they are. Every salesperson will need to be involved, but their information can be gathered anonymously. In fact, the salespeople will be more forthcoming if individual names are specifically excluded from the report. If sales management is smart, they ll already know the preferences of the salespeople, which is often a major reason for the push to modernize with a CRM system. Once all major steps of all major salespersons are gathered and averaged to get a clearer view of your current processes, mark each against the three main stakeholders in the new CRM system: people, processes, and technology. A few of the expectations may be applied like the following: People Training New collaborative processes Processes Workflow changes Integration with social media Technology CRM software ziffdavis.com 4 of 8

5 Apps and shortcuts for mobile user access to CRM Each department will have some preparation for the new CRM system. One executive should be designated the CRM Pilot (or some other name that works for your company, like Champion or Advocate) and perform project management duties to coordinate all departments in all things CRM. Planning the contents of your CRM database and document management helps crystalize the expectations of all parties. The typical sales information, meaning prospects and their company names, along with all pertinent contact information, will always be in the CRM database. But do you expect your CRM to export shipping names and addresses, or connect with the customer delivery information inside your accounting software? Some software pulls data from the CRM to the accounting software, some pushes from accounting to the CRM, and some need a separate database both programs can access easily. Other information usually handled by the CRM: Account history Past sales Invoices Quotes Letters to the customer s to and from the customer Marketing materials Notes on customer conversations Notice several of these information sources exist in your company already, such as quotes, letters to customers, marketing materials, and s. Integrating those data sources within your upcoming CRM system takes planning, and perhaps some retrofitting if your company is larger. Details like these are why expectations must be codified before the project starts. Finding and managing these details will take at least two passes before the selection of the CRM software for your company. Even then, be prepared for this expectation on the part of some employees: We were sure you knew we needed this feature and didn t have to TELL you. Yes, they will ignore multiple s, announcements made during meetings, and direct questions when they lay some new feature demands on your desk the day after the software is installed. Expect a new focus on customer-facing software, best practices, and communications. With the proper preparation, customers should be the target of all these processes: ziffdavis.com 5 of 8

6 Marketing Inside sales Outside sales Order processing Management Customer service Sales support The largest expectation, and the one that will benefit your company the most, is the total overview of every customer engagement, every sales process detail, notes from every customer contact, and reports of which potentials are likely to become prospects and then become customers. Every department in your company will rely on this information, whether by using the CRM software directly or by receiving information from CRM reports. The Transition Here s the real-world segue from Expectations to the Transition to a CRM system: Expect a bumpy ride. The process rides a roller coaster: it s terrible, it s getting better, it s worse than we ever thought, we re finally home safe. The sales department, the group most affected by the new CRM system, suffers the most. Those who have used other CRM systems will complain because the system at your company is different than what they know. Those new to automated sales management software will complain because they must change work habits developed over years or decades, and change can be challenging. Salespeople often claim sales is an art, not a science. Treating sales like a science puts too much emphasis on contact metrics and reporting, and not enough on building personal relationships and trust. Objectively, this rings true because the relationship between a salesperson and the prospect triggers the transition of that prospect to a customer. However, salespeople forget that an automated sales process maximizes the time spent finding prospects and moving them into the customer category. Sales artists rely too much on personality and not enough on the process, and sales scientists go too far the other way. The right CRM system for your company will split the difference and make sure processes are followed to enable the sales artists to develop new customers while providing the structure necessary to keep prospects engaged until they are ready to move toward customer status. CRM software tracks every interaction with prospects and customers, and salespeople aren t used to that level of transparency in their work. Typical concerns of salespeople include: Others can see my prospects ziffdavis.com 6 of 8

7 Others can piggyback on my work and take credit CRM changes me from a sales professional into a data entry clerk Management must be sensitive to these issues and others during the transition. Stress that the goal of the CRM system is not to take away the sales job, but to support them and enable them to reach more and more customers. Sales managers often have a mixed reaction to CRM systems. On one hand, they appreciate the fountain of information about each and every salesperson and their activities. On the other hand, they suddenly realize other company executives can drill down into the sales process as well, meaning their own work processes are more transparent than ever. Just as salespeople can be overwhelmed by increased oversight by sales managers, sales management can be overwhelmed by other executives trying to micro-manage the newlytransparent sales process. Many sales departments face animosity from other departments ( why do they get to take customers to lunch when I m stuck in the office? ) and a CRM system lays bare the sales process. Smart management recognizes this potential point of conflict and prepares guidelines to keep other departments focused on their own work rather than jumping into the business of the sales department. Expect bumps when populating the new CRM with all the information about prospects and customers. Many companies force the salespeople to type in all the information, but that slows ongoing sales and makes the salespeople resent the new system. Get help from other departments, interns, or part-time typists for data entry. Transferring existing customer information to the CRM system will take at least two passes. Even if your accounting system spits out all data perfectly the first time, once into the CRM software you ll immediately find you should have imported the information slightly differently. Take two will go better, so budget your time accordingly. Finally, training the salespeople and sales management on the CRM system will speed the transition enormously. Train salespeople and sales management separately. If possible, offer one-on-one training for a time after the installation is finished. The more users dig into the CRM system, the more questions they will have. Follow up training sessions will provide a huge boost to sales productivity. The Results Finally, all customer information will be in one place, including social media interactions and call-center support (depending on the advanced features of your particular CRM). You will be able to see the entire sales acquisition process from initial contact through prospect to customer to long-term customer. That is the best result of the CRM process. While many focus on CRM for customer acquisition, the real value over time is in customer ziffdavis.com 7 of 8

8 retention. This is why we call it Customer Relationship Management rather than Customer Location and Acquisition. Numbers vary, of course, but a good rule of thumb is that a current customer is worth five times more than a new customer. Customer acquisition is important, but customer retention is profitable far and beyond the first sale. The cost of acquiring customers is high, but retention costs are low, even when figuring in the cost of the CRM to help you maintain the customer connection. Profitable companies retain customers and become more important as a primary supplier of goods or service every quarter. The way to find and connect to customers for the long term? Use Customer Relationship Management software and supporting processes within your company to bind your customers to you for their increasing satisfaction and your increasing profits. ziffdavis.com 8 of 8