3 Ways to Recession-Proof Your Business with CRM
Despite the pressures of an economic recession this year, along with indicators reporting technology spending taking a downturn, the market for Customer Relationship Management (CRM) software is expected to continue steady growth.
One of the reasons for this is that a CRM system can be a valuable tool for companies to leverage to turn the trend. In a recession, CRM can be viewed as a Company Recession Management tool, providing ways for companies to guard against the typical pitfalls of recessionary thinking. In fact, the value of CRM has recently been proven by AMI-Partners, a research fi rm specializing in market intelligence for small and medium-sized businesses. Their research shows that companies with CRM systems out-perform those that don’t by over 140% higher revenue per employee. With this level of performance, CRM is clearly a must-have during a recession to get more out of every staff person.
In this whitepaper, Maximizer Software identifies three ways to ‘up’ the downturn and get a leg-up on competitors with the help of CRM:
1. Return to the Customer
2. Automate Customer-Facing Processes
3. Use CRM for Cost-Effective Marketing
1 – Return to the Customer
What happens in an economic downturn? Money gets tighter. Decision making slows down. People get panicky. But good management looks at recession as a time to cut waste, streamline processes, reduce the cost of general administration and operations, and focus on the fundamental assets of the business that drive revenue. With this in mind, your existing customers are your most valuable asset. The cost and eff orts associated with customer retention, loyalty and growth of wallet is far less than the cost of customer acquisition: engaging a new customer can cost between six and eight times the cost of reaching an existing customer. Concentrate on programs that make doing business with your company more rewarding for customers, to convert satisfaction and loyalty into increased business.
Complete the customer picture Customers today – especially those you have had a long relationship with – expect that your company knows who they are, what they have purchased and what kind of service requests they have made in the past. If your customer service reps and sales reps have to ask questions to which they should already know the answer, you need to complete the customer picture by making CRM a truly strategic tool. Collect as much information on your customers in their CRM profi les as possible. Use online social networking tools like LinkedIn and Jigsaw, to gather additional information and identify additional contacts to engage with to expand the relationship and show your client that you truly understand and empathise with their business. In addition, updated demographic data makes customer segmentation and profi ling easier for the marketing department that can then create personalised communications and off ers, far more likely to succeed.
Combine information from your accounting and shipping systems into your CRM system. Ensure phone, face-toface and written communications with all customer-facing staff are logged in the system. These details will help customer service and sales reps create a culture of focusing on seeing the experience through the eyes of the customer. Customers will breathe a sigh of relief that they don’t have to provide basic information and past history over and over again to spend their hard-earned money with you.
Focus on profitable customers and increase wallet share
In a downturn, use CRM software to identify and target loyal and profitable customers. This approach will allow you to increase revenues through existing customers rather than the more expensive proposition of chasing new ones. Identify customer segments that will spend more: those that are less price sensitive, have a strong vision of your product that they can communicate within their networks, and consume fewer resources with your company. This may not be an obvious group, such as industry or customer size. There may be behavioural factors to analyse, such as brand loyalty, buying patterns, close relationships with your staff , and passion for your product. For example, use your CRM system to identify customers that purchased item A, who then also purchased item B, with fewer than 3 post-sales support calls logged. Analyze the similarities with those customers to identify new targets and messages.
Once you identify these segments, target them with unique, personal offerings. Cross-sell additional products that complement or enhance the original product purchased, or offer services that help them get additional value. Targeting profitable segments with personal offerings through marketing campaigns will help increase revenue and build long-term, successful relationships that will get you through the downturn.
Restructure to focus on customers
To incent sales and service staff to focus on customers, consider implementing a different structure of responsibilities and incentives that are aligned with customers. For example, train service staff on selling additional products and services. Instead of ending a service call with simply ensuring satisfaction, train your staff on identifying opportunities to suggest other products and provide a script with putting this off er forward. Identify sales staff that have strong relationship-building skills and assign them to call on existing customers or key accounts, and remove new prospects from their list of responsibilities. Build in rewards for retaining loyal customers and selling more products, and detract points for lost accounts. Design customer loyalty programs to provide discounts or advantages to customers that spend more with you.
Implement referral selling
CRM systems can also help sales people and customer service reps keep track of who knows who. Depending on the kind of product or service your organisation sells, you can leverage that information into a referral. No matter what the purchase size, most people listen to their colleagues and friends when making a buying decision – especially in cautionary times. Often, a “colleague” may be considered a person in a similar role or industry that they identify with. So if you know that one of your current customers is a colleague of a new prospect, or if you have satisfied customers in the same role in the same state as the new prospect, ask for their help in a new sale by acting as a reference. For lower end, high-volume products, you can develop incentive programs for your customers to become your sales force for you. Offer future discounts for referrals and give them further discounts if the referral comes through with a sale. Implementing these types of processes will allow your team to focus on maximizing customer assets and capitalising on opportunities in an economy in which every £ counts.
2 – Automate Customer-Facing Processes
If you’re faced with staff reductions, use CRM to achieve the same results with fewer staff by automating manual processes. During good times, inefficiencies can develop simply because the money exists to keep doing business as usual. In a downturn, you need to streamline and automate processes to leverage every staff member’s hours. Start by identifying the workflow bottlenecks in your organisation and automate part or all of the customer-facing processes that slow your business by being performed manually – especially if it means you can improve the experience for the customer. Not only will this enable you to get more done with less, but system-enabled processes ensure no room for human oversight or error, and your customers will reward you.
Here are a few examples of processes that can be successfully automated with the help of CRM systems. Design workflows to standardise and streamline these critical customer facing activities, automate repetitive tasks and enable the consistent execution of marketing, sales and service processes to ensure your business practices and response times work as they should.
Eliminate cut-and-paste reporting
Often, staff spend time daily or weekly, preparing reports for sales and service managers who need insight into account activities, field reports, sales forecasts, and case resolution status. People often create reports by cutting and pasting information into spreadsheets to email to managers, who then spend time rolling up a summary to share with the executives.
Eliminate this wasted time by automating the reports you need to drive business forward. Not only will you save time, but reports will be more accurate as well. Instead of relying on sales people or administrative staff to manually prepare reports, capture the information in your CRM system, and have reports automatically emailed to you on a daily, weekly, or monthly basis. Better yet, create a dashboard view of key performance metrics that are updated in real-time, so you don’t have to wait for the end of the week to see your sales pipeline status or customer service case resolution status. At a glance, a dashboard will enable you to see where your business is, at anytime. This gives you the opportunity to fix potential problems more quickly and to spot opportunities before your competitors.
One company was able to save 35 hours a week of an administrators’ time, by automating reports previously collected and distributed manually every week. The staff person was then able to redirect her time and energy to more valuable activities focused on building relationships with customers, rather than compiling data.
Be alerted to every opportunity
In a downturn, when every dollar counts, you need to ensure your staff is maximizing every opportunity. Yet, you don’t have the resources, time, or means to ensure everything is being followed-up on. Instead of spending time checking up on everything, or sitting back and hoping that nothing is slipping through the cracks, automate monitoring to get the confidence and insight you need to ensure success.
You can set up processes in your CRM system that track customer interactions and monitor the flow of work and business activities at any stage in the leads, sales, or service cycle. For example, when every customer and every £ counts this month and this quarter, you want to make sure that every prospect is optimised. In your company, that might mean every email, phone, or web inquiry must be followed up by your sales department within 24 hours. Then ensuring your representatives follow the guidelines for asking the right questions during the qualification stage, and setting appointments with hot prospects. CRM systems can monitor every lead, every stage and every task assigned to sales reps.
Identify which areas are critical for you to ensure nothing slips through the cracks in your business. The same monitoring can be applied to customer service cases or long sales cycles. Business activity monitoring or workfl ow automation technologies used in conjunction with CRM software ensure people follow the step-by-step approach to sales and service success. When they’re not, the system will alert you via email to notify you of activities that are not taking place, and opportunities that may be slipping through the cracks.
In this economy, don’t leave the selling process up to individual sales people. Successful companies use structured sales methodologies and CRM to model a winning systematic sales process that will generate more revenue per person than companies without an automated selling methodology.
Sales methodologies and CRM systems allow you to win more deals by focusing on the best practices from your best people. Whether your company is missing a methodology, or the one you’ve tried isn’t working, start by understanding and documenting the steps that the best sales people have taken to win a deal. Then, as you are establishing a common set of practices for the other sales people to follow, keep in mind that the methodology should meet the requirements of “your selling environment including customers, competitors, economic conditions, the market into which you are selling, and the capabilities, traits, and behaviors of your sales people. Start by keeping it simple. Incorporate the winning steps and strategies into every deal, for every sales person using your CRM system. The CRM system can help you through every step and activity throughout the sales cycle, to ensure every sales person is incorporating the established methodology. You can even use the CRM to monitor sales performance against compliance to measure individual adherence against success rates and get people back on track when their results are lack luster.
Turn requests from the field around quickly
When demand is high, supply can lag with little consequence. But when demand is low, you need to meet customer requests as rapidly as you can. Often, to obtain a quotation or follow-up information for a prospect, a sales rep in the fi eld will send an email to the offi ce to get additional price sheets, ask about availability, or pricing for custom features. Consider implementing a mobile CRM solution to help facilitate immediate response. When field sales reps have the means to look up customer account history, documents, contracts, or inventory information using a handheld device while on site with the customer, they’ll be able to get an immediate answer, get a contract into their hands, or tell the customer whether or not their order will go through immediately. Providing reps with better access to information in the field will reduce the sales cycle and give customers a great impression of your company.
Consider customer self-service
During tough times, initiatives such as customer self-service, which reduce costs and grow business without growing staff , become popular. If your company sells low-cost or easily confi gurable items, why not let customers place orders for themselves online? Moreover, why not enable customers to get answers to their frequently asked questions, and submit inquiries and help requests – all online? This saves them time and reduces your costs because it will reduce calls to your 0800 customer service line. Today’s customers prefer this approach too, since they can browse items as they like without the pressure of a sales person.
3 – Use CRM for Cost-Effective Marketing
Despite the near knee-jerk response for companies to reduce marketing budgets in an economic downturn, that’s one of the last things companies should do. Consider that all of your competitors are doing exactly that. Moreover, numerous research reports underline that those who maintain and boost marketing spend during a recession emerge from the downturn in a stronger position than budget-cutting competitors. While competitors back away, if you continue to market, you’ll spend less money to reach an unsaturated audience. However, trade shows and other costly customer acquisition program may have to take a back seat to other less costly tactics or customer-focused campaigns. This is the best time to employ relatively low cost tactics that your CRM can help you manage.
Reduce costs with email marketing
Building stronger prospect and customer relationships is what email marketing is all about and it is a relatively rapid and cheap method of connecting. Using CRM software that includes workflow automation and an email campaign engine, your company can harness the power of one-to-one, personalised communications. With a built-in email campaign engine, even small and medium-sized businesses can automate when the system sends emails, to which groups, then track and analyse the success of campaigns through metrics such as click-through rates, lead conversion, and ROI per campaign. When looking for a CRM solution with email marketing, there are varying levels of sophistication and associated costs. Some CRM systems have built-in email marketingengines that eliminate costly fees from service providers based on per-email fees. A builtin email marketing system, will enable you to direct your marketing budget to other demand generation and lead nurturing activities.
Invest in what works
Campaign management and marketing analytics, while always important, become even more so when competing for scarce marketing resources. Marketing will surely feel more pressure from executives to demonstrate better insight into return on marketing investment in a more challenging economy. Use CRM systems to close the loop from lead to customer. Find out defi nitively where the best leads come from, sales cycle timing, first deal size, and then monitor subsequent cross-sales for indications of lifetime value by target market. Being able to track return on investment means marketing can spend money on proven techniques and campaigns, rather than continuing to fund unfruitful activities.
No one looks forward to operating a business during a recession. However, the fiscal discipline a downturn can impose can lead to some real opportunities for you to outperform competitors. Implementing and harnessing the power of a CRM system can help your company benefi t from the challenges of recession by leveraging the value of your existing customers, helping you standardise and automate critical processes, and take advantage of cheaper, more measurable marketing tactics and techniques. When every customer and every £ counts, every shift in tactic can reward you in being a stronger company after a recession. Start by taking a renewed look at your corporate strategy in marketing, sales, and customer service. Are you more focused on new customer acquisition or customer loyalty and repeat business initiatives? Shift your priorities to be more customer-focused, and review your staff structure, incentives, processes, marketing campaigns, and budget alignment. Discuss this with other customer-facing managers and executives to identify which areas, if changed, would provide the highest return on your investment of time and resources.
Contact Maximizer Software to discuss how you can use CRM software with these processes to help strengthen your company through a down economy.