“It’s ten times easier to retain an existing customer than to attract a new one.” This is a cliché in business, mostly because it’s true.
Even in sectors such as vehicle sales or construction, where a sale can generally be considered to be a one-off affair, cultivating healthy relationships with customers can have surprising benefits, such as leading to word-of-mouth publicity you may not see the fruits of until months down the line. If you supply essential material to the same buyers regularly, or have ventured into the world of online sales, understanding your customers and constantly strengthening your links to them becomes critical to your success.
Customer Relationship Management
Most businesses already use software to keep track of their accounts and inventory; one of the best reasons for this is that these packages usually provide business intelligence (BI) in a condensed, useful form. For instance, your ERP package may advise you on how to schedule orders to optimize both stock levels and cash flow, while accounting software might suggest how to manage customer credit accounts better. This frees managers from the task of looking at every single invoice and line item, and make data-driven decisions without suffocating in detail.
Customer relationship management (or, CRM) software offers similar automation when it comes to controlling and understanding relationships with individual customers, or groups of them. One way to think of it is as an incremental improvement on storing customer data in a database or spreadsheet, which automatically interacts with accounting software, email programs and mobile or web apps. If implemented correctly, it will prevent you from trying to sell snow to Eskimos, and can even identify sales leads for future follow-up.
How it Works
You will probably find that you have some customers who buy the same quantity of the same lines every month, while others’ orders change frequently. Either category, depending on your industry, might be a good prospect or up-selling or cross-selling. Some will be in the habit of spending a little, often, while others could be buying in bulk, occasionally, taking advantage of volume discounts.
These kinds of differences in customer behaviors can be pointed out by CRM software, showing you which customers are most profitable, which accounts can benefit from additional sales attention, and more. These suggestions will be based on objective data instead of opinions or personal relationships. Classifying your customers accordingly will allow you to target marketing efforts most effectively, thereby increasing sales. Leveling up your customer service will help your business.
Some Benefits of CRM
Customer Retention: Customers leave suppliers for all kinds of reasons; but the emotional and experiential aspects are often ignored. As one example, buyers who find a given website difficult to use are often willing to pay 10% more at a competitor. On the other hand, getting a customer to spend more than he expected, for something he didn’t realize he wanted, can actually keep him coming back for more.
Targeted Marketing: Instead of sales staff phoning every customer once a month to ask how they are, CRM software can collate data on previous interactions and invoices to make more focused efforts possible. You can identify your most profitable customers and accounts with future potential.
Instant Overview: Using a “dashboard” kind of display, you can easily see the status of every customer: when they last ordered or phoned, what their project and payment status is, etc. Especially for service businesses, not having to keep all this information in your head can save a good deal of time.