The What & Why of CRM
What is CRM? – “A way to FIND, GET, and KEEP customers. "
Abstract - "CRM is in large part companies realizing that they have to sell the way their customers want to buy."
Definitive - "CRM is a complete suite of customer and business intelligence applications. It enables the analysis of critical data for customer acquisition and retention costs, marketing campaign performance, product and customer profitability, distribution channel performance and customer service."
Why is CRM important?
Business Perspective
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E-com Companies spend $250 marketing to acquire a new customer. Gross revenue from that customer is $24 first quarter and $52 each quarter afterward
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65% of online shoppers abandon their carts because they run into a problem and can't figure it out.
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CRM accounts for 28-60% of the variance in companies return on sales.
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Service leaders: grow twice as fast, can charge 10% more for services and enjoy 12% return on sales (vs. 1%)
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After researching the best way to approach a new client, prepare account plans, etc., finding a new customer is 5-15 times more expensive than keeping one. This means a 5% increase in customer retention can result in a 25-85% increase in profitability.
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68% of customers who walk away from a relationship with a vendor do so because of poor customer service.
Find, Get, Keep customers (revisited)
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Superior service means customers return, buying more often and in greater quantity (plus referrals!).
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Customers want to interact with companies through via phone, Web, e-mail and face-to-face methods. Companies must integrate all these to respond immediately without the need for the customer to explain time and again.
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Over time companies upgraded from snail mail to call centers, voice response units, Internet, and e-mail. These systems are not integrated and cannot meet customer service expectations. Think of the last time you called about your VISA.
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Companies must quickly change business actions to target new customer segments, and have a short reporting cycle to truly respond and interact with customers and their needs.
Efficiency
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It costs money to have service people hunt for information, make 2nd and 3rd phone calls, dig through cabinets, and pore through catalogs.
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Inefficiency means a greater number of staff are required to handle the same number of interactions, slower response times, and more dissatisfied (and disappearing) customers
Competition
Communication
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The right hand of companies really doesn’t know what the left hand is doing. CRM helps bridge these gaps by connecting all company systems.
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CRM provides management more, quicker, and better information about sales opportunities and the pipeline. Through better analysis and comprehensive, easy reporting, management can get a better handle on the productivity of the sales organization and analyze the effectiveness of the sales processes in place.
Examples
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You demand your rental car be ready for you within minutes of your arrival at the airport, that you receive your preferred size and style of car, that the appropriate corporate discounts are already applied according to your contract, that the frequent flyer miles are posted to your designated airline, and your selections for supplementary insurance are correctly calculated. You make the reservation to a call center in Oklahoma with travel beginning on the east coast and ending on the west coast.
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A woman purchased a car, and several days before the scheduled delivery date she got a call from the sales manager at the dealership. The manager asked a few questions about where she usually drove, what kinds of music she listened to, etc. She answered them not really knowing what this was about until the day she picked up her car. To her delight the dealership had supplied her with maps of the regions she had referred to, and her radio was preset to stations corresponding with the music she indicated as her preference. This woman became a customer for life.