"The Royal Treatment" continued.
How Can Firms Benefit From
CRM?
Customer loyalty is at record-low levels. "Customers are voting with their feet when they don't like what they get," Lee says. "Customer churn is becoming a fact of life. It's hysterically expensive to replace lost customers. Businesses that are winning in today's economy are those that can keep their customers and maximize the potential of relationships with them."
Often, businesses incorrectly view reduced operating costs as the main benefit of CRM, Lee says. Businesses are driven to initiate CRM because of economic changes that have placed customers in the driver's seat, not because costs are out of control, he says. The real benefits of CRM are positive changes in customer behavior, reduced churn rates, increased customer satisfaction and higher "share of wallet," Lee says.
According to the Harvard Business Review, a 5 percent increase in customer loyalty can boost profits 25 percent to 85 percent. Successful CRM projects increase customer loyalty by 10 percent annually for three years as measured by wallet share, Goldenberg says. For example, document management firms that successfully implement CRM see a 10 percent annual increase in account penetration. Likewise, companies that successfully implement CRM improve customer satisfaction by 10 percent and improve customer retention by 10 percent annually for three years, he says.
CRM also provides firms with
better knowledge about their customers. "Everyone that touches the
customer--whether they're in sales, marketing or customer service--has the same
view of the customer," Goldenberg says. "The customer doesn't have to hear, 'I'm
in the sales department. You'll have to speak to customer service.'" Since CRM
allows businesses to have a clearer picture of their customer bases, they also
can acquire new customers more easily because they know how to better target
those firms, Loftis says.
CRM also improves internal
business processes by helping firms structure contact management, account
management and other processes that help them more effectively manage
relationships with customers. For example, CRM software allows sales reps to
input details of each communication with a customer and allows them to easily
"remember" that information when it's needed later. A firm's marketing
department can reduce mailing costs and increase response rates by using CRM
software to launch targeted direct mail campaigns to customers and prospects
based on products, market segments, location and more.
Companies that successfully
implement CRM also enjoy increased productivity because all departments share
one source of client information. In fact, firms will experience a 10 percent to
20 percent annual increase in productivity per system user for three years,
Goldenberg says. "If you work a 40-hour week, you'll get back four to eight
hours of free time," he says. As a result, a firm's revenue also will increase
between 5 percent and 10 percent annually per user for three years, Goldenberg
says.
In addition, successful CRM
implementation also reduces general marketing, sales and customer service
administrative costs by 10 percent annually for three years, Goldenberg says.
"Costs drop because you're spending money less foolishly," he says. "You're not
sending brochures out to everyone." CRM allows businesses to better target
customers and prospects for promotions.
CRM also helps firm's improve
employee recruitment, satisfaction and retention because employees tend to
gravitate toward businesses they feel have the most support and the best tools,
Cecil says. "Most importantly, it really does make salespeople and
customer-service people far more productive, far more profitable and, therefore,
worth more money to the employer," he says.
oger Buck, CDC, isn't ashamed to
admit he doesn't have a perfect memory. "I don't have enough memory in my brain
to remember everything I need to be a good sales rep," says Buck, national sales
manager of forms divisions for manufacturer Ward/Kraft Inc., based in Fort
Scott, Kan. "I tell people that ACT! is my memory."
Seven years ago while working for
another manufacturer, Buck purchased ACT! software to keep track of clients,
telephone conversations and prospects he met at trade shows. Today, Buck's three
ACT! databases store approximately 18,000 contact names. (One ACT! database can
handle approximately 10,000 contacts.) He upgrades the software each time a new
version is released.
For Buck, using ACT! is a daily
ritual. "The first thing I do in the morning is open my email and my ACT!
program," he says. When Buck receives a phone call from a contact, he
immediately opens that person's record to view details about their last
conversation. He then is ready to enter useful information about the client, his
or her family, his or her firm and primary competitors, markets the contact
sells to, and more. During one phone call, a client mentioned that he and his
wife would celebrate their 50th wedding anniversary in a few months. Buck
inputted the information into ACT!, then set up a reminder for five days before
the date. On cue, ACT! reminded Buck about the anniversary with a pop-up message
on his screen. He purchased an anniversary card and mailed it to his client.
"He's not going to expect that at all because he probably doesn't even remember
mentioning it to me," Buck says.
ACT! also allows Buck to send targeted mailings to contacts. For example, the program includes grouping functions that allow Buck to sort customers and prospects based on products and vertical markets. If a client mentions that he's working with a hotel on a new project, Buck adds him to his hospitality vertical market group with two clicks of the mouse. When Ward/Kraft introduces a new product distributors can sell hospitality clients, Buck uses ACT! to send promotions to everyone in that group. He merges the names and addresses into a letter template, uses his office Print-to-Mail unit to print, fold and seal the letters, then drops them in the mail. "I may only mail out 100 pieces whereas in the past I would've mailed out 1,000 pieces hoping I'd get a hit," Buck says. "It's a rifle shot as opposed to a shotgun approach."
Buck also uses ACT!'s scheduling features to schedule phone
calls, meetings or other tasks such as follow-ups with clients who received
samples. ACT! reminds Buck about these tasks with pop-up messages. When a
reminder appears, Buck highlights the contact's name and clicks a "go to"
button. ACT! displays the contact's record. He can call the contact, click on a
fax icon to send that person a fax, or click on the person's email address to send an email. Buck also subscribes to an area code updating service that allows him to instantly update incorrect area codes listed in his database.
Recently, Ward/Kraft underwent a sales structure change, placing Buck in charge of four sales reps. "The first thing I did was go out and buy ACT! for all four of them," he says. Soon, ACT! will be networked, allowing the four sales reps to share contact information. "A lot of people get CRM software and end up using it strictly for a phone/address book," Buck says. "It's a much more powerful sales tool."
hen Mike Morgan started
distributorship National Printers Group in 2000, he was determined that his firm
wouldn't face the same problems that plagued his previous employer. "It was just
total confusion
day in and day out," Morgan says
about the five years he worked as a sales rep at 10-person distributorship. "We
didn't know where jobs were or what was going on with them. You would call a
customer and ask if you could come by and pick up an order, and they'd say,
'I've already given it to someone else at your company.'"
Morgan wanted to address those
communications issues before they damaged credibility at National Printers
Group. When he started the distributorship, Morgan maintained some of his
previous accounts. "They were willing to try us out, but if we started having
problems, they weren't going to stay with us," he says.
After soliciting advice from
other industry pros on DMIA's principals-only broadcast email system, Morgan
purchased GoldMine® 5.7 Business Contact Manager for his 3-person
distributorship in Corpus Christi, Texas. GoldMine is networked on the
distributorship's computer system, enabling everyone in the firm to share
information on approximately 300 of the firm's customers, prospects and
manufacturers.
Previously, if an end user called National Printers Group with questions about a job when its primary sales rep was out of the office, the customer had to wait for a return call from the sales rep. Now, anyone at the distributorship can handle the call. "It's nice when a customer calls and everybody knows immediately what's going on with the account," Morgan says.
National Printers Group uses GoldMine to track client referrals and account activity, including job statuses and details of meetings, emails, faxes, phone conversations and voice-mail messages. After every communication with clients, sales reps input details of the interactions into customers' records. GoldMine automatically dates and time-stamps the information. National Printers Group can send and receive email messages in GoldMine, allowing emails to be linked directly to customers' records. The distributorship also can use GoldMine to fax clients general information and promotions, including manufacturer discounts.
National Printers Group uses GoldMine's calendar feature to schedule dates when quotes need to be ready for customers and reminders to send product or service information to clients who requested it. Sales reps use the software's alarm feature to remind them of appointments, telephone calls they need to place and other tasks they've scheduled.
National Printers Group also uses GoldMine to send first-contact letters, promotional packets and thank-you letters to customers. For example, after returning from a sales call, a sales rep can open GoldMine and easily merge customer information such as name, company and address into a thank-you note template. Then, he or she can print the letter and an addressed envelope on a desktop printer. "Before, I'd sometimes hesitate to send a letter to a client because I couldn't remember if I'd already sent one," Morgan says. Now, GoldMine keeps track of each letter, packet and fax customers receive.
"Life is so much easier now that everything is in GoldMine," Morgan says. "It really does make a difference. It has raised us up a notch or two above our competitors, and it has enabled us to look better in the eyes of our clients."
