Businesspeople know that it’s more cost-effective to keep a customer than to acquire one. They also know it’s easier to sell to a prospect actively looking for a solution than to a prospect unaware he even has a problem.
These basic business concepts, combined with advances in software application and delivery, have driven the adoption of customer relationship management software that lets companies differentiate themselves through customer knowledge. By understanding each unique customer’s needs, CRM-enabled salespeople deliver more effectively to customers and their own companies’ bottom lines.
Businesses are moving quickly to leverage their CRM investments. According to Mary Wardley, director, e-commerce software and CRM applications at International Data Corp., a leading technology intelligence and analyst firm, “Despite the current economic downturn, end-user organizations continue to rate CRM as critical to their organizations’ ongoing business strategy.” IDC forecasts that by 2005, the worldwide CRM market will grow beyond $14 billion.
Yet many CRM-enabled companies ask: “Now that we’ve made the CRM investment, how do we attain the efficiencies and returns we expect?” Success hinges on accurate, timely and appropriate information spanning the customer lifecycle from targeting sales leads to customer acquisition, retention and customer extension.
Most CRM installations lack the critical piece of the customer information pie: internal customer data integrated with value-added external business intelligence. Technology services integrate access to real-time, relevant corporate, industry and market intelligence – maximizing the CRM return on investment.
Information is key to upgrading the average salesperson to a customer-savvy, sophisticated specialist. These technology products empower salespeople with daily information on their customers, their markets and their industries so they can target customers more accurately, closing more profitable business faster, retaining customers and expanding relationships within accounts.
CRM gives companies an excellent framework for managing customer relationships. Adding industry and business information to that framework lets companies achieve a deeper, strategic customer understanding, which transforms the sales process. With business intelligence technology products, the sales force can:
· Identify and focus on your higher-profit prospects.
· Concentrate on the best accounts and build preferred supplier relationships.
· Keep up-to-date on changes in their prospects’ accounts.
· Manage accounts to their full potential, not just short-term results.
To demonstrate how external information empowers CRM, let’s break out each of the four steps of the customer lifecycle.
1. Selection. The customer relationship lifecycle begins with prospect selection and identification. With accurate prospect knowledge, your sales team can focus on the best prospects for your products/services. You can find prospects based on the attributes of your best prospects such as title, job function, industry or numerous other criteria. Once you identify your target prospects, your sales teams are empowered.
Business information integrated into the CRM system eliminates outdated information and inaccurate data, letting your team identify better, more qualified prospects. Better prospects enter the sales process, and effort is focused on more qualified opportunities. The results are increased sales, increased order size, increased revenue per salesperson and decreased costs per qualified lead.
2. Acquisition. In my work with sales executives, I’ve heard several common complaints, including: “My sales team can’t make a case for our solution versus the competition. I’m losing head-to-head sales. We have to discount to close the deal.” This is where online business intelligence delivers best.
A sales force with greater prospect intelligence can show its product’s unique value to each specific customer. This efficiency shortens the sales cycle while providing leverage against discounting. Real-time news and help in monitoring trends informs your sales staff of new legislation, revised product lines and restructuring. With online business information, you can build more compelling proposals by showing an intimate understanding of the client’s business and improve call-to-sale conversion ratios.
3. Retention. Retention is the critical stage in the lifecycle, given that the cost to acquire a new customer is three times or more the cost of retaining an existing customer. An ideal CRM system will monitor customers, prospects, industries and competitors to ensure that salespeople proactively communicate with customers and address their constantly changing needs and concerns. Such a system relies on accurate, timely and integrated business information.
Online business intelligence ensures knowledge of critical customer situations, such as changes in personnel, updating of financials, expansion plans, new clients and partners, and competitor information. With this knowledge, your salespeople can proactively return to customers to solidify relationships, address new needs and deepen the relationship across buying groups. Such proactive customer relations decreases loss rates while increasing the lifetime value of your customers.
4. Extension. This final stage of the customer lifecycle can have the largest effect. Once you’ve won the business, you’re in the door. Now your sales force can take advantage of cross-selling opportunities, extending the relationship across the corporate family or even to partners. It’s more efficient to sell to existing, happy clients than to find new ones.
The key to extension is identifying and penetrating your best accounts. Information helps the company know its customer better and sell additional products and services within the organization. Business analysis and needs reassessment can identify opportunities to upsell, cross-sell and increase average order sizes. For example, a new partnership or merger may allow extension of your existing customer’s contract.
By understanding the corporate structure, your salespeople can leverage customer relationships to penetrate the organization and reach the goal of becoming a standard across an enterprise.