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Monday Mornings with Madison

MADISON COMMERCIAL REAL ESTATE SERVICES MADISON COMMERCIAL REAL ESTATE SERVICES
#82

CUSTOMER RELATIONSHIP MANAGEMENT, PART ONE

From the dawn of civilization, smart sellers have engaged in customer relationship management. In ancient times, if you wanted to succeed at selling produce, you would want to know who came to your local marketplace; what vegetables were most in demand; and which member of the sales team — perhaps your son, wife or nephew — was the most effective salesperson. Today, customer relationship management, or CRM, is just as important but it’s a bit more complicated.

In today’s world, CRM is defined as the processes a company uses to track and organize its contacts with current and prospective customers. CRM software is used to support these processes; information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing. With such software, you can follow and manage company activity at different levels, including:

Sales lead activity  CRM software allows you to create a data base of leads, track and measure what happens to them, and cross reference them in different ways.

Client communication  With CRM, you can create a central data base accessible across departments that records all contacts with clients, whether it’s via phone, post mail, e-mail or in person.

Vendor relationships  Similarly, you can track vendor relationships, keeping record of all contacts and accessing past orders and payments.

Analysis and Reporting   Using data in the system, CRM software allows you to generate a variety of reports. A sales manager or business owner can track how different teams are doing on a general level and can break down results by individual or by product, analyzing current results and comparing them to past or projected performance as measured by different variables.

The challenge today in CRM lies in this last area of analysis. Because of the Internet and all the new communications channels, customer expectations have changed significantly. Sales people need to master new skills but and existing software systems need to be updated to respond to these demands. Otherwise sales and management teams lack the right tools for analysis and evaluation.

Some important changes in customer expectations include:

Demonstrating vs. consulting   In the past, sales people used CRM to track how many people they visited, how many product demonstrations they conducted and where current and potential customers were in the buying cycle. Today, prospects are often already familiar with the available products and are not interested in sitting through a sales demo. Instead, they want the sales person to come in with an in-depth understanding of their unique business challenges and recommend very specific solutions to those struggles. In essence, sales reps need to offer free consultations, with customized plans for how products can be implemented, but existing CRM software is designed to track activity, not knowledge.

Creating communities  Sales people used to be seen as individuals with specific expertise about a company’s products or services. As long as the salesperson knew enough about those products or services, everyone was happy. Today’s customer expects the sales person to be an expert in the overall industry and be able to provide access to a community of related experts. Existing CRM software is not designed to manage and track the ideas and introductions/connections that customers seek.

New product development  Until recently, companies would come out with new products or services, and customers simply had to take them or leave them, with few choices and almost no customization.  As Henry Ford famously said about the Model T, “You can have it in any color you like as long as it’s black.” Today, customers expect every product or service to be fully customized to their unique needs. To sell successfully, you now have to engage your prospects, get their input on their use of your products or services, and then use that knowledge to create new products tailored to their needs.  Again, existing CRM systems offer little in terms of managing or tracking customized solutions.

The changes in customer expectations leave lots of opportunities for new and innovative CRM solutions. Until they arrive, sales people are challenged to work with the existing programs, while doing what they do best, which is to respond creatively to customers’ needs.

Next week, we’ll look at some of the practical challenges that companies face when implementing customer relationship management systems and offer specific advice on how to improve your CRM efforts.

QUOTE OF THE WEEK
"Consumers understand that they have a choice, but they have no idea how to decide." Sergio Zyman

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