Lost Customers can Jump Start Your Sales!

As I am reviewing one of my latest webinars, “Transforming the service Department: 3 Insights into Achieving Happy, Profitable Customers Through Service,” I am reminded that while there are many ways to improve customer service and increase customer retention, one of the best ways is to seek out complaints.

CRM reduces customer complaints
I’m not talking about putting a complaint box on your receptionist’s desk either. I’m talking about actively contacting your customers (preferably your best customers) and asking them what your company could do better. I am assuming your customer already likes your product or service, and that’s why they are your customer; I’m thinking you may want to direct them to specific process and communication areas.

You see, there are several surveys out there that talk about why customers leave and in each survey the results are in the vast majority that customer leave for “service problems”. In multiple articles you will see similar results, usually between 68% and 70% of the time customer service is listed as a reason for customer defection. Here are a few articles that chart this out:

http://www.customerthink.com/blog/5_steps_to_better_customer_loyalty_cus…

http://marketingjournal.blogspot.com/2005/12/why-customers-leave-part-1….

http://www.focusedmarketing.info/customers/why-do-customers-leave.html

http://clientk.com/2009/01/25/why-your-customers-leave/

So you get my point. Customers leave based on a feeling. They don’t feel you appreciate them. They don’t feel like they matter. They don’t feel like you pay enough attention to them. The list could go on and on!

Since about 70% of customer retention is based on a feeling, the best way to find out how to make a customer feel good is to ask them what you can do to improve. Ask in relation to processes like:

• Order placement
• Order processing and notification
• Order fulfillment
• Order delivery
• Post delivery communication
• Overall communication throughout the process

When they share an idea for improvement, seriously consider it, as they are giving you a way to retain them longer as a customer.

The good thing is that 90% of customer retention is about communication. Be proactive in your communication (especially about negative communication – price increases, late delivery, back-order) etc. and you will have a customer that “feels” your company.

One more tidbit. You most likely have lost customers because of them not “feeling the love.” Well, according to “Customer Winback – How To Recapture Lost Customers – and Keep Them Loyal” by Griffin and Lowenstein, you have a 20-40% chance of closing a sale to a lost customer. This twice as good as your odds of closing a sale to a prospect. Therefore, if you want to boost your sales quickly, review the customers you lost over the last couple of years, determine which ones you want to invite back, and call them and ask them what you can do to win their business back. Then it’s simple, make the change and invite them back.

The better news is a CRM system, implemented in line with your business strategy, can help. Here are a few ways CRM software may help your business:

• Gives you a single source for all customer related data
• Allows you to track and manage and respond complaints and service requests
• Alert you related to your customer
o Next service due
o Follow-up calls
o Change in average order size
o Change in total sales – rolling 12 months
• Alert your customer on your behalf
o Order entered
o Order status updates
o Delivery notification
o Service issue follow-up

Luke Russell 

Resolv, Inc.

Link to me on LinkedIn

Follow me on Twitter

Join Resolv on Facebook   

Back to the future … SaaS vs on-premises CRM

I cannot count the number of times that I have reviewed the pros and cons of SaaS (cloud computing) or on-premise CRM alternatives, so I am going to share my thoughts in this blog post. 

 

Cost: 

First let me cover cost.  Many make the argument for SaaS based on cost, stating that SaaS is less expensive.  While that may be true for the initial outlay (usually one year of service for SaaS vs all licensing for on-premises), the actual reality is that after 3 years licensing is roughly equal (see charts one and two and compare the three year costs).  However, the sticker shock comes in year 4 when SaaS is 3 ½ times more expensive each and every year.  My recommendations on cost are as follows:

Go with the CRM that meets your needs (on-premises or Saas) since 3 year licensing costs are very similar

 

If you like the idea of spreading your payments out over several years, but on-premises seems to be a better solution, consider leasing the software.

 

Infrastructure:

This is where SaaS shines!  If you do not have servers or updated workstations/laptops, an on-premises implementation my be costly in terms of hardware.  All on-premises CRM systems will require at least one server (a database server like Microsoft SQL server), and many require multiple servers. 

Integration:

This is where on-premises shines!  If you are looking to implement true enterprise-wide CRM, you will be looking for data integration into your back office at the very least, and quite possibly other sources of customer data as well.  Linking to invoicing, orders, and accounts receivable is not the easiest thing to do in a SaaS environment.  While it is not impossible, it frequently requires more time and resources to set-up the links and build the tunnels to allow access.

Along the same lines with integration is automation of processes and alerts.  This is a very difficult thing to do with some SaaS models.  If the software does not include an alert engine or process automation you are stuck.  With on-premises you can augment any CRM system with automation and alerts provided by such products as Vineyardsoft’s KnowledgeSync (http://www.vineyardsoft.com/).

Speed of Implementation:

This is an “old wives tale.”  SaaS only CRM companies make it sound like SaaS can be fully implemented in 24 hours and on-premises takes years.  The truth is that the time to live is about equal for both.  Just because you can have a database live up in the cloud in 24 hours (which can be done for on-premises as well) doesn’t mean you have CRM.  There are many things that have to happen before CRM is live.  These include, but are not limited to:

  1. Initial discussions of needs and layout of the project plan and goals
  2. Data source cleansing, data import, duplicate removal
  3. Customizations and configurations to match your needs
  4. Testing
  5. User education

Connectivity:

SaaS has one draw-back here.  In order to access the data you must be connected to the internet.  The speed of access is based on your internet connection speed and the number of users accessing the web at that time.  Other people using services like Netflix and Amazon movies can cause internet speed issues and actually cause your access to CRM to be less responsive.

Conclusion:

As I stated earlier, go with the CRM solution that will best help you meet your Customer Relationship Management strategic goals.  Infotech Research Group (http://www.infotech.com/) gives the following guidelines you may want to consider:

Choose SaaS CRM if…

·         There is no executive support or CRM strategy and you need something in the department right away.

·         You need to speed up implementation timeframes.

·         You need something right now that can grow with you quickly as needed. A lot of organizations that went through a failed big-bang CRM are trying SaaS, but are doing so cautiously and want to see results before they try to roll it out further.

·         You have too few IT staff available to administrate the system in the long term.

·         You have no disaster recovery plan for CRM data so keeping it on someone else’s locations seems smart.

·         Little offline capability is required.

Choose On-Premises CRM if…

·         There is a legislative/regulatory requirement to host your own data or keep it in a certain jurisdiction.

·         Complex data integration with large data volumes is needed. Info-Tech’s survey suggests that customers are still having trouble getting the kind of tight integration mid-large size organizations need. Solving that is key for SaaS products to continue to move up market. Data integration is tricky enough to begin with, but there are many factors that complicate it further, such as large data volumes integrated across the web and firewall configuration issues.

·         You want to align CRM with your existing ERP vendor and the on-premises product is different or superior.

·         Heavy offline capability is required.

 

Luke Russell 

Resolv, Inc.

Link to me on LinkedIn

Follow me on Twitter

Join Resolv on Facebook   

 

Where Does Loyalty Begin?

As I prepare for tomorrow’s seminar I am reminded of the similarities between a relationship-driven sales process and the dating/marriage cycle.

 

If we assume, in this comparison, that marriage is akin to the first sale, when the prospect moves to “customer” stage, then we can also assume, much like dating, that loyalty to one another begins prior to the marriage (first sale) step.  How many of you would be married right now if there was no commitment from your spouse prior to the marriage?  Probably very few! 

Assuming the pre-marriage relationship cycle is first date, courting, and engagement (or lead recognition, qualification/discovery, verbal commitment in business), I think I’m safe to say that somewhere in the middle of courting, and definitely before engagement we expect fidelity from our partner.  In fact we do things that encourage fidelity in the relationship.  First, we talk about it; second, we agree that, for the time-being, we believe that we are good together; and finally, we act with that fidelity in mind.

Should it be any different in business?  No!  We need to start talking and acting like we are looking for loyalty in business.  How do we do this, prior to the sale?  With actions like:

  • Seek to understand the problem
  • Make your prospects problem your problem
  • Talk about your loyal customers
  • Talk as if you are already “together”
  • Listen more than you talk
  • Don’t sell your service/product but offer them as solutions to a problem

 Much like personal relationships, there are things that we do that let our prospects know we are not serious about looking for a loyal relationship.  Many companies fall prey to the transaction sale.  Actions similar to the following show that you are more interested in a transaction than a relationship:

  • Discounting your product or service
  • Selling features and functions verses benefits
  • Leading the sales process with a demo of your product/service before even seeking to understand the problem
  • Offering incentives to use your product/service

Loyalty starts far before the “sale” and your words and actions speak volumes on how much you value loyalty.  Likewise, if you start out with transaction-driven sales, you should not expect loyalty from the prospect once they become a customer.

 Luke Russell 

Resolv, Inc.

Link to me on LinkedIn

Follow me on Twitter

Join Resolv on Facebook   

IT in charge of CRM implementation?

This is the second of three posts related to the “Been there, done that” thinking of Customer Relationship Management.

Let me begin by saying I have the utmost respect for IT people!  If you have never lived in the IT world let me give you a quick glace at what they face on a regular basis:

  • Computers and computing systems have become business critical, so critical that many IT people are on call 24 hours a day 7 days a week
  • Most upgrades and installations are scheduled for nights, weekends and holidays
  • IT is frequently blamed when things don’t go well or when a computer/system fails, and they are seldom praised when things work
  • Technology and software is changing at an alarming rate, and many IT people are expected to be experts on all software systems, the moment they come out

Why am I telling you this?  Because, even though your IT people work hard at keeping your systems up to date and functioning, they may not be the best people for driving customer-focused change within your organization. 

I am frequently asked “isn’t software selection and implementation the job of our IT department?”  The answer to that is no.  Your IT department should have input into the software selection process, but they should not be making the selection.  The selection needs to be made based on your company’s CRM needs, and should be made by someone that is customer facing and that will ultimately be using the software.  While you may have the best IT department in the United States, they are still IT, not sales, marketing or customer service.  They do not talk to the customer, and most likely do not understand Customer Relationship Management from your business-strategy point-of-view.

As far as implementation of software, it is task of IT to assist in the CRM software implementation, but I would not ask someone who is unfamiliar with a product to implement it.  The goal would be to have the consultant implement and train the IT in the support and maintenance of the CRM software.   The main role IT in the CRM implementation is to help with the data integration to other systems and to ensure the data integrity of the links between CRM and other systems.

Remember, implementation of software is just a small component of a CRM system implementation.  The other areas affected are your business culture and process. 

Luke Russell
Resolv, Inc.

Link to me on LinkedIn

Follow me on Twitter

Join Resolv on Facebook

12