Archive for the ‘Customer Relationship Management’ Category

Forrester Research Post on Customer Satisfaction Surveys

Tuesday, February 23rd, 2010

I came across a Forrester Research blog post on Customer Satisfaction Surveys that I wanted to share.  I discuss several of their points in detail in my article entitled “Keys to a Successful Loyalty Program”.

However, if you don’t have time to read my full article, or just want to see who else shares these opinions, definately check out the Forrester blog.

Until next time, thanks for reading.

The Power of Customer Relationship Management (CRM) For Small Business

Tuesday, February 2nd, 2010

In my last post, I explained what a CRM system is and some of the many uses for both small businesses as well as larger ones.  While simply having and utilizing a CRM system can instantly increase marketing productivity and communications, in truth there’s a lot more to be gained by integrating the system with a CRM process or mindset.  When done properly, truly implementing Customer Relationship Management processes can help increase sales and marketing ROI, identify and retain your most profitable customers, and generally increase the profitability of your small business.

At its core, CRM supports the key business principle of customer segmentation.  The premise of segmentation is that not all people care about the same things and they don’t act in the same way.  If you don’t actively segment your customers, you’re hurting your customer relationships in several ways:

  1. You’re not treating your best customers as well as you should because you’re not presenting them with special promotions and perks
  2. You’re spending too many resources on unprofitable customers
  3. You’re incenting your customers to ignore you by barraging them with many communications they don’t find relevant

A CRM system will allow you to track customer behavior, demographic information, and details about their key interests.   Truly implementing CRM into your business means using that information to personalize and strengthen your customer relationships.  For example, let’s think about a non-profit who’s interested in generating donations and recruiting volunteers.  A very common approach is to send out a monthly newsletter informing everyone on their mailing list of key activities or issues.  Perhaps they also rotate requests between donating and volunteering.  However, many of the donors may be out of state or busy executives with no interest or history in volunteering.  Further, perhaps a subset of donors has gone dormant and hasn’t responded to mailings in over a year.  By understanding your relationships, you could save money by eliminating the volunteer request mailings to out-of-state donors and potentially eliminating mailings to dormant donors all together (or create a special phone campaign targeting donors that have stopped responding to mailings).  This serves both to increase your marketing ROI as well as strengthen your donor relationships by not pestering them with things they don’t care about.  There are countless other examples of how this concept can be utilized.  For example, periodically running a report of your most profitable accounts (which aren’t always the biggest) and having an executive personally call to check in and thank them can go a long way.  If you haven’t read my earlier post entitled, “Not All Customers Are Created Equal – Stop Treating Them Like They Are”, I encourage you to scroll down and take a look for some deeper discussing around the benefits of customer segmentation.

Again, collecting customer information is the first step and will improve productivity, but fully utilizing that information to personalize relationships is the key to drastically improving your business and profitability.  Until next time, thank you for reading.

If You Don’t Have A Customer Relationship Management (CRM) System, You Need One!

Thursday, January 28th, 2010

In speaking with many small businesses, it’s become very clear that a high percentage of business owners don’t know what CRM is, let alone have a CRM system and a process to use it.  With that in mind, here’s a brief overview of CRM systems.  My next post will cover some of the many ways to use CRM to give help your business a competitive edge and improve your profitability.

A CRM system is essentially a powerful but user-friendly database that allows you to track valuable information about your prospects and customers.   CRM systems are fully customizable and can store information like contact information, demographic profiles, product interests, past purchase behavior, contract details, and sales opportunity details.  They have powerful reporting engines that let you slice your data almost every way imaginable.  Some can even be integrated into your business website so when a prospect fills out a contact form, a lead with all their information is created in the system and it alerts you via e-mail.  You can also control access so employees can only see or edit appropriate sections.

There are many different systems, but my preference is for several reasons.  First, it’s amazingly affordable and scalable.  The most basic version is $60 per user per year (as of 1/28/10) and you can get a lot of great features for $204 per user per year.  Second, it’s an online model so you can access your system from any computer with internet access.  There’s no software to install.  Lastly, it’s simply a very powerful but intuitive system and you can be up and running in a couple of hours with some basic training.

A CRM system is valuable if you use it for nothing more than a central depository for tracking customer information.  However, that’s just the beginning.  In my next post I’ll discuss how you can really improve your business processes, marketing ROI, customer retention, and more by leveraging the full power of CRM.  Until next time, thank you for reading.

Customer Loyalty is Made by Emotional Connections

Wednesday, September 16th, 2009

I recently conducted a research survey where I offered participants a chance to win one of three $50 gift cards for completing the survey (an effective, cost-effective way to boost survey response rates).  A customer jokingly wrote back telling me that a competitor gave her a $50 gift card for completing their survey and it wasn’t fair that I was just giving her a tiny chance to win a gift card.  From her language it was pretty clear she was just teasing.  However, I wrote back telling her that I couldn’t stand to be outshined by our competitor and was sending her a $100 gift card to thank her for her participation and show her that I valued her business.  I also jokingly let her know not to get spoiled and expect this every time.  She wrote back saying that she was stunned by the response and thanked me profusely.  Odds are she told some colleagues and friends about it, and she’ll probably re-tell the story when she goes to spend the gift card.

The next time a competitor calls that customer trying to lure her away, they’ll have a much tougher hurdle ahead of them because now, my customer has a stronger emotional connection to my company and she knows she truly is a valued customer and we’re going to take care of her.

Companies like Enterprise Rental Car and Nordstrom have known about this concept for a while and have become very successful by developing practices to delight their customers.

It’s amazing how big an impression an extremely inexpensive gesture can have on someone.  Think about a restaurant manager walking the floor who overhears someone complaining to their friends about the glass of wine they ordered and swoops in and offers to bring them something else free of charge.  For just a few dollars, that manager can turn what could have been a festering, relationship-souring experience into a great experience they’ll remember the next time someone asks that guest for a restaurant recommendation.

Regardless of your business, there are countless opportunities for you to go above and beyond to delight your customers (especially your most profitable customers).  Think about how you would feel if the president of your big, faceless cable company called to personally thank you for your business – probably pretty pleased.  Your customers could feel that way about you.  Until next time, thank you for reading.

Not all customers are created equal. Stop treating them like they are.

Sunday, August 30th, 2009

How do you prioritize customer complaints or requests? I’m not talking about little things like a restaurant manager letting a customer send back a glass of wine he didn’t enjoy. I’m talking about more serious issues or request that will require real resources to implement like bringing back an old menu item you used to have or adding more cardio equipment to your gym or extending your business hours. Do you figure that if one or two people ask for it, you should probably do it? Perhaps you deal with the customers that complain the loudest or most often? I’d like to suggest that if you’re not taking into account the profitability of the customer making the request, there’s a good chance you’re making a mistake.

Think about your business for a minute. Does every one of your customers spend the same amount with you on products where you make the same margin? Does every customer refer the same amount of business? Do they cost the same to maintain through customer service costs? Whether you have 10 customers or a million, I’d bet good money that some of your customers are more profitable than others. In many cases, it’s shocking to see how much of your profit is driven by such a small percentage of your clients.

Despite the frequent reality of this situation, so many companies treat everyone the same (or worse, treat their most profitable customers the worst because they’re not the ones complaining). If you do a customer satisfaction survey (and if you don’t, read my next blog posting), do you break out the satisfaction scores and comments for your most profitable customers and take actions to make sure you’re scoring as high as possible with this group? For that matter, can you even identify who your most profitable customers are? And by the way, while your largest customers can often be your most profitable customers, I can promise you that’s not always the case.

I’ve seen this in both large companies and small businesses, but it’s extra important for small business owners simply because you have fewer resources to go around. If you allocate your customer service and development time/dollars equally, you’re under-serving and in turn risking the relationship with your most important customers. I urge you to take some time to think about your best customers and figure out how you’re going to delight them and keep them coming back.

For a deeper look into customer satisfaction and retention strategies, check out my Customer Loyalty White Paper. I hope you find this and my other posts interesting. I’d love to hear your thoughts on this post and on what you’re doing in your business. Until next time, thank you for reading.