A couple of years ago, a customer asked us to meet to discuss how he could sell more and better using CRM (Customer Relationship Management). This company - which is a medium-sized industrial company - had heard about the CRM concept but was not clear if CRM is an IT tool, a work philosophy, a sales methodology… In short, they wanted to know if it could really help them in their particular case.
The initial situation
The initial situation of the company was a stagnation of sales in the last three years and with a tendency to fall in sales in the last six months. To remedy this, they had recently expanded their sales team to continue growing at the rates of years past. To do this, they wanted to expand clients and markets.
However, after the incorporation of this new sales team, they had realized that, if they do not manage the team optimally, instead of achieving improved results, what happens is that a certain lack of control is created in the sales force so that costs increase and revenues do not arrive.
The diagnosis
After doing an initial analysis, "typical" issues were identified in the sales and marketing areas:
- The sales team was very focused on administrative tasks since the company came from a position in which more than selling… it bought from them. In the diagnosis it was found that the commercial team dedicated 42% of their time to administrative tasks. There is no information for decision making. You don't even have centralized and managed information. It is not known what sellers do, how new customers are recruited, what is the level of customer satisfaction, why customers are gained or lost, what are their reasons for buying, if their prices are correct… and all that information that we usually need so much and that we almost never have. All the information was in the "head of the vendorss »with all the problems that this brings us on a day-to-day basis. There were no tasks related to prospecting markets, identifying new potential customers and qualifying them. There was no method for attracting new customers and simply "customers were coming." There was no perfectly defined price policy that guaranteed maximum profitability since there was no clear vision of costs and of the market price map. There is no correct definition of objectives and variable remuneration, so the Evaluation of the sales team teams and the calculation of the variable remuneration ended up being an odyssey. The commercial monitoring that was done was not efficientso there were often "business opportunities" that no one "followed" and were lost. It was identified that around 32% of the lost offers were due to poor commercial monitoring. The forecasts were based on information that was too subjective, random and "by imposition". There was no method to have visibility of the forecasts in the medium term; there was no real or adequate segmentation of the clients, that is, the clients are not known to be able to give them a personalized treatment and thus be able to sell them more and better. And some other problems that the reader can imagine along the lines of those previously discussed and how common they are to all of us.
After this diagnosis, CRM could clearly be the solution to many of their problems. If CRM can be defined as "the business strategy focused on anticipating, knowing and satisfying the present and foreseeable needs and desires of customers", then the CRM cycle is defined as the orientation of people, of the productivity of processes and the use of the company's resources in a logical, orderly, effective and efficient way aimed at selling more and / or better. Let's move on to developing the CRM cycle:
The CRM cycle is defined as the orientation of people, of the productivity of the processes and of the use of the company's resources in a logical, orderly, effective and efficient way oriented to sell more and / or better.
1.- Understand the markets and customers
I must have a system of integration and maintenance of data and information to really know my current and potential clients to know what their real needs are.
This information is basic to know how to sell more to current customers, profitability by customers, how to sell new products to current customers, know our position in the market, how to attract new customers, to detect new needs in new customers, to identify reasons for loss of customers, etc.
In this phase, the concept of segmentation widely discussed in previous articles is especially important.
2.- Design the Offer
After knowing the market, comes the stage of offering current and potential customers what they really need as well as defining the proper positioning of the company through tools such as product, price, communication, channel policy, etc.
At this point it is essential to understand that each client (or each group of clients or segment) has different needs and expectations and that we cannot treat the whole group in the same way.
Some are more sensitive to the price, others to the service, the brand, the quality, the innovation, the human relationship… There are dozens of variables in each specific case that must be defined to specify the offer for each customer segment.
Carrying out a procedure that automates these activities and implementing it in the CRM cycle increases effectiveness and efficiency, without a doubt.
3.- Sell
This is the third point and although it is very important we do not extend ourselves further in this section since it has been the subject of many previous articles but the elements to be handled would be the management of the sales force (its planning and control), the use of channels appropriate, the efficiency of the sales monitoring processes, the management of customer contacts through the different channels, etc.
4.- Finally, we must retain our clients
We must never forget that satisfaction, the essential condition is satisfaction. In our day-to-day work, many clients tell us about their concern to retain their clients when, in many cases, loyalty is only a more or less direct consequence of their satisfaction and the quality of relationships we have with they.
The key concept in this section is that loyalty comes from satisfaction and satisfaction will come from having correctly developed the previous phases of the CRM cycle, from knowing the needs and expectations of the client, developing a personalized offer and having successfully reached it through the channels and with the right messages.
Although all this strategy in the end must be supported by software… the software used is NOT critical.
After having seen the elements of the CRM cycle, and although all this strategy in the end must be supported by software… the software used is NOT critical. The computer application does not influence more than 10% of the success of a CRM project. culture change and people are the most important element followed by process management and the right CRM strategy.
The only really critical and important thing is that the company that carries out the project is a consultancy that understands both business and technology and that can ensure the success of the project, committing to the results achieved and leading the change both strategically as organizational and process.
Results
The results were overwhelming already in the first year:
- 12% increase in sales due to both the acquisition of new customers and the decrease in the rate of loss of current customers (by 36%). 21.5% reduction in business costs on sales due to the improvement in Productivity of the sales force. The profitability of the developed project was achieved in 8 weeks considering all costs (both internal and external)
