Monday, July 29, 2013

5 Ways Effective CRM Solutions Ensure Higher Revenues

The world of business has changed significantly over the last twenty years. The information and technology era has exploded and the way companies market to and engage with customers is a completely different ballgame today. This is both good and bad -
Good – because there are so many avenues available to connect with customers (email, social media, mobile apps, plus good old fashioned traditional media and advertising).
Bad – because yours is not the only business doing it and finding a way to cut through the clutter is a challenge. 

At the end of the day, everyone has the same goal – to acquire customers and make sales.

How does CRM technology help increase revenue for your business? 
First and foremost, be clear on what you want from your CRM implementation. CRM software is a very useful tool, however, if not done properly, it will fail in helping your business and will be a waste of money.
Before implementing a CRM software, consider your goals and objectives. What do you want to achieve from CRM? Do you want more sales, better customer engagement, streamlining the overall business process, product feedback or insight into trends?

Ensuring optimal UX
There is an array of CRM products out there, from more simplistic systems to more robust ones. Take your time and shop around. Choosing the right one for your business is the first very important step.

1. Streamlining the sales process
No doubt that more sales mean more revenue. Improving the sales process and making it more efficient will result in closing more deals. 
This is one of the main functions of a CRM software – to better manage the end-to-end sales process.

So, if your business employs a sales team, you should not be without sales force automation software. This is like having a thoroughbred racehorse without a jockey – you have a horse packed with amazing potential, but, without someone professional to keep it on track and steer it to the finish line, it will be slower, more distracted and therefore take longer to cross that line.

So keep the process on track. Sales force automation efficiently manages the sales process from the point of initial contact with a prospect all the way through to closing the deal, its key benefits include:
  • 360 degree view of the customer
  • Contact and diary management
  • Account management
  • Lead generation
  • Clear sales pipeline visibility to manage opportunities
  • Highlights blockages in the pipeline
  • Fast and efficient quotes and orders
  • Improved sales forecasting
  • Reporting and analytics
2. Identify profitable and unprofitable customers
Have you heard of the term ‘customer lifetime value’? This is essentially referring to the overall value a customer brings to your business over a prolonged period.

There are highly profitable customers, i.e. those that buy from you on a regular basis and/or buy high-margin products resulting in higher profits for your business.

Then, there are unprofitable customers, i.e. those that buy infrequently or consistently and only buy low-margin products. High maintenance customers also fall into this category – the ones who come back regularly to complain about products or services or requiring further assistance, resulting in more time spent on this customer and a higher cost to the company to keep these customers.

CRM assists in differentiating between these two types of customers. Ideally you want to nurture relationships with customers who offer a higher lifetime value for your business as this will result in more profits; and weed out the unprofitable customers who are actually causing you to spend more money to keep them.

3. Marketing costs versus actual revenue gains
A lot of time, effort and money can get pumped into marketing, but are you able to measure a return on your investment?

Have your marketing campaigns resulted in:  
  • Attracting more profitable customers
  • Encouraging more sales for high-margin products
  • Better customer retention
Can you crunch the numbers - are you able to compare the actual costs that went into a marketing campaign with the actual revenue generated from that campaign to determine whether the campaign was successful or unsuccessful?

CRM helps you be more strategic in your marketing through efficient budget and expenditure tracking along with mail blaster delivery reports for analyzing successful/ unsuccessful delivery of marketing material.

4. Customer retention for higher profitability
All too often businesses focus primarily on new customer acquisition and forget to pay attention to their current customers. They are also oblivious to the fact that the cost of acquiring new customers is significantly higher than the cost of retaining current customers.

While landing new customers is always imperative to the success of a business, it is equally important to nurture relationships with current customers - this makes for much easier income generation.

Current customers are already invested to one degree or another in your company. After all, they have bought your product or service in the past, and if they were happy with the service they will be happy to buy from you again – unless of course they have forgotten about your company.

Tap this market to increase your revenue. Keep in touch with your current customers. Remind them that you are still out there. Reward them for being regular customers. Show them some love, and they are bound to return.

CRM increases customer retention through the following tools:
  • Building a customer database
  • A record of the customers’ sales history, frequency of buying and buying habits
  • Loyalty programmes
  • Improved customer service (feedback and complaints/ compliments mechanisms)
  • Direct communication (email, social media, text messages)
5. Product development and innovation
At the heart of your business are its products or services. Without a product that meets the customer's need, your business will suffer and is likely to fail.

CRM is very helpful in keeping track of trends and noticing which products sell well and which don’t. This enables you to improve existing products, drop ‘dead’ products and design new products that meet the customers’ needs mean more sales.

In conclusion
A business is a multi-faceted beast with cross-functioning departments that need to all be on the same page and talking the same language, from sales to marketing to procurement to customer service. In addition, competitors and external factors also exert pressure on a business and having a finger on the pulse is crucial. A well-placed CRM software can greatly enhance inter-departmental coordination in all these areas and sets up your business for success.

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