How can Customer Relationship Management (CRM) practices help your organization in this economic downturn?

In an economic downturn, everyone is sailing in choppy waters, the real test for an organisation is to stay nimble and keep afloat. In a recovering and growing economy, everyone’s boat is at full sail, the test is if an organisation can outpace its competitors by growing faster, raising profits and gaining market share. We believe that in both scenarios, CRM plays a key role in the survival and growth equation by providing insights into customers and their behaviour when they use your products and services.

A customer-oriented organisation will recognise that a “business as usual” operating mode or doing nothing in a weak economy will be costly to your business and that cost reduction measures alone will not be sufficient. Rather, effective businesses will approach from the topline, aggressively driving value and profitability growth from your customers. Customers need to be viewed and managed as a productive asset: their value to the organisation increases exponentially as their relationship with the organisation grows and they are likely to help hedge your organisation against economic volatility.

Depending on your organisation’s level of maturity in engaging customers and readiness in customer centricity, CRM can enable one or more of your customer initiatives.

Identify and get more out of your best customer. Not all customers are equal. Some are greater revenue generators than others. If your organisation can focus your limited marketing, sales and service resources to deliver exceptional service and complementary offerings to these target customers, you can uncover cross-sell and up-sell opportunities and lift the average revenue per customer. Increasing wallet share of this select group of customers will also take a shorter sales cycle compared to acquiring a new customer.

Focus on high potential leads and make them your customers. To maximise investments in marketing effort and campaigns, adopt a systematic approach to managing your sales leads, target your efforts in identifying and engaging prospective customers that are closest in making the purchase. This will require a thorough review of your sales approach to maximise your sales conversion process.

Review processes and leverage on existing investments. Organisations that previously invested in CRM systems may not have fully utilised the systems’ features. Explore the feasibility of “switching on” these features to facilitate your operations. If you feel that your CRM system has not met your expectations, examine your customer processes. You are unlikely to experience the full benefits of a CRM solution if you merely automate poorly designed processes or fail to align the solution’s functionalities to your processes.

Start building capabilities in customer management now. Any business that deals with customers or work with partners cannot deny making customer centricity as the core of their business. But if all the above are difficult to execute in your organisation or if you are new to CRM initiatives, you can start with building foundation in CRM. Make customer centricity a strategic initiative in your organisation and plan towards realising the value of your longer term customer vision as a sustainable competitive advantage.

There is no better time than to start now- Think big but start small. Begin with understanding what CRM exactly entails, learn the proven practices in customer management, study how CRM relates to your business and achieves your strategic and operational goals, discuss with your colleagues, plan for and refine your CRM execution strategy. Your effort in building a strong focus and foundation in customer management will later be rewarded with higher CRM success compared to many others who rush directly into implementing a CRM system.

Regardless of the types of CRM initiatives you choose to embark on, you cannot afford failed CRM projects in this weak economy where business survival is at stake. Seek external assistance if required to get your initiatives right.

The actions you have taken and the investments you have made during this period will equip you with deeper insights to your customers and allow you to stay ahead of the competition. Your efforts to continuously enhance customer experience will harvest value from loyal, profitable customer relationships and prepare you to emerge faster and stronger in the next economic recovery.

- by Customer Capital Consulting Pte. Ltd, 2009.

All rights reserved. No part of the above materials may be reproduced or distributed without prior permission of Customer Capital Consulting Pte. Ltd.