Customer or Profit? A Case for Customer Relationship Management (CRM)

In practically everything I do, I’m a customer, and I expect the businesses I patronize to put me first. But my expectations often don’t stand up against all the financial reasons the companies have for doing things other than the way that’s best for me. And I understand that.

I came across an article this week written by Alison Bond, and she makes a compelling arguments for how doing things that are right for your customers, does not have to be different from doing what’s good for your bottom line.

Alison Bond,is a director of The Halo Works Ltd., is the author, with Merlin Stone, of Direct Hit (Financial Times/ Prentice Hall, 1995), The Definitive Guide to Direct and Interactive Marketing (Financial Times/ Prentice Hall, 2003) and Consumer Insight (Kogan Page Ltd., 2004). She is also visiting fellow at CSEM, a partner of Brunel University.

Bond builds her argument on the difference between transactional metrics and customer-aligned metrics. Morrison tells how customer feedback can make your business more efficient. And Johnston illustrates how you can use customizable software to improve the service you give your customers and build you business.

At the end of the day you must be able to measure key aspects of your business to be able to make the correct business decisions.

One of the first mentors I had when I got into business was a Quality Assurance Guru, his name was W.Edwards Deming. Dr. Deming was hired as a consultant by 3M and I had the privilege to work with and learn from this Great Business Leader.  (Here is the link to learn more about Dr. Deming http://en.wikipedia.org/wiki/W._Edwards_Deming)

Well, one of the things I remember Dr. Deming preaching, was if you can’t measure it you can’t change it.  This is one of the first things I tell businesses that contact me for help in their business, and one of the reasons I am such a proponent of Customer Relationship Management (CRM) and products that help make this function almost effortless.

This article below helps point out the importance of tracking your customer every step of the way.

I hope you enjoy the reprint of this great article by Alison Bond

Have the Customer at the Heart of What You Do and Your Business Will Benefit

By Alison Bond, The Halo Works  The Halo Works Ltd.

An organization goes in the direction of its measures, or at least it tries to. That is why it has measures. So for example, if an organization has a target to make a profit, the people in that part of the organization will shape themselves around the need to make that profit. If everyone in the company is focused on that profit target, that will be the staff’s primary concern.

However, it often doesn’t work like that. The extreme cases like Enron are classic examples of a target driving behavior in a negative way, but there are plenty more.

Say you are a creative business and hire a bunch of creative people to service your creative hungry clients. You, then, focus your creative people on profit. What effect does that have on their creativity? Does it make them more creative, or does it divert their attention away from the creative process and end up giving them creator’s block? What has this got to do with giving the customers want they want?

‘Company Y expands to hit its target of 50 vans but, sadly, runs out of money.’

We have worked in this area for many years, and we know that an organization that sets transactional targets such as how quickly representatives answer the phone or how many sales calls agents make are more likely to end up busy. Organizations follow their measures. But does being busy make your business better? We know from our work that busy is more likely to create a desire to “work the system,” which can create a climate that contributes to a move away from the customers. What we have found—and this is not rocket science—is that if an organization measures benefits and focuses on those, it will end up with a positive organization. A positive organization will want to focus on the customer because there is no benefit not to. But positive benefits include:

• Attracting and keeping the best people. There are not too many customers, or staff for that matter who are committed to making your company rich, but people do like to feel that they have made a difference.
• Attracting and keeping the best customers. People buy benefits. Customers are keen to realize the benefits they expected to gain from your product or service in a tangible way.
• Removing the temptation to match numbers with expectations. This eliminates one of the biggest drivers to contravene normal corporate governance rules and focus away from the customer.
• The organization will have a real and positive reason to sustain itself. This is because the reason for existing will be more than just profit. It will be a about doing things that help the customers and the staff members be the best they can be. This always benefits the customer.

Which company is going to be the most successful? One in which everyone is focused on profit? Or one where people are focused on the benefits the business provides? All our work has shown that the profitable businesses are the ones who align themselves behind the benefits they sell. Yes, they measure profits, but the main focus is on an alignment behind the core business they operate. Employees stay, and the customers are loyal.

A question we often are asked is how come Company X is doing so well while Company Y is struggling. Company Y appears to be working hard. You see its advertising or its vans driving around. But suddenly it goes out of business. Was it just unlucky? Can any organization just go bust? The good news is that it is not bad luck that forces companies out of business. It is a devotion to the wrong things, and being too successful in following those things.

Company Y might have set itself a target for growth, something like 50 vans on the road by the end of the next financial year. Company executives will, then, do everything it can to hit their target, including borrowing money, taking on slightly unprofitable contracts and not always paying attention to the service the company is providing. They are focused on a volume business, not a quality one.

Their customers, though, want something different. They do not care how many vans the company has. They want their parcels on time and delivered by people they trust. This is what Company X does so well. Company X focuses on quality, not just in its mission statement but also by what it measures. Company X executives think 50 vans would be nice, but the firm has only 32 really reliable drivers. So what is the point of 50 vans? A reliable driver delivers a reliable service. So Company X stays smaller and makes very good profits, and Company Y expands to hit its target of 50 vans but, sadly, runs out of money and has to close its doors.

Company X takes on 20 of Company Y’s drivers, 18 of whom prove to be very reliable. It gets some of Company Y’s customers, too, and has its best-ever profits. It was not luck. Company X is run by a team of people who know exactly what their customers want and the characteristics of those who can deliver what their customers want. They measure those things and stick with them. It makes Company X successful.

Being customer-focused allows Company X to do the “right” things for the customer. It is much easier to do the right thing when the organization is aligned behind the benefits that the organization sells and when employees are encouraged to provide those benefits and are measured on that. Ultimately, being customer focused is good for business. It may not meet a short-term target for mega-growth, but long term, clearly aligned customer focus will make organizations successful in a way that swift forays into the World of a Fast Buck will not.

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If you’ve been in business for very long, you already understand how difficult running your own business can be. There are employees to manage, customers to wow, and overhead to maintain.

What usually happens is small business owners get so caught up in running a day-to-day marathon that they don’t take the time to put a system in place. However, without a system small businesses owners:

• Must Work Harder
• Must Work Longer
• Lose potential Sales
• Often Make Mistakes
  

No matter what type of small business you own, implementing a system is critical to effectively manage your company.  Think about how quickly fast food restaurants are able to serve their customers, Consider how smoothly employees at an amusement park, like Disney World, get people through the lines and on to the rides.

It is because they have perfected a system, that works…  Michael Gerber, the e-myth guru, recommends that we work “On-our Business” and not “In-our Business”.  The only way to do that is through a system.

When a business owner takes the time to put functional systems in place, they:

• Work smarter
• work faster
• Make more money
• More accurately fulfill customer needs

Don’t trudge through the chaos.  Systemize  your company and watch how easy managing your business becomes.

If you want to grow your business instead of just manage it, then you need Automated Follow-up Marketing and the software to do it for you. Discover the difference.

Ever have a situation where you have been in a planning meeting and everything seemed to be going very well…but in the end, never amounted to anything, no decisions were taken, back to zero again?

Chances are you’ve been caught up in something called “Analysis paralysis”. In other words, good ideas have been presented, but by the time enough people consider and reconsider the situation, everything seems so much more complex, now.

The ideas that were presented were not as great as you originally thought. Worse yet, in most cases, a conclusion about what course of action to take is never reached.

But, guess what? There is such as thing as “over-thinking.” In sports, analysis paralysis might keep an athlete from reacting quickly enough. In politics, analysis paralysis might cause a simple issue to be debated for years. And, in business, analysis paralysis can keep business owners from moving forward in some pretty amazing opportunities!

Thinking over things is good…   “Analysis Paralysis” in not good….  It comes from a place of “Fear” in the decision making process.

Benjamin Franklin, who is considered to be a pretty clear thinker…  recognized that he often had the same problem of “Analysis Paralysis”.  The easy decisions are just that easy…..  either yes or no and then getting on with the task of putting things into action.

He found there were times that the situations were not that clear, and he needed a simple way of deciding the best course of action, so he devised a list what is now called the Pro’s vs the Con’s List.  He would make a large “T”, on a piece of paper and on the top of one side he would write “For” and on the top of the other side he would write “Against”..

He then listed all the reasons “For” and then all the reasons “Against”…  now the easy part…  just total the all the “For’s” and then all the “Against”.

The highest number WINS and you move on to the action taking process…

I know some are thinking…  BUT, there are something’s that are more important than other’s, and the list should be weighted some how!!!!…

Well Benjamin Franklin realized that did not matter…  What really matters is just making the decision..

Once that was made then all of the resources were then put into motion to MAKE IT HAPPEN!  And it becomes the correct decision..  Interesting!!!!

In Sales we used to call this the “Benjamin Franklin Close”….

To avoid analysis paralysis:

• Quickly jot down the pros and cons of an idea. (Make the Benjamin Franklin List)
• Make a decision (If an entire group is deciding-take a vote, Actually The Benjamin Franklin process takes away the need for a vote.)
• Write out the steps required to follow through.
• Assign the steps.
• Follow through.

You didn’t become a Creatrepreneur (entrepreneur) to become a hesitant decision maker. By following these steps, you will make good, well informed decisions. Some will work out and some won’t. But, at least you won’t miss out on BIG opportunities!

If you find it difficult to be a decisive person, remember this, “The success is not in the decision you make; the success is in HOW you deal with the decision you make.” Make your decision and then go to work to make it the right decision. It usually will be the correct decision in the end…

Some of the feed back I have been receiving indicates that people are not always receiving my CRM Tips that I send out and because of this feed-back I have archived the past CRM Tips for easy access here Past KJ Barrett CRM Tips Archive

I have also been asked to post the CRM Tips here on my blog…. so I have also done this… This allows people to make comments and provide more direct feed back on these CRM Tips.

Thank you all for your feed back and enjoy the latest CRM Tips from KJ Barrett & Associates…

Did you know that your customers and prospects are being bombarded by over 3,000 marketing messages a day? That’s a lot of messages. And, in order to avoid information overload, they’ve trained their minds to completely ignore those messages.

Once you discover the steps to leading your customer to a sale…you can easily overcome those marketing filters.

I receive a lot of information via email from a lot of people. I relay on the internet and email for valuable information. I have people that I know and trust that send me great information that I can pass on with my own slant on the topic.

How do people get their messages to me? Well it boils down to these four easy steps, and they have followed these steps. Now, here are the steps to gently nudge your prospects towards a purchase decisions… exactly what others have done for me.

Step 1- Get to know them. When you know a lot about your prospect’s, your messages become much more targeted. Which gets your prospects attention. And, your prospects will feel as though you truly care about them. Keep in mind people do not like to be sold, but they love to buy. Create rapport with your prospects.

Step 2- Follow up consistently. When you consistently and effectively follow up with your prospects, your message will eventually sink in. In a previous CRM Tip, referred to this as “We can not control when people will buy, we cannot and should not force them to buy… our responsibility is to be there when they do decide to make a buying decision, and that is through “Open, Regular, Quality Communications.”

The statistics show that most companies stop following up after four contacts, and most purchases take place after seven contacts. So our responsibility is to be around when our prospects do decide to buy.

Step 3- Offer your prospect value. Every marketing message out there is an attempt to get your prospects money. Imagine how you’ll stand out when your message does more than make a sell. It educates, engages, entertains and/or helps your prospect in some way. Value does not equate to the lowest price. Price is only one part of the Value Equation.

Step 4- Value your prospects. Once your prospect becomes your customer, don’t abandon them. They need the same attention you offered them as a prospect’s. Offer that same personal attention and they will become a raving fan! This is one of the most important and I am sorry to say the most overlooked step…. I call this step building a “Loyalty Ladder”….. and you will be surprised how many people they will send your way.

If you’ve been reading these messages consistently, this will sound very repetitive to you. However, these are fail proof methods for turning your prospects to customers and your customers to raving fans. And, that is worth a whole lot to your bottom line!

And CRM Strategies from Infusionsoft can help you automate the Sales and Marketing Process. “Working Less for More Sales and Profits!”

You can Now give Infusionsoft a trial run at no cost for 15 days….. and with the new pricing structure choose from three different versions to meet your business needs, with NO UPFRONT SET-UP COST (They have been waived)… From Basic to the Pro…. CRM implementation could not be easier and cost effective.