Barry Ellis is fuming mad. He’s been waiting over 35 minutes, on his second call, trying to get answers to his questions from a national prominent airline. "The first time I called, I got into voicemail jail, press this, press that, so confusing. After 10 minutes I got frustrated and hung up. No wonder so many people no longer wait to hear the message and immediately press ‘0’." said Barry.

Unfortunately Barry’s situation isn’t an isolated one as many of us have experienced the same thing. Friends and business associates tell me about their experiences that involve banks, cell phone companies, software companies, government agencies and offices, and a whole lot more.

Companies (generally) are quite good at attracting new Customers. In fact, cell-phone companies are amongst the best. However, the key to retaining Customers is based on the Customer’s perception of how well the organization continues to provide products & services they want and how well they respond to queries and problems.

Today there is a both a philosophical and technological solution to this problem. It is called CRM (Customer Relationship Marketing). The principles of CRM are well known yet rarely embraced with enthusiasm. In addition there are some wonderful CRM technological solutions out there, one of my favourite (for small and medium sized organizations) is SalesLogix. There are others.

The purpose of a CRM system (whether or not it is supported with technology) is "Zero Defections". Our Customer loyalty research is very clear, about 2/3rds of every company’s Customers are somewhat ambivalent towards the organization and are prepared to listen to another organization’s offer.

As bad as this sounds, Customers don’t really care about you and your services, they only care about their wants and needs. Though they may, at some point, get to like you they will only do so when you have demonstrated your ability to care about them. And, consistently deliver on your promises. With the right CRM design, activities are focused around building a strong bond with Customers while making every effort to personalize and enhance the relationship.

Actually an effective CRM system starts from a philosophical basis (then supported by technology). Keep in mind that the technology employed by CRM does not constitute CRM. Any company that buys a technological solution without making the needs of Customers a high priority will be disappointed with the results. Sure the system will have the capabilities to do what it is designed for but making it work in your organization takes a tremendous amount of work. Work that pays off in handsome dividends.

Small businesses may not need the technology, but they do need to put the principles of CRM to work. The time when a technological solution will be needed become self apparent.

First of all every company should calculate the value of a Customer. For example, if a Customer typically spends $1,200 per year with your Company and they are, on average, a Customer for 5 years, then the Customer value is $6,000.00. A loss of 100 Customers is worth $600,000.00 to the company, scary numbers! Second, take a hard look at the practices and processes used by both the sales and customer service teams. Identification of inconsistencies and non-value added activities would be the priority. Third, calculate the potential increase in revenue if all sales people and customer contact personnel performed at a consistently high level of professionalism. Fourth, take a look at the reasons why Customers have left your organization over the past couple of years. Fifth, talk to your sales and customer service people. They know what is needed to really build a longer-term relationship with Customers.

Once armed with this information determining what CRM system would work best is so much easier.

Professionals, at all levels of the company can’t care about what they don’t know about. Therefore everyone who has any contact with Customers should have extensive information that they can access about the Customer and his/her experiences with the company. The right CRM system will facilitate the sharing of information needed to serve the Customer better.

Customer Relationship Marketing is a movement that is pushing businesses into seeing Customers as individuals and not as one large marketing group. It is about building a strong Customer bond that encourages the Customer to increase their purchase frequency and/or amount of purchase. If you haven’t embraced CRM, chances are your competitors have and you may be left behind. The right CRM system fosters an organizational-wide belief that every Customer contact point should be held sacred and handled in a personable, efficient and professional manner.

Feel free to use this article, just give credit where credit is due!
Copyright 1999 © Sid Ridgley