Transforming your one-time buyers into lifetime customers
Many people use strategies and tactics interchangeably but anyone with military experience can tell you they’re different. The senior management usually defines strategies, while the middle managers and those who execute employ tactics.
This section covers how to distinguish between strategies and tactics in the design and implementation of your customer relationship management (CRM).
It’s important to understand how both strategies and tactics work together to build a solid company with principles of CRM. Your leadership guides high-level strategy to unify your team, while the knowledge of effective tactics to reach your goals makes that happen.
Coming up with effective strategies
Strategies are high-level, macroeconomic ways of looking at how to keep your business competitive. They take larger forces into consideration and tend to focus on the ‘why’ of the business.
Before you embark on your journey to build a CRM, you must have a solid strategy in place. Part of that strategy is answering these questions:
Market forces: Are competitors in your industry emerging? Are they a threat? Are they targeting your customer base?
Resources: Do you have enough employees? Are they getting enough education and training? Is their morale high? Are they sharing information with each other, guarding it for control over others or fear for their livelihoods?
Investment: Are your people equipped with the right tools? Are they comfortable where they work? Do they have access to the training materials they need? Are they compensated when they are training?
Brand: Does your brand convey what you do? Does it have a personality? Is it a personality that helps or hinders sales?
If you’re unable to answer these questions or feel as though the answers don’t give you confidence in your organisation, focus your CRM on addressing these issues.
Using effective tactics
Tactics, on the other hand, are about what happens every day at your business. They involve the tools people use and how they use them. Usually they are more about the ‘how’.
These questions focus on the day-to-day operations and you want to have good answers for them.
CRM: Are you managing every aspect of your customer lifecycle? Is it easy for your team to access the data they need to get their jobs done? If your sales and support teams are talking to clients, do they know enough about those clients to provide great service?
Outbound communication: Are you using all the right channels (for example, email, print, pay-per-click ads) to reach your leads and clients? Are you measuring performance?
Funnels and conversion: Are you tracking how people progress through the process of purchasing from you? If they’re leaving, why? Are you following up with them? How long is it taking for people to make the purchase decision?
Are you able to automate and/or personalize any of these interactions?
Access to relevant information: Can your salespeople track what their leads are doing? Do they get alerted when their leads show signs of wanting to buy? Does your customer service team see how your clients absorb the information you send them? Does your marketing team have access to sales- and support-related data that could help them segment their communication?
Measuring of ‘effective’
The word ‘effective’ can have many different meanings, so it’s important to take the time to make sure what it means to you.
Effective – Adequate to accomplish a purpose; producing the intended or expected result.
Efficient – Performing or functioning in the best possible manner with the least waste of money, time and effort.
The difference between effectiveness and efficiency can be summed up shortly, sweetly and succinctly – Being effective is about doing the right things, while being efficient is about doing things right.
For example, for a sales manager, having reports that track how many calls lead to connects, how many connects lead to demos and how many demos lead to deals can be an incredibly powerful indicator of which of your reps are not only effective at their jobs but efficient in performing them.
An effective CRM means you do more with less, with the data easily accessible to back that up.
Finding your success
Beyond a self-help cliché, success can also have many meanings. This section covers several ways you can apply metrics to gauge how well you are doing. Everyone defines ‘success’ a little differently.
How do you define success? If you are a political candidate, it’s the number of votes. If you are a student, it’s a passing grade. If you have a lifestyle business, your goals may be more driven around giving you. But for a business owner, well, that’s never been clearly defined.
One of the most important aspects of business success is earning a profit. Small businesses that fail to turn a profit will eventually fall by the wayside. You must find a way to get into profit as quickly as possible as a small business owner. One way is to ensure you are maximizing sales and profits and are charging high enough prices for products or services.
Determine the unit costs of producing or purchasing products and allow enough of a margin to earn a significant profit. For example, as an online retailer, you may want to earn 20 percent above and beyond your product, labour and advertising costs. Determine the price at which you break even and factor in 20 percent more.
You can also maximize profits by keeping your expenses down. Always buy wholesale and never retail. For example, purchase office equipment that is slightly used to save money, according to the ‘Entrepreneur’ online magazine.
Your products must hold up to ordinary use by customers; otherwise expect a whirlwind of returns. Always deliver what you promise. As a manufacturer, test your products before introducing them to the marketplace and subject them to extended use. Use the tests to establish a realistic time frame for your products to last. Repeat usage is one of the best measuring sticks for high-quality product.
Successful companies are always attuned to what their customers want, including various features, flavours, fragrances, sizes or services. Along the way, they develop loyal customers who continue buying their products instead of competitive brands.
One of the best ways to learn what customers want is to ask them. Marketing research surveys are one method to obtain this type of feedback. Conduct the surveys by phone, the Internet or by speaking with customers in person.
Brand awareness is another indicator for business success. Brand awareness is the percentage of people who are aware of your brand, products or services, depending on what you sell. Brand awareness must be germane to your particular market. For example, as a local restaurant owner, you should only be concerned with the number of people who know about you in the local area.
Building brand awareness takes time. One of the best ways to increase brand awareness for your products and services is by promoting them. Advertising is one way to promote your products. Sales promotions, trade shows, speeches, articles and special events are some other ways to build brand awareness.
Most ethical and successful small businesses give back to their communities. Simple acts of donating to charities or sponsoring public safety programmes are examples of social contributions. Sixty-two percent of those participating in a recent Ernst & Young and Charitable Gift Fund study said that “giving back makes their companies more successful in the long run”. The statement makes sense.
(Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance journalist and could be contacted on [email protected])