In today’s competitive environment, a properly designed Customer Relationship Management (CRM) program is simply a must have in order for your business to survive and grow. It doesn’t matter whether you are a small make-your-own wine store, a chiropractic clinic, an office equipment supplier or any other business, you must define the processes to be implemented to handle the contact with your customers. After all, if you don’t take care of your customers, somebody else will!
You may have already realized this and you are now one of the thousands of organizations currently using a CRM program. Be careful though, because just purchasing software is not enough. Even if your company currently uses a system, if it is not properly designed and managed, it is costing you in lost opportunities.
Here are a few facts. First of all, other than mergers and acquisitions, there are only two ways to increase revenues and grow your business. One, you can sell to new customers, or two, you can sell more to your existing customers. The key to realizing your true business potential in the long term is to manage your customer relationships with a CRM program so that you can do both. In the November 2007 issue, PROFIT magazine identifies “Adopt CRM software” as one of the seven best ways to build your business.
Secondly, another important fact is that it costs about 10 times as much to attract and acquire a new customer as it does to sell more to your existing customers. As such, an organization who properly manages the customer relationship tends to grow revenues faster and be more profitable than organizations that don’t. According to the study The Loyalty Effect, published by Harvard Business School Press, if a small to midsize company were to increase its customer retention rate by 5%, its profits would double in about 10 years! The same report also noted that if a Fortune 500 company boasted the same increase in loyalty, they could instantly double their revenue growth rate!
Given these facts, it is no surprise that, in addition to attracting new customers, the smart business person should also maximize their product/service penetration to current customers so that they can maximize profits. In today’s tougher economic climate, the question is no longer whether you should use a CRM system, the question is actually how soon can you get started!
Susan A. Enns, B2B Sales Connections