Microsoft Dynamics CRM
The Role of CRM in a Challenging Economy
As the economic environment continues to fluctuate, many organizations are asking themselves what strategies they can pursue to bring tangible business benefits while taking stock of the economic conditions. In a growth economy, businesses typically work hard to expand their customer base and spend aggressively to stoke the growth engine. When money is tight however, existing customer relationships grow in importance as organizations seek a cost-effective way to nurture business expansion. And while there is no magic pill or panacea, customer relationship management (CRM) solutions can provide the foundation for sustainable growth and enable organizations to survive and thrive in these uncertain times.
Planning for success
While the natural reaction for many companies in challenging times is to become inwardly focused and concentrate on conserving capital, history has shown that it is in these critical times that organizations have a significant opportunity to outflank their competition. In fact, a study conducted by Bain and Company found that during the last recession more than a fifth of the companies in the bottom quartile jumped to the top quartile in their industry and more than a fifth of “leadership companies” fell to the bottom quartile (Bain and Company 2008). Forward-looking companies maintain their unwavering focus on investing in and optimizing existing assets through both good and bad times, coupled with a concerted effort to exploit operational efficiencies. A study by the McGraw-Hill Laboratory shows that companies who continued strategic spending during a recession outperformed non-spenders and experienced revenue growth of 275 percent during the first full year of recovery (McGraw-Hill). And the key asset that lies at the center of every business is customers. It is by protecting and investing in this single most important asset that companies can establish the foundation for a sustainable business. In fact, improving customer loyalty and experience are listed in Forrester’s Trends 2009 report as the top two concerns of business executives (Band, Leaver, and Magarie 2008). In the Marketing Executives Networking Group survey, customer satisfaction and retention were noted as the top executive priorities for 2009, both rising in importance from 2008 (Tsai 2009). These trends are likely to continue—and even intensify—as businesses increase their focus on existing customers.
CRM: The Enabling Technology
In today’s economy organizations can’t rely on brute strength to maximize the value of their customer relationships; rather, they need enabling technologies and tools. CRM is a technology that allows organizations to track and leverage every customer interaction to maximize revenue opportunities and improve customer loyalty. But CRM does much more than just track customer interactions. It also helps organizations optimize their operations by automating routine tasks and standardizing best practices. Ultimately, CRM allows organizations to better acquire, manage, serve, and extract value from their customers while improving operational efficiency—something that is critical in today’s economy. In fact, customer relationship management was noted as a leading priority of business executives by AMR Research in 2008 (Fletcher 2008). This trend has continued, with Forrester Research showing that more than a third of enterprises plan for CRM upgrades in 2009 (Marston 2009). And Nucleus Research goes on to state that, “If there is one technology area where you should increase your investment today [in these uncertain economic times], it’s CRM” (Nucleus Research 2008).
CRM: The Winning Strategy in a Challenging Economy
Microsoft Dynamics CRM
And compared to setting up a new manufacturing plant, aggressively hiring new sales and customer service representatives, or raising capital to acquire other companies, CRM is a technology that can be implemented rapidly with relatively limited costs. It is something that any company should consider as it attempts to ensure success in these challenging times. Put simply, CRM can provide real business benefits in times where every dollar counts.
Five Key Strategies with CRM
But what exactly does CRM enable and what are the potential benefits? While there are surely many approaches being espoused in the market today, we believe there are five main strategies that companies can employ to survive and thrive during uncertain economic conditions:
1. Focus on existing customers
2. Maximize revenue opportunities
3. Do more with less
4. Reduce operational costs
5. Optimize existing IT assets
It is common knowledge in business circles that it is significantly cheaper to retain existing customers than to acquire new ones. By providing employees with quick access to actionable customer data, organizations can better identify the right customers, increase their loyalty, and maximize their profitability.
Retain the Right Customers
Effective customer retention begins with knowledge. Companies should assemble a complete customer profile that allows users to see all demographic data, interactions, communications, and purchases made. This information, combined with robust segmentation and analysis tools, enables organizations to better gauge the profitability of each customer. Organizations can then create programs and policies commensurate with the customer’s profitability. For example, organizations can configure call routing systems to automatically identify high-value customers and route them to premium customer service representatives. Or with access to key metrics agents may be empowered to provide on-the-spot discounts proportionate with each customer’s value. But routing the call is only the beginning. In today’s market customers want quality not quantity of information. Customer service agents should be empowered to resolve issues more quickly by being equipped with a complete customer history and a full view of service incidents so they can zero in on relevant facts and provide the appropriate service or product. And with access to order and invoice information within the CRM system itself, customer service agents can quickly answer billing questions without tedious transfers to other departments. As important as efficient inbound communication is, it is proactive, relevant communication that often endears an organization to its customers. For example, organizations can set up an automated process to alert affected customers of potential issues, such as product defects, and then automatically send out proactive communications to keep their customer base informed. Or they can set up a simple process to automatically send out timely messages, like birthday cards or product vouchers based on a specific date or long customer loyalty to show appreciation to the customer. It is often these “little things” that strengthen the connection between company and customer. With 360-degree customer views, insightful analytics, and streamlined customer service capabilities, Microsoft Dynamics CRM allows organizations to better identify, service, and retain customers.
For more information see: http://crm.dynamics.com/