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Sales Strategy & Management

Beat the Recession with CRM

Use CRM to protect existing customer revenues, safeguard customer loyalty and unearth latent revenue opportunities within your customer base

Monique Verduyn

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In a down economy, customers expect more for their hard-earned cash – more value, more service and more attention. In response, savvy businesses are being more frugal with their spending, putting their money into areas that improve sales, enhance customer service or help them gain operational efficiencies. Companies that stay current with technology improvements and invest in customer relationship management (CRM) solutions to better understand and serve their customers will capture greater market share now and have a competitive advantage when the economy bounces back.

The Value of Relationships

“Consumers are trimming their spending at the moment with many people feeling the pinch of the global slow down,” says Nathalie Ing, customer intelligence business lead at SAS Institute South Africa. “With a change in budget comes a change in buying habits. Consumers are better informed and are seeking greater value with less tolerance for irrelevant marketing messages and bad service levels.”

She recommends an approach increasingly based on value derived through the relationship with the customer. A critical differentiator will be to provide quality, relevant and accurate messages at the very point of contact, in realtime, with your customers.

“Customer loyalty can be achieved through the power of analytics: being able to gain more specific understanding of what your customers want through accurate segmentation, propensity analysis, lifetime value and customer profitability for example, to drive the efficiency of marketing campaigns. By targeting the right customer with the next best conversation or offer at the right time, reduced marketing budgets can be spent with precision,” adds Ing.

Converting leads to customers

The lead conversion black hole has long been the cause of dispute between marketing and sales teams. The challenge is to achieve what everyone wants: improved sales revenues through qualified leads. “There are many best practices you can tailor within your CRM solution which will guide people to process leads consistently and quickly to move them along the sales pipeline,” says Vivek Thomas, Maximizer MD, EMEA. “By using a lead or task module within a CRM system, the call-to-action items automatically appear for the appropriate member of the team and next steps and deadlines are clearly identified.”

Additionally, a standard list of lead qualification questions by customer to assess budget, authority, need, and timeline will help representatives understand and define customer needs. Whether a lead stems from a trade show, or direct mail, not all leads are ready to buy right away so it’s critical to standardise and update your lead status.

“It is important to stay in touch with organisations by building the following up tactics into your CRM system,” says Thomas. “To do this, segment and target your communications and intersperse them with actions such as event invitations, webcasts and seminars.” To ensure leads are followed up and passed through the lead cycle in a timely manner, you can use your CRM solution to monitor the timeframe in which tasks are completed by establishing system alerts for an effective follow-up process.  “This is where a CRM solution plays a vital role in the success or failure of a marketing campaign for your business,” Thomas adds.

Cost-cutting is not enough

Jeremy Waterman, MD of Softline Accpac, agrees that CRM is an invaluable partner in this economic storm. Cost reduction on its own, he says, isn’t going to steer a business safely through the slump; you need to also look closely at how to safeguard revenues and profitability, starting with your customer base.

“Companies have seen a rapid decline in cash flow as a result of slowing customer demand and evaporating lines of credit,” says Waterman. “There has been a sudden rush to cut spending, and while this has been understandable it’s simply not enough. Without looking closely at how to protect revenues, you’re just delaying the inevitable: more painful cost reductions and the very real possibility of sliding into an irrevocable decline.” Selling more to existing customers may be the first priority during a downturn, but the important task of acquiring new customers cannot be overlooked. Selling to new prospects, however, is generally regarded as being five to ten times more costly than selling to an existing customer, so improving sales and marketing efficiency will be vital for growing your customer numbers during the downturn. “CRM, and the latest generation of CRM products have an important role to play in this regard. In times of recession, CRM solutions can allow you to extend the reach and effectiveness of your new business sales and marketing programmes through ongoing process improvements, productivity enhancements and significant cost savings,” Waterman says.

Beat the downturn

Waterman explains that in a downturn, CRM enables you to:

  • Grow your revenue share within your existing customer base
  • Understand the true cross-sell and up-sell opportunity of every one of your customers in order to maximise the profitability of every relationship
  • Dramatically reduce your cost-per-lead by delivering highly targeted marketing communications to specific customers or segments
  • Cut the amount of time and cost it takes to resolve service issues without compromising an exceptional service experience that keeps your customers loyal
  • Provide decentralised empowerment to your customer-facing staff in a way that will drive their productivity and effectiveness while still retaining central control over headline resource, performance and budget management
  • Capture new businesses at a far lower cost-of-sale than was possible previously
  • Lower your cost-of-sale by always ensuring that your sales team is focused on the opportunities that are most likely to close
  • Dramatically reduce cost-per-lead by delivering highly targeted and consistent marketing messages to specific prospects or market segments
  • Introduce marketing accountability, so you can ensure that you are getting the right level of return from every marketing rand you spend
  • Ensure consistent processes are followed, with clear key performance indicators which create solid discipline and greater predictability for sales and service personnel
  • Strip administration out of your organisation, so there’s less paperwork, errors and task repetition, and less cost as a result
  • Provide decentralised empowerment to your business development staff in a way that will drive their productivity and effectiveness while still retaining central control over headline resource, performance and budget management

“In a downturn, CRM should not be viewed as a discretionary initiative; it is now an operational and financial imperative for all SMEs. It allows you to leverage opportunities and proactively grow your revenue share through highly focused business development programmes which replace sporadic interaction with true customer lifecycle management. CRM, therefore, helps you deliver exceptional and personalised service consistently to your customers during challenging times,” Waterman adds.

Answer that call – contact centre solutions for SMBs

For the smaller business, CRM begins with the basics. If you don’t have a full-time person to answer the phone, you’re losing business. Work With Me offers a simple service that diverts incoming calls from your line to its office. When a call is received, the system recognises the number which has been dialled and immediately launches your details onto the computer screen. Work With Me agents answer the call in your company name and either transfer the call to you or take a message that is SMSed to you along with the caller’s details. The service operates from 8:00 to 17:00 Monday to Friday. In addition, any information received via your allocated fax number and email address will be received by the contact centre and forwarded to you.

Incorporating CRM into your organisation

  • If you use popular software solutions like MS Outlook, choose CRM and contact management solutions that can easily be integrated. Embedded small business CRM software applications add value to Outlook in many ways:
  • Enhanced sales, service and marketing functionality
  • Improved email functionality
  • Shared Outlook address book across the network
  • Shared Outlook tasks and calendars
  • Improved record features and management
  • Industrial strength database for better performance

You can capture customer emails with a single click and with this capability you and your sales team can associate correspondence to the appropriate contact, account or opportunity for sales activity tracking.
Having an integrated solution means no synchronisation process is required; there are no external database hassles, and no problems when you work offline. Every contact you make, every activity you perform, every task you assign is automatically available in Outlook.

Choose an integrated sales, marketing, customer support and call centre automation solution that is Internet and WAP enabled, providing users with access anytime, anywhere via a web browser or wireless device. These are designed to integrate seamlessly with other business software and back office applications, providing you with a holistic view of each customer.  They allow your users access to vital customer, partner and related transactional data. Full integration to other business-critical solutions used every day, such as accounting software and proprietary systems, ensure that your CRM solution is a portal to all the data and applications you count on to help you manage your business.

For more information on CRM and call centre solutions, contact these companies:

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

Sales Strategy & Management

Five Ways To Stay In Control Of Selling Your Business

Even when you are ready to sell your own business, you need to maximise your benefit by keeping control of the sale process.

Andrew Bahlmann

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Each and every one of the many hundreds of business owners that I have engaged with over the years has always identified immediately with one key business strategy – the need to have control. After all, they became entrepreneurs to have control over their own business and business ideas, to control their cash flow and the growth of their business.

Yet, curiously, they often apply a different set of standards when the moment comes to sell that business. They do not seem to realise how quickly and how dangerously they can lose control.

The all-too-common scenario is that one day, out of the blue, a business owner is contacted by a “would-be” acquirer who is interested in buying the business. It is probably only in hindsight that they would pinpoint this as the moment when entertaining the approach meant that they lost control of the sale process.

From that moment, the potential acquirer will define the hoops through which the seller must jump before a serious offer is put on the table. The acquirer insists, for example, on full due diligence before a detailed offer is submitted. This leaves the business owner feeling overly exposed for an extended period of time.

But worse is often to come. Eventually, at the eleventh hour, the potential acquirer puts a ridiculous offer forward, based on all the “risks” they believe they identified in the due diligence.

The acquirer conveniently concentrates on the negative. They forget about the embedded value and future growth potential that the seller’s business will offer.

Or sometimes, they complete their due diligence and walk away. That leaves a baffled business owner watching them drive away from the premises – and left with nothing to show for the process but raised blood pressure and the haunting question, “WHAT happened there?”

These are unpleasant truths indeed – but ones that you can avoid. Such scenarios underline why keeping control is critical when selling your business.

This control is not about taking ego and arrogance. It is about taking an approach that is calculated and structured. That way you will drive the process on your terms and according to your agenda. And that critically will mean that you will be able to protect your confidential information along the way so you are not left feeling exposed at the end of the process.

Related: Never Lose Control When Selling Your Business

Whether you are approached to sell your business or are proactively going to market to find an acquirer of strategic partner, always protect yourself with these five key tips:

1. Always have a plan

Your plan should encompass: the timeline, the terms and the rules of engagement between the acquirer and yourself moving forward. By putting your plan into place, you take and keep control of the process.

2. Interrogate the acquirer

Make sure that as early as possible in the process, you understand these factors driving the potential acquirer:

  • What is motivating their interest in buying your business?
  • Have they bought a business before?
  • How would they value your business?
  • How would they fund the acquisition?

If your potential acquirer has bought a business before, insist on speaking to the business owners who sold to them so you can find out about their experience of working with the company to complete the sale.

Ensure that a potential acquirer gives you a valuation formula upfront so that you can be sure you are both batting in the same ballpark. If you are able to speak with a previous seller, find out how the deal was valued and structured in that instance.

If your potential acquirer has to raise funding, insist on speaking direct to the funder to make sure they are fully committed – and that their valuation methodologies are aligned with what the acquirer is telling you. If there is a mismatch, it is the funder’s valuation that ultimately counts so you may need to engage with the funder.

3. Secure your offer before due diligence

Always make sure that your potential acquirer puts forward a non-binding offer before commencing with due diligence. Doing this will give you comfort that the acquirer is serious. It will also identify for you where the acquirer sees value in your business and what risks they perceive – and what risks there might be for you.

4. Ensure due-diligence terms are agreed

Always make sure that the terms of the due-diligence process are defined and reconcile back to the offer. Due diligence is another point in the process that confirms where your potential acquirer sees the value of your business and identifies risks. Commercial reality and practicality must drive the sale process so make sure you are not manoeuvred into being bogged down in the due-diligence list, which often consists of hundreds of requirements.

5. Always have a timeline

Your time is valuable so make sure that both you and your potential acquirer realise and respect that. Protect yourself with a timeline – you should define the milestones and deadlines of the sale process for your acquirer.

These five strategies will ensure that you retain control of the sale process, just as you have controlled your business development. That will mean that it is less gruelling for you and that you can be confident about selling on terms that you will look back to happily.

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Sales Strategy & Management

Low-Hanging Fruit: Why You Need To Be Selling To Those Dormant Customers

Remember those customers from the past? They may be willing to buy from you again (and again and again).

Sujan Patel

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When I was a kid, I liked getting new toys. What kid doesn’t, right? And every time I got a new one, it seemed like the only toy in the world. I forgot all about the other toys I already had – I only wanted to play with that one.

The sales world is not that different – because of its focus on acquisition. Everyone wants those new customers, and they put all of their efforts there. But by doing so, they forget all about the customers they already have.

The problem is, you can’t let “new toy syndrome” affect your sales strategy. New customers are great, but you shouldn’t forget that other place where real opportunity lies: with your dormant customers, the ones who have already bought from you in the past.

Acquisition vs. reactivation

Companies spend tons of time and money acquiring new customers. But eventually those new customers become dormant. When that happens, most companies just go out and find more new customers. Yet that’s not really the most profitable approach.

If you have a huge dormant customer base that is being neglected, you’re leaving money on the table. And dormant customers are actually more valuable than you might think. According to research by Invesp:

  • It costs five times more to acquire a new customer than to keep an existing one
  • The probability of selling to an existing customer is 60 percent to 70 percent, while the probability of selling to a new prospect is just 5 percent to 20 percent.
  • Compared to new customers, existing customers are 50 percent more likely to try new products and 31 percent more likely to spend more money
  • When they increase customer retention rates by 5 percent, companies can increase profits by 25 percent to 95 percent.
  • Despite the obvious benefits, Invesp finds that only 40 percent of companies it surveyed had an equal focus on acquisition and retention — and my guess is, even less focus on reactivation.

Related: How To Interview Prospective Customers

The value of dormant customers

There’s so much emphasis these days on leading a customer through the sales funnel and closing the deal; even the term “closing” implies an ending. But the sale shouldn’t be the end of your relationship with your customers.

If a customer has purchased from you in the past, you already know you’ve done something right. This customer already knows and likes your business – enough to have actually bought from you. So, wouldn’t it make sense that he or she would be likely to do so again?

The caveat here is that this willingness may depend on your specific product. If, for instance, you sell wedding products, customers will most likely buy from you for only a limited time. But for other businesses, this won’t be the case. Your products and services can be repurchased, or one purchase may be able to lead to the purchase of another, related product.

Whatever the case, you should find it easy to identify those customers with whom an opportunity lies to sell to them again (and maybe again and again).

A smooth sales process

Selling to dormant customers can actually be easier than selling to new customers. That’s because you’ve already done so much of the legwork already. There’s no need to do any kind of lead generation, for instance, because you already have the lead, along with much of the information you’ll need to sell to these people. That would include:

Contact information: You probably already have their email, phone number and any other information you need to reach out and restart the sales process.

Preferences: Because you’ve worked with them before, you most likely have notes on their preferences or any circumstances that could influence what they buy. Plus, you know what they’ve already bought, which should give you insight into what they might buy now.

Personality: It’s possible you’ve even already developed a relationship with a return customer. Customers like familiarity, and if they know you and have worked with you in the past, they’ll be more likely to take your calls and listen to what you have to say.

Related: 5 Reasons Why Your Business Is Losing Customers

Implementing a reactivation programme

When you’re building out your reactivation program, one of the main things you need to learn is why these customers went dormant. Why did they stop doing business with you? Send surveys or ask directly; this will allow you to shape your strategy going forward.

While new customers are key to business growth, if you want your business to last, you also need loyal customers. One-time buyers aren’t going to be your best advocates. But those customers who keep coming back again and again are going to recommend your business to others and be exponentially valuable.

As a result, your reactivation programme – you have one, don’t you? – will be your first step toward nurturing those customers who may in turn become loyal advocates.

This article was originally posted here on Entrepreneur.com.

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Sales Strategy & Management

After Losing A R280 000 Deal, Here’s What I Changed In My Email Follow-Ups

Looking back, these are the things we could have done differently to win the deal.

Kwesi Sakyi-Gyinae

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A while back, I spoke with a potential customer who had an interest in working with us. We met a few times to review the proposal. We narrowed down the project scope and showed how our team could execute. There was definite interest. If we signed the deal, it would be worth $21 000 (R280 000).

But, there was one challenge: The time was not right. The prospect’s team was restructuring their business. That meant they would only move forward after that was complete. So, I put a note on my calendar to follow up with a call every month.

But, then a few months later when I called him, he said, “Kwesi, we just signed a contract with another vendor. You should have called me earlier.”

“What?” I said. “I had spoken with you a month before.”

“I know, but I didn’t remember,” he said. It was a punch to the gut.

What I learnt from the loss

That loss would become a significant learning for our team. When we reviewed why we lost that potential customer, we realised one thing; the key was in the prospect’s response. He didn’t remember us, even though I had ‘followed up’ a few weeks earlier.

We did not have enough compelling top-of-mind awareness. Yes, we followed up, but we were not sticky enough. We didn’t dominate the prospect’s mind share. If we were going to dominate, we needed to nurture, not just follow up.

Related: How soon should I follow up on a quotation?

Three things we do differently now

professional-email-tricks

1. Make it (feel) personal

If you plug your prospect’s email into a fancy email marketing template, it rarely feels personal. Emails with fancy images and fonts don’t connect on a personal note. Instead, write your emails in plain text. Would you write an email to a friend or colleague using fancy email templates with bright colours? An email that feels personal is trustworthy.

Another smart way to do this is to start your email by referring to an ‘undeniable, confirmable truth.’ Communications strategist Ray Edwards describes why this is important in his book How to Write Copy That Sells: “One of the hurdles we have to overcome is scepticism and the fact that our readers often don’t believe us… or aren’t sure if they believe us.”

When you’re nurturing a prospect, you want to build trust. The more trustworthy you are, the more likely you are to get the deal. For example, we now start our nurture emails with: “Hi Joe — it’s Kwesi here.”

2. Tell a story of value

This is one of the critical email follow-up techniques we developed after losing that deal. Most of our nurturing emails tell a story. We tell stories about new ideas the prospect can use. We tell stories about lessons we’ve learnt from failing. We tell stories about our fears and hopes. Great stories evoke emotions that build trust. Humans have been telling stories for more than 20 000 years.

Researcher Paul J. Zak found that stories with great characters cause the release of oxytocin, the brain’s shortcut to ‘it’s safe to approach others.’ The more oxytocin your prospect’s brain releases, the more willing they’ll be to help.

Discussing his findings in the Harvard Business Review, Zak noted that “character-driven stories with emotional content result in a better understanding of the key points a speaker wishes to make and enable better recall of these points weeks later.” That’s why storytelling is sticky. It makes you more memorable.

Related: How can I manage my email inbox?

3. Be credible

The key to being credible is to show social proof. Nurture the prospect by sharing specific recent results of a similar client. I’m not talking about sending a lazy, generic email about a new client you signed. Craft a thoughtful story about a client’s challenges and how your team helped them.

Your social proof story can include these: What was the specific challenge? What were the emotional effects of the client’s challenge? How did your service or product help solve that challenge? What are the new emotions after the results you helped them get?

These three principles have become the foundation of our follow-up emails. We use them to build a nurturing sequence with prospects who are a fit, but not yet ready to buy.

The point is: Have a system to continue adding value to prospects who say it’s not a good time. You spend enough time to get prospects to meet with you. Put in a little more effort to engage with them with value until they are ready. Invest in your relationships for the long term. That way when they are ready to buy, you’ll be the first who comes to mind.

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