Basics of Customer Relationship Management
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Basics of Customer Relationship Management
Andrew Kamphuis
The Real Me
Basics of Customer Relationship Management
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Customer Experience
Does the customer experience matter?
If you know your customers, can you create a better experience?
Will a better customer experience lead to more profitability?
Things That Annoy Customers
Top 10
Promised return phone calls not made or information not sent.
Top 10 Things That Annoy Customers
1
Not being informed of a delay.
Top 10 Things That Annoy Customers
2
One department in the company having no idea what another department said.
Top 10 Things That Annoy Customers
3
No one bothers to call to make sure the wine arrived – probably no call at all until they want to sell you something more.
Top 10 Things That Annoy Customers
4
Not being valued for your relationship.
Top 10 Things That Annoy Customers
5
No one knowing what they last sold you or when.
Top 10 Things That Annoy Customers
6
Spam!
Top 10 Things That Annoy Customers
7
Staff that ask basic questions they should know the answer to.
Top 10 Things That Annoy Customers
8
IVRs – Interactive Voice Response Systems.
Top 10 Things That Annoy Customers
9
Customer support or phone agents without access to your profile.
Top 10 Things That Annoy Customers
10
CRM is Philosophy Not Technology
What is CRM?
It’s Not Pixy DustYou can’t sprinkle some and assume
sales will get better.
What is CRM?
It’s Not Software
What is CRM?
DefinitionThe concepts used by organizations to manage
their relationships with customers including capturing leads, storage and analysis of the customers, vendors, partners and internal information.
It’s the operational, collaborative and analytical approach to customers.
What is CRM?
BORING!!!!
What is CRM?
A Better Definition
What is CRM?
ObjectivesBoost sales, retain customers and save
money.Enhance business productivity and optimize
sales and marketing.
Why CRM?
Goal of CRMBring the company closer to
the customer.Increase customer loyalty =
more profit.
Why CRM?
Philosophy -> Process -> Technology
How to do CRM Right
PhilosophyIt doesn’t start with technology – it starts with
philosophy.It’s a ‘customer first’ attitude.
Philosophy -> Process -> Technology
ProcessThe process will make a difference, which is
noticed by your customers – and your bottom line.
Philosophy -> Process -> Technology
TechnologyDon’t select the technology until you’ve set a
philosophy and created a process.
Philosophy -> Process -> Technology
Personal Example: Vin65In Dec 2010 our customer base topped 500 clients.We wanted a CRM solution for our customers.
Philosophy -> Process -> Technology
At Vin65Philosophy
Both sales and customer service should be humanized.
Vin65 should feel like a small family company.Customer service matters – It’s not just about sales.
Philosophy -> Process -> Technology
At Vin65Process
Humans answer the phone (no phone tree).Lead inquiry system and support ticket system that is
answered by humans.Staff members’ faces appear on support ticket
responses.Work with staff to develop personality when talking
with customers.Get staff photos on website, Facebook, Twitter, etc.
Philosophy -> Process -> Technology
Vin65Technology
Initially used SalesForce for sales.Home-grown support ticket system.Built-in reporting and analytics to measure how team
is doing.
Philosophy -> Process -> Technology
Example: Vin65 Personalization Efforts
Philosophy -> Process -> Technology
Example: Vin65 Personalization Efforts
Philosophy -> Process -> Technology
Example: Vin65 Personalization Efforts
Philosophy -> Process -> Technology
Example: Vin65 Personalization Efforts
Philosophy -> Process -> Technology
Examples: Results of CRM Efforts
Philosophy -> Process -> Technology
Examples: Results of CRM Efforts
Philosophy -> Process -> Technology
Building a Strategic Base
How to Build a CRM Plan
Develop a PhilosophyWhat’s important?What’s your customer relationship story?
CRM Plan
Determine ProcessWho’s responsible for testimonials?Who’s responsible for irate customers?How long does it take to respond to a customer?Look at it from a sales, marketing, service, and
feedback perspective.
CRM Plan
Commitment at all LevelsExecutive management leads it.Each team member understands their role.
Tasting room staff enters the data into the system.Billing staff understand how to deal with complaints.Marketing staff know how to analyze the data.
CRM Plan
Measure ResultsEach process should have a measurable result.Monitor results over time.
CRM Plan
CRM Plan
CRM Plan
MarketingCustomer knowledge
Usage habitsDemographics
AnalyticalMarket size and opportunityCustomer value equation, CLTV, AOV
Marketing PerspectiveHow much can you afford to spend to acquire
new customers?Which new customer sources generate the
most profitability?How can you spend to retain/reactive existing
customers?
CRM Plan
Marketing PerspectiveIdentify the ideal customer.
Spending habitsVisit frequenciesIncentives redeemed
CRM Plan
CRM Plan
SalesCRM puts the right offer in front of
the right customer.
Sales PerspectiveCustomers with a good experience tell 3
others of their experience.5% increase in customer retention means
25%-95% increase in profitability.
CRM Plan
CRM Plan
Service & SupportResponse management
Fielding inquiriesResponding to complaints
Service Perspective95% of customers who have had problems will
continue to do business if problems are resolved.For every complaint you receive there are another
20 potential complaints.Customers with a bad experience tell 8 others of
their experiences.68% of former customers left because of poor
customer service.
CRM Plan
CRM Plan
FeedbackListening to social conversationsSurveyingActive conversations
Execution
10 Ideas For Your Winery
Forget Philosophy – Just Want to Execute?
Learn Your Customers Dog’s NameReally know your customer – their
birthday, anniversary date, etc.Find something special about your
customer.Use that “special” thing when you
communicate with them.
10 Ideas For Your Winery
1
Send a Birthday CardNot a generic card – a personal card (nobody wants
your generic card).Remember something special about your customer.
10 Ideas For Your Winery
2
Segment Your Next Email BlastClub vs. non-club.First time vs. repeat buyer.Local vs. out-of-town.Make it relevant.
10 Ideas For Your Winery
3
Why Segment Your List?Your response rate increases.You build deeper connections.Untargeted email is spam.
10 Ideas For Your Winery
Segmented ExamplesWineTasting.com – 26,000 inactive buyers
50% received a regular email 50% received targeted “we miss you” email
Results6.75X greater click-through rate9X more orders28X more $$½ as many unsubscribers
10 Ideas For Your Winery
Build a Retention PlanRetention is the new acquisition.Know your retention rate.Understand why customers leave.
10 Ideas For Your Winery
4
Get the Second OrderAfter the customer leaves the tasting room, will
they ever get contacted again?
10 Ideas For Your Winery
5
Listen and Respond SociallySocial monitoring
VintankHyperAlerts
10 Ideas For Your Winery
6
Enable Feedback on Your Website
10 Ideas For Your Winery
7
One Question SurveyHow likely is it that you would recommend our
winery to a friend or colleague?Know your Net Promoter Score.
10 Ideas For Your Winery
8
Build a SpreadsheetRecalculate KPIs once a month.
Net promoter scoreRetention rateLifetime value
10 Ideas For Your Winery
9
Hire a ConsultantValue in giving your data to a third party and
getting a fresh perspective.CRM segmentation can be handled off with little
internal coordination.Easy to see ROI on this expenditure.
10 Ideas For Your Winery
10
Keys to Success
Keep it SimpleStart small – work your way up.Quick wins.
Keys to Success
Actionable MeasurementsEach plan should have actionable measurements.At Vin65 we measure:
Support – time to answer, number of tickets per client, satisfaction of client, number of tickets re-opened
Sales – new leads generated, close rate, etc
Keys to Success
Stakeholder OwnershipWithout buy-in the plan will fail.Need active engagement.
Keys to Success
Know the ValueThe numbers you should know:
Retention rateNet promoter scoreLifetime value of a customer
Nice to know:Cost to acquire a customerMoney lost on each one-time buyer
Keys to Success
Retention RateThe percentage of your customers from your last
period that are still your customers this period.100 customers last year.80 of the 100 customers are customers this year.You have a 80% retention rate.
Know the Value
Net Promoter ScoreAsk One Question: How likely is it that you would
recommend our winery to a friend or colleague?Percentage of customers who are promoters
subtract the percentage who are detractors.Total 40 people. 25 people rated 9/10, 5 people
rated 7/8 and 10 people rated you 0/6.25/40 less 10/40 = 62.5% - 25% = 37.5% NPS.
Know the Value
Customer Lifetime ValueBest Way – Google it and download a spreadsheet.The quick and dirty way:
(customer profit/year) * (retention rate/(1-retention rate)).
If you make $40/customer/year and your retention rate is 80%. $40 * (0.80/(1-0.80)) = $160
Know the Value
Cost to Acquire a CustomerAdd all of your acquisition expenses for the year
and divide by the number of new customers you acquired.If you spent $100,000 in advertising and acquired
4,000 new customers you would have an acquisition cost of $100,000/4,000 = $25/customer.
Know the Value
Money Lost on Each One-Time BuyerSubtract the acquisition cost (previous slide) from
the average gross margin on a first time purchase. If your acquisition cost is $25/customer and you earn
$20 profit on each sale – you lose $5 on each one-time buyer.
Know the Value
Train EmployeesSuccessful CRM starts with well trained employees.Training ensures consistency.
Keys to Success
Questions?
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