CRM is a worthy first mate during trying times

Jeremy Waterman, MD, Softline Accpac, says customer relationship management (CRM) is an invaluable partner in the current economic storm. Cost reduction on its own isn`t going to steer a business safely through the slump; you need to also look closely at how to safeguard revenue and profitability, starting with your own customer base.

"Companies have seen a rapid decline in cash flow as a result of slowing customer demand and evaporating lines of credit. 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 revenue, you`re just delaying the inevitable: more painful cost reductions and the very real possibility of sliding into an irrevocable decline."

CRM helps you to protect revenue from your current customers by ensuring that you are delivering exceptional service and safeguarding their loyalty, Waterman says. Additionally, by providing deeper insight into your customers, CRM enables you to unearth latent revenue opportunities within your customer base for complementary products and services.

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 10 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 from companies like Softline Accpac, 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. He 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 customer 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 your 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 dollar that 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 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 life cycle management. CRM, therefore, helps you deliver exceptional and personalised service consistently to your customers during challenging times," Waterman concludes.