In the mid-1990s, Customer Relationship Management (CRM) entered the professional language of marketers as a clue to unlimited sales and effortless business growth. Since then, however, it has earned rather a notorious reputation as a lame child of the enterprise ecosystem that never lived up to great expectations (the stats has it, between 25% and 60% CRM projects fail).
As our practice proves, the key to these startling figures is that businesses resort to customer relationship bookkeeping rather than management, confusing simple electronic registration of customer data with exploiting the benefits of a CRM system as a number-one technological aid for sales and marketing. For B2B businesses, this confused approach results in such negative implications as dramatically underutilized opportunities for lead generation and for reduction of customer acquisition costs.
The following article attempts to refine the ever-elusive purpose of CRM and suggests 3 overlooked capabilities of a B2B CRM system that can truly turn it into a profit generation tool, when done right.
The key to generating profit with CRM is to understand its core goal, and this is where it really suffers a bit of a definition problem. Ever since its inception, CRM has been understood as an area of management, a strategy, a process, a methodology, a data-driven approach to marketing and, in its narrowest sense, an IT solution. None of these perspectives is wrong; still, each of them shapes a company's approach to exploiting the technology.
In our point of view, B2B CRM as a discipline should be based on the following pillars that its software counterpart should reflect:
- Understanding of the sales process not as a funnel but as a horizontal pipeline, where each stage acquisition, retention, advocacy requires extra efforts and attention.
- Long-term orientation that takes into account B2B customers' slow-paced decision-making and, therefore, sustains prolonged lead nurturing.
- Focus on relationships with key customers and/or segments to optimize the allocation of customer retention expenditures.
CRM does bring forward the fact that your real source of profit is customers, not the products or services you sell. By leveraging the customer base that you've already earned instead of spending fortunes to attract 'strangers', you can optimize profit generation, with more sales occurring through retention (cross-sell, upsell) and advocacy (new customers through recommendations) rather than acquisition alone. Ultimately, this is how you can reach the true goal of CRM that is, finding the balance between your value as a product or service provider in your customers' eyes and the value of customers as shown in your company's bottom line.
B2B CRM capabilities to make note of
Bearing in mind that retained customers are 60% to 70% more willing to buy compared to new ones, we've picked 3 CRM capabilities that open up more opportunities for profit generation while building on your existing customer base.
Extended reach within customer organizations
While B2C companies serve to individuals, B2B customers are distinguished with a complex organizational structure that can include multiple departments, business units, regional branches and affiliate companies think Chevron that operates in more than 180 countries, or AT&T with over 15 subsidiaries across the United States and Mexico.
It is a fine-tuned B2B CRM system that can spot and register this data in its entirety. As long as you secure cooperation with at least one point of contact within your customer's organization and deliver an impeccable service to earn insider references, each of these entities can pose practically unlimited opportunities for your business growth.
For this, consider customizing your CRM solution to enable better sales management of strategic accounts. This includes viewing sales activities that target separate parts of the customer's organization as a single movement with clear priorities, as well as better coordination between your sales reps who work within the same large account but in different locations or with different product groups.
More connections through ownership
In contrast with business entities that explicitly state their affiliation, some organizations don't share any branding or structural dependencies apart from the same owner behind them. Another of the CRM benefits is the system's capability to track connections of disparate business entities down through their ownership. Again, getting your foot in the door is important. As the entire B2B market largely depends on personal connections, it's likely you will have more businesses from the same owner turning into your prospects and, ultimately, customers.
Nurturing of your prospects and customers
Converting your prospects into customers is about building trust' at precisely calculated intervals. With your prospective customers, a window for a sale opportunity can occur anytime, and it's crucial not to miss it. Here is where nurturing with regular, personalized messages can help.
With a few hundred prospects per each sales rep, this could easily become a nightmare, couldn't it? Luckily, a customized B2B CRM system is the tool to remind you with handy notifications that 'It's nurturing time!' for each and every one of your specified prospects.
This capability is not limited to prospects only. Your existing customers are well worth nurturing too, as you can follow the same path to re-engage them after sales in line with your customer retention strategy.
As B2B companies operate in the limited market of buyers who are however willing to spend much more per purchase compared to B2C, leveraging sales opportunities within the existing customer base is key to profit generation.
With more than 7 years of CRM deployment experience, we at ScienceSoft have seen how underestimated these opportunities are in companies' real-life practice. Far from exhausting the topic, however, we have attempted to get to the point of B2B CRM and outlined how nurturing and developing large accounts through internal referrals can drive your profit. Hopefully, these will help you shape your business growth strategy and get the most of your CRM technology with more visible and measurable impact.
Find out how to get a CRM tailored to your business here.
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