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LCDBM Hardscapes January 2010: Customer Retention Management (CRM): That‚Äö?Ñ????ë?????´?????¬¥?????¬¨¬•?¬¨¬®¬¨¬Æ‚Äö?Ñ????묨¬¢s what it is all about in today‚Äö?Ñ????ë?????´?????¬¥?????¬¨¬•?¬¨¬®¬¨¬Æ‚Äö?Ñ????묨¬¢s economy12-31-09 | News
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By Ed Fioroni, Pavestone Company, Vice President of Distributor Sales and Marketing





As Pavestone travels across the country working with contractors and distributors, there is a key concept and need that is surfacing, the need to retain and develop customers. The term is known as CRM (customer relationship management).

CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help the enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

When dealing with customers, how do you:
(a) generate leads, (b) turn leads into a sale, and© how do you retain these customers to generate duplicate sales.

What is CRM all about? How can a contractor take advantage of this program today?

The diagram (See Figure 1) looks complicated, but let?EUR??,,????'?????<

The CRM will allow contracting firms to address two key issues:

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According to one industry view, CRM consists of:

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Figure 2: Implementing CRM: The Decision Process

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The diagram (See Figure 2) shows how a contractor can implement a CRM program.

A contractor has three choices when wanting to adopt a CRM program:(a) in-house development, (b) buy licensed CRM software, and© outsource a managed service.

Contractors will find, at the beginning, that outsourcing a managed service will be the most cost effective choice. The advantages for a contractor by choosing this option will require lower upfront costs (don?EUR??,,????'?????<

Instead of buying, installing and maintaining costly software, SaaS (Software as a Service) allows you to outsource managed services at lower entry and ownership costs. Using the term ?EUR??,,????'?????<

CRM will help you develop specific strategies for interaction with each customer by: (a) better relationships with profitable customers, (b) locating and enticing new customers that will be profitable and© finding appropriate strategies to deal with unprofitable customers, including termination of relationships.

CRM is the practice of analyzing and utilizing marketing databases and leveraging communication technologies to determine corporate practices and methods that will maximize the lifetime value of each individual customer to the firm.

What are the benefits of CRM to a contractor?

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Research shows that contracting firms that adopt a CRM strategy within their organization will increase their profit by 50 percent. This is a powerful tool. It is also stated that 85 percent of contractors that try to adopt a CRM program fail.






Figure 3: Components of CRM Strategy

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What are the components of a strategic CRM plan? (See Figure 3)

The first step is that the contracting firm has to decide that they want to become customer centric, that their overall plan is to pay close attention of customer needs in a consultative manner and not transactionally. The second part of the strategy is to integrate and align the organizational processes. The third step is to capture information and decide on the technology to use.

Finally, the CRM strategy can be implemented.

A contractor can ensure that their business is customer oriented by following these steps:

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How does a contractor keep track of a successful CRM program?






Figure 4: Traditional & Customer Based Marketing Metrics

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The chart above (See Figure 4) looks at metrics that a CRM program can capture.

Some of the above metrics are well known, but the CRM application will develop a culture for a contractor that is based on customer and strategic customer based metrics.

The development and implementation of a contractor?EUR??,,????'?????< The CRM program will allow contractors to automatically and manually generate new sales opportunities and provide flexibility to adapt campaigns to take changes in customer behavior or information into account. The program will yield faster and more accurate follow-up on sales leads, referrals and customer enquiries. Contractors will be able to manage all business processes by introducing a central point of control ensuring all business processes are executed in accordance with correct and effective business rules. This gives top managers a detailed and accurate picture of all sales and marketing activities to instantly react to a changing business environment.

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