10 Dos and Don’ts of Customer Relationship Management

It’s not a secret that managing relationships with your customers can be a real challenge, even for small businesses with only a few clients. It’s a constant struggle of asking the right questions and finding the right answers. Who is your most profitable customer? When will the company who purchased from you last year be ready to buy more products or services from you this year? How does the sales pipeline look for your business for the next quarter? And – sometimes – which customer should you invite to play golf next weekend?

These are all important questions, and you need the answers – now, before your competitors start talking to your customers. Sometimes you may spend hours going through piles of business cards and post-it notes to fish out the right one. Or, you may ask your sales representatives do more manual reporting, and sacrifice the time they usually spend selling. Unfortunately, you also have to make your “best guess” – which may or may not be right. So what should (and shouldn’t) you do in order to stay ahead of your competition, better understand your customers buying habits, boost profits – and pick your best golf partners?

1. DON’T let your sales team - or anyone else - create multiple spreadsheets to store customer data. Although it might seem very easy at first, you or your employees will lose many hours trying to organize and analyze this information and your entire database of customers and prospects will be spread throughout your organization on many different spreadsheets.  Should an employee leave your organization, the sales data on their machine can be easily lost or deleted. 

2. DO enforce naming conventions and ownership rules for all the information that your employees enter into the database. Avoid adding duplicate contact information and encourage periodic data cleansing. Accurate data ensures accuracy in reporting, giving you more confidence in your successes and a clear picture of challenges.  It also provides your marketing team with a clean and up to date list with which to market your new products and services.

3. DON’T ignore segmentation. At a minimum, differentiate prospective clients from existing customers. Ideally, you should to be able to segment your customers by industry, geography, number of employees or other criteria for targeted marketing messages and maximum results.

4. DO track customer satisfaction levels. It will help your employees set expectations when talking to customers, identify “red flags” for inside sales representatives who are building lists of customers to call, and improve customer satisfaction within all of your departments.

5. DON’T just rely on revenue numbers. Clients who bring you the most revenue today are not necessarily the most profitable ones. You need to know your most profitable customers in order to focus your efforts accordingly and maximize revenue for your business.

6. DO collaborate. Sales is always looking for marketing to provide them with a large list of highly qualified leads while marketing is demanding detailed follow-up on the contacts they provide, and customer support searches historical client data to better understand customer issues.  The key to this collaborative effort is using one centralized system to store all customer-related information and communications which everyone can access at any time to ensure they are working with the most current and accurate information possible.

7. DON’T let leads get lost in the funnel.  Very often the sales team simply doesn’t have time to follow-up on all of their leads, or needs help from marketing to warm up old leads. When all contacts are stored in one central location, the marketing department can quickly and easily target prospects who have not been contacted in a while, renew communication with them and reestablish interest in your products and services.

8. DO log all communications with your customers. Keeping a record of every conversation with sales, every marketing email which was sent, every support request placed, and their complete purchase history helps all departments and senior management to have a more complete understanding of each customers’ history and their future buying habits.

9. DON’T ignore the “80/20 rule”. If you’re like most other businesses, 20% of your customers are responsible for 80% of your revenue. Knowing who they are will help you focus your sales and marketing efforts on the most profitable customers and decrease time spent on ineffective activities which generate little new revenue.

10. DO make sure all of your data is backed up. If customer information is stored on someone’s laptop, it may be gone forever if the laptop is stolen or lost. If the data is stored on a central server, this server should be backed up daily and data recovery processes should be put in place in case of disaster.

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