Tag: University of Mumbai BMS Notes

Risk Management

According to the Marquette University Risk Unit, risk management is the continuing process to identify, analyze, evaluate, and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss. We typically simplify this a bit and describe it as the Identification, Analysis (or Measurement), Treatment and Monitoring of risk. 

Risk Management is the art, science, process and all the ongoing activities involved in identifying, understanding, assessing, monitoring and then effectively reducing one’s exposure to risks, and the likelihood, impact and undesirable results should any of those risks materialize.

Although risks can be managed, it’s important to appreciate that risks are always evolving (Old risks can metamorphose and change, while new, unfamiliar risks are always emerging) and can never be truly eliminated.

Risk Measurement is the effort to “quantify” the likelihood and potential impact of a given risk or set of risks occurring. It’s just one of the many possible elements of risk assessment.

Measuring risk is generally conducted by using probability and statistical analysis of historic data that conforms to a classic “normal” bell curve distribution. As a result “Standard deviation” is the most common unit now used for risk measurement.

This approach was first articulated by Prof. Frank Knight, in his 1921 book “Risk, Uncertainty, and Profit.” In that book Dr. Knight was the first person to observe that the principal difference between Risk and Uncertainty is that “Risk” can be measured (using statistical methods) and “Uncertainty” cannot be measured. That’s so because the variability of the range of outcomes of uncertain phenomena do not conform to the bell curve distribution model, and by definition cannot measured.

As a result its extremely important to recognize the risk measurement is only reliable when its used in analyzing phenomenon where bell curve distribution patterns are the norm, (outcomes are unknown, but probabilities are known) such as casino gambling, slot machines, lottery, height, weight, and life expectancy.

Attempting to measure risk in areas where uncertainty reigns, (Outcomes are unknown and probabilities are unknown) such as romance, war, earthquakes, business, and investing is flawed & problematic from the very start.

Risk Organization is the process of identifying, quantifying, and managing the risks that an organisation faces. As the outcomes of business activities are uncertain, they are said to have some element of risk. These risks include strategic failures, operational failures, financial failures, market disruptions, environmental disasters, and regulatory violations. Risk is a statistical concept that is measured using statistical concepts that are related to the unknown future. Almost all investments are exposed to it.

Risk Organization involves identifying the types of risk exposure within the company, measuring those potential risks, proposing means to hedge, insure or mitigate some of the risks and estimating the impact of various risks on the future earnings of the company.

While it is impossible that companies remove all risk from the organisation, it is important that they properly understand and manage the risks that they are willing to accept in the context of the overall corporate strategy. The Organization of the company is primarily responsible for risk Organization, but the board of directors, internal auditor, external auditor, and general counsel also play critical roles.

Risk can be managed in a number of ways: by the buying of insurance, by using derivative instruments as hedges, by sharing risks with others, or by avoiding risky positions altogether.

Customer Relationship Management (CRM) can be beneficial to both supplier and customer. The supplier reduces costs by offering only products that are wanted, when they are wanted, and he passes the cost savings on to the customer who signed up for the company’s CRM. To implement such a system, extensive information about the customer must be collected and stored. The two concerns with regard to this system are customer privacy and the accuracy of the information collected.

Collecting Customer Data

Ethical issues originating with the collection of customer data for CRM are related to secure collection methods and to the verification of the information. Ethical companies ensure that sensitive information such as credit credit card numbers or medical histories are collected in a secure environment and transmitted back to the databases securely. During data collection, it is also critical to verify the identity of the customer and the accuracy of the information being submitted. High security for these functions is costly but ethically necessary.

Storing CRM Data

Once customer data is safely in a company database, ethical companies adhere to four principles regarding storage. Data is only stored with the agreement of the customer. Customers must be able to view their data and either change their data or ask for it to be changed. Customers can withdraw from the program, and such a withdrawal causes their data to be erased. The ethics behind these principles are that the data belongs to the customer and the customer must be able to control his data.

Using CRM Data

Given that much of the customer data for CRM is sensitive, ethical companies ensure the data is kept private to the maximum extent possible. To achieve this, the company must store the data in a form or in a location not generally accessible. The data must only be consulted when necessary for the fulfillment of a CRM task, and only those employees who handle the data to complete the task are able to access the data. When sub-suppliers need to use the data, they must first commit to restrictions similar to what the CRM company has in place.

Disposing of CRM Data

Since customers must be able to withdraw from the CRM program and since their data is then erased, the company needs a procedure in place for safely destroying customer data when it is no longer needed. While deletion from the database is initially sufficient as long as the database remains secure, data on obsolete equipment and equipment that changes status to non-secure is at risk. An ethical company has detailed policies and procedures for tracking and destroying data and keep accurate records of such activities.

Mobile CRM, or Mobile Customer Relationship Management, is a CRM tool designed for mobile devices including smartphones and tablets. By connecting through mobile CRM, you allow your sales team’s access to customer data through a mobile CRM app or through a web-based browser with cloud CRM. A key benefit of using mobile CRM is to allow your sales force to access real time data while out in the fields meeting prospects and customers.

Getting started with Mobile CRM

Before you begin to implement your mobile CRM, it is important that you define goals on what you want to achieve by having a mobile CRM and what your work force needs in order to take advantage of real time data access.  I’ve outlined three highly important areas you will need to address before launching:

1. Internal buy-in

Before you implement a mobile CRM app, it is important that you get internal buy-in from the sales force. Your sales teams are the ones that will be using the smart phone application daily and in order to get their buy-in, you need to implement extensive in-house training on how to use the application in the form of user guides and training programs as well as explaining the key benefits of what they can achieve by working with the mobile CRM.

2. Provide the device

People love getting things for free and one of the easiest ways to get your sales team to adopt a smart phone CRM is to provide the device itself to your sales force and include the application pre-installed. Although most CRM mobile apps are supported by iOS, Android and Blackberry, make sure that you check with the provider before giving it to your sales force.

3. Mobile app usability

Your sales force will rarely need access to complete functionality on their CRM mobile app to all the same data and reporting they would access via their desktop. Start out by providing only basic access that the teams use on a day to day basis. For example, writing and sending an email, scheduling a meeting and/ or updating contact information.

Selling on the move – The next generation of CRM

Introducing mobile CRM to your sales operation can be a dramatic change for the better. Your salespeople can update and synchronise information on the move, sharing real-time data from across the business. Day-to-day sales tasks are freed from the desktop, so a salesperson carrying a tablet or smartphone can:

• Plan the day with calendar integration
• Dial in to meetings with click-to-call
• Access and update leads, contacts and oportunities
• Open and share files
• Access dashboards

But today’s mobile CRM platforms can do so much more. Add cloud storage to mobile CRM functionality and you’re no longer synchronising data with a local copy you’re accessing live, centrally held information from whichever device you choose. Distributed teams can share files and background information and can update, share and send proposals on the move.

Custom apps can feed information directly into your CRM back end, with new app releases rolled out to your sales team in real time. Every salesperson has the benefit of complete CRM data, analytics and customer-facing material at their fingertips, on any device freeing them to spend more time on sales and less on administrative tasks.

Expert answers, anytime, anywhere

Using a CRM platform to handle and track customer service activity already makes sense, and adding a mobile dimension brings even more benefits. Combining mobile with social CRM gives you a whole new range of capabilities. Not only can your customers now contact you where and when they choose, but you can track, manage and respond to every case with the full capability of your CRM platform.

A mobile CRM platform means instant, simple escalation, with issues routed straight to the right subject matter expert, product manager or executive, regardless of location. You can implement round-the-clock cover for urgent queries and respond on the same platforms your customers use no more losing issues as they change from one channel to another.

The privacy principles of ECRM are:

Lawfulness, Fairness, and Transparency

When ECRM collects personal data, it will be processed lawfully, fairly, and in a transparent manner in relation to the data subject.

Purpose Limitation

When ECRM collects personal data, it will be collected for specified, explicit, and legitimate purposes and not further processed in a manner that is incompatible with those purposes.

Data Minimization

When ECRM collects personal data, it will be adequate, relevant, and limited to what is necessary in relation to the purposes for which it is processed.

Accuracy

When ECRM collects personal data, it will be accurate and, where necessary, kept up to date; reasonable steps will be taken to ensure that personal data that is inaccurate, having regard to the purposes for which they are processed, is erased or rectified without unreasonable delay.

Storage Limitation

When ECRM collects personal data, it will be kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed.

Integrity and Confidentiality

When ECRM collects personal data, it will take measures designed to protect against unauthorized or unlawful processing and against accidental loss, destruction or damage.

Lawfulness of Processing

Any and all processing will be done lawfully. ECRM will process personal data only if and to the extent that at least one of the following applies:

(1) the data subject has given consent to the processing of his or her personal data for one or more specific purposes

(2) processing is necessary for the performance of a contract to which the data subject is a party or in order to take steps at the request of the data subject prior to entering into a contract

(3) processing is necessary for compliance with a legal obligation to which the data controller is subject; (4) processing is necessary in order to protect the vital interests of the data subject or of another natural person

(5) processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller

(6) processing is in the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data.

Information collected

As you interact with ECRM, there may be opportunities for you to provide us with your information. Additionally, we may collect certain information about you as further described below.

You may provide us with information about you through a number of sources: ECRM websites, applications, tradeshows, events, surveys, social media platforms, sweepstakes entries, and through our customer contact centers. We also receive information about you through third party event coordinators where you have registered for certain services.

The types of information that ECRM collects about you may include, but are not limited to:

• Contact information (such as name, address, city, state and ZIP code, age or date of birth, occupation, email address and telephone number);
• Payment information (such as your bank account information, credit card number, debit card number, bank or investor account, CVV code, expiration date, and payment history);
• Information about your connected devices (such as mobile phone, computer, or tablet) and how you interact with our services, apps, and websites (such as IP address, browser type, unique device identifier, cookie data, and associated identifying and usage information);
• Demographic information (such as gender and date of birth);
• Marketing/business profile information; and
• Photographs and videos such as those that you may submit for contests, sweepstakes and social sharing.

Disclose information

We use and disclose personal information you provide to us as described to you at the point of collection. We also use and transfer personal information from or about you:

• To respond to your inquiries and fulfill your requests, such as to send you documents you request or e-mail;
• To send you important information regarding our relationship with you, changes to our terms, conditions, and policies and/or other administrative information;
• For our business purposes, such as marketing new products, events, and services, data analysis, audits, developing new products, events, or services, operating or enhancing our website, improving our products, events, and services, identifying usage trends, providing products, events, and services, maintaining customer/client relationships, improving the quality, safety, and security of our products, events, and services, administering your account(s), troubleshooting, supporting electronic signature, customizing and improving communication content, evaluating product, event, or service performance, providing customer support, and determining the effectiveness of our website;
• With other registrants or our trusted third-party business partners that are participating in the same event that you have registered for, or otherwise have requested certain event information, via print and online materials;
• To our third-party service providers who provide services such as website hosting and moderating, mobile application hosting, data analysis, infrastructure provision, credit card processing, IT services, e-mail services, marketing services, auditing services, and other services, in order to enable them to provide services;
• To verify your information and authenticate payments and process orders, such as disclosing certain financial and other information you provide to ECRM to third parties that provide credit reporting, payment or order fulfillment services;
• To a third party in the event of any reorganization, merger, sale, joint venture, assignment, transfer, or other disposition of all or any portion of our business, assets, or stock (including in connection with any bankruptcy or similar proceedings); and
• when we otherwise have your consent.

In addition, we use and disclose personal information as we believe to be necessary or appropriate:

(a) As permitted by applicable law, including laws outside your country of residence

(b) To comply with any legal process

(c) To respond to requests from public and government authorities, including public and government authorities outside your country of residence

(d) To enforce our website Terms of Use

(e) To protect our operations or those of any of our affiliates; (f) to protect our rights, privacy, safety, or property, and/or that of our affiliates, you, or others

(g) To allow us to pursue available remedies or limit the damages that we may sustain.

We also use and disclose information that is not in personally identifiable form (such as anonymized, masked or de-identified information) for any purpose. If we combine information that is not in personally identifiable form with information that is (such as combining your name with your geographical location), we will treat the combined information as personal information as long as it is combined.

Effectiveness, Efficiency and Economy management idea can help managers to evaluate performance and then to improve it.

Management Effectiveness

Effectiveness can be explained in terms of what is achieved. It is about whether targets are met or not and whether the right work is being completed. Managers are responsible for making sure that this happens. If a team is working really hard but not delivering what is needed, then they are not effective. Effectiveness is measured by setting out clear objectives before work starts and then evaluating whether the objectives have been met or not.

Management Efficiency

Efficiency can be measured in terms of the inputs required to generate the outputs. It is about the way in which work is completed. It is part of a manager’s job to help improve efficiency. For example, if the same work can be completed by using less resource or more quickly, efficiency has improved.

Measuring efficiency means that the process followed to complete the work must be defined and then each part of the process studied to see what resources are required. This becomes the starting point or benchmark for measurement.

Future work is then measured against the benchmark to see if it has taken more or less resource. Process changes are also measured to see if they are more or less efficient. It is also useful to measure one team’s efficiency against another and then adopt the most efficient methods as best practice always assuming that effectiveness is maintained.

Management Economy

Economy is the third element of the three Es model, covering the financial aspects of work being done. It could be argued that economy or finance is just one of the factors to consider when improving efficiency, but because finance is so important in organisations, economy has become the third element. Economy is measured by looking at the cost of the resources consumed and the value of the output delivered.

The Best Effectiveness, Efficiency and Economy Mix

It can be very difficult to find the best mix of effectiveness, efficiency and economy as there are so many ways to obtain value. For example:

It may be that the focus is on providing a specific output (effectiveness) for the least cost this may be at the expense of efficiency.

It may be that the focus is on maintaining a particular cost (economy) and producing the best output for that cost.

It is important that the priorities of senior management are established as this will then drive the most appropriate measures to be used and lead to the best effectiveness, efficiency and economy mix. This mix will change over time depending on the focus of the organisation and external factors too.

Every manager can be a better manager and understanding the 3Es Effectiveness, Efficiency and Economy can help improve business performance.

Enhancing customer experience is always a challenge. In order to enhance business performance, organizations have to expand their customer base.

Growth happens only when customer relationships with the organization are robust and satisfied. And customer satisfaction can only be increased with effective CRM in an organization.

But how would one measure the effectiveness of CRM for an organization? Below are some criteria that can be applied:

1. Increase in customer retention
2. Increase in orders per customer per year
3. Increase in average spending per order or visit
4. Increase in cross sales
5. Increase in up sales
6. Increase in reactivation of previous customers
7. Increase in referrals of new customers by existing customers
8. Achieving each of the above while keeping increased costs (required to make them happen) from offsetting the increased sales

Certainly, all this data can be collected over the years and a trend can be identified to measure the effectiveness of the implemented CRM program.  Perhaps other parameters such as increased order per customer, number of orders per year, defections etc. could add to it.

To me it goes beyond that:

1. Customer Expectations

Can we bring in customer’s perceptions or their expectations into this calculation? Will there be any effect of these parameters on the overall effectiveness?

E.g.: A organization’s intent might be to provide quick service – say in 5 minutes/customer – but the customer might expect service to take 10 minutes or more than that for it to be performed to his satisfaction.

So here the customer expectation might be different from what the organization is providing/intends to provide.

2. Perceptions

What has been the customer’s past experience with the organization, and what is his current experience? Perceptions keep changing with each experience.  Does every customer carry the same perception every time? Does the organization maintain the same perception each time to keep their customers satisfied and happy?

3. Emotions

It is clear that people make emotional decisions based upon experience as described in my previous blog post “Mantra of Growing Business”. Emotions keep changing as per the experience and so does the perception.

Some customers take rational decisions and accordingly their perception changes.  So, what emotions do customers carry when their expectations are met, and how can this be measured?

4. Customer History

Sometimes, everyday interactions with customers or past history of a customer would help understand a customer better to serve and fulfill their needs. So are organizations tailoring their services in a better way based on this to keep their customers happy?

5. Belief

Customers ‘belief’ in the product/service or overall organization may vary.  As mentioned above, “perceptions” would turn into belief if the customer experiences similar service over a period. Customers carry this belief towards the organization and this belief would impact customer relationships and future growth.

6. Communication

The key element how frequently organizations communicate to their  customers not only through advertising but also through personal communications. People feel valued if communication happens at a personal level and their opinions are sought and taken into consideration.

The service-profit chain model tries to link all the components required to make an organization successful. According to this model, a company that performs well in one aspect and poorly in another will eventually develop problems that affect the entire organization. This working model highlights the importance of the links between quality management, a good work force and exceptional service to the customer.

The service profit chain dissects the levers that translate good service into profitability. The outcome of quantifying and understanding these levers for the companies that have done it is an increased focus on empowering employees.

Improving Service Profit Chain Levers

1. Create a customer feedback loop

With the service profit chain, the ultimate measure is customer loyalty. To get there, organizations should focus on creating satisfied customers by providing great value. This is easy to understand, but of course not easy to do.

Understanding what customers value is difficult for two reasons. First, unless you’re a small startup, it’s difficult for leaders to stay in close, direct contact with customers. The larger the organization, the more complicated this becomes. The second reason is that customers aren’t actually very good at explaining what they want and why. If we just listened to our customers verbatim, we’d likely miss many important opportunities to provide more value.

To deal with these challenges (and in addition to other measures such as NPS). It is believing it’s best to use frontline employees to create a customer feedback loop. Frontline employees can be trained to understand how to translate customer feedback into useful input and the right tools and processes can provide structure that’s more actionable at scale.

2. Create an employee feedback loop

Frontline employees are critical to a great customer experience. In the service profit chain, this translates to empowering employees to do their jobs well and increasing their motivation to provide great service. Similar to customer feedback loops, creating a feedback loop for frontline employees is key to unearthing the problems that hurt productivity, satisfaction and ultimately loyalty.

According to the service-profit chain model, a connection exists between high profits, customer loyalty and satisfaction and employee productivity and satisfaction. The application of this model first considers profits generated by the loyalty of a customer. Under this model, the customer’s satisfaction directly impacts the customer’s loyalty. This satisfaction results from the value the customer receives from the company’s satisfied and productive employees. Employee satisfaction results from the support of upper management that understands the needs of both the employees and the customers.

Customer Satisfaction Drives Customer Loyalty

Customer satisfaction does not equal customer loyalty. In order to gain customer loyalty, the customer has to perceive value for money spent. The service-profit chain model recognizes that a customer becomes loyal through this perceived value. Since customer expectations constantly change, the organization must recognize and support these changes.

Value

Value means different things to different people. Many individuals associate value with an emotional aspect of the purchase based on experiences. For example, a company can create a well-priced product that has exceptional guarantees. However, a customer might not consider this product valuable enough to become a loyal customer. This is on of the reasons why advertisers use different campaigns for the same product. People respond to stimuli differently based on emotions and experiences.

Employee Productivity Drives Value

The workforce of a company can helps to drive the company’s profits. When an organization has engaged, productive and highly satisfied employees, the organization will have a higher chance of succeeding. Many types of businesses from service businesses to manufacturing businesses sell products to customers. If the business’s employees have a good working knowledge of the product, the employees have a better ability to service and satisfy customers. Product knowledge comes from both experience and longevity with a company. New employees typically cannot relate to customers as effectively as employees with years of experience working for the company. The service-profit chain model recognizes that employee retention directly impacts customer satisfaction.

Value Drives Customer Satisfaction

Customers today are strongly value oriented. But just what does that mean? Customers tell us that value means the results they receive in relation to the total costs (both the price and other costs to customers incurred in acquiring the service). The insurance company Progressive is creating just this kind of value for its customers by processing and paying claims quickly and with little policyholder effort. Members of the company’s CAT (catastrophe) team fly to the scene of major accidents, providing support services like transportation and housing and handling claims rapidly. By reducing legal costs and actually placing more money in the hands of the injured parties, the CAT team more than makes up for the added expenses the organization incurs by maintaining the team. In addition, the CAT team delivers value to customers, which helps explain why Progressive has one of the highest margins in the property-and-casualty insurance industry.

Employee Productivity Drives Value

At Southwest Airlines, the seventh-largest U.S. domestic carrier, an astonishing story of employee productivity occurs daily. Eighty-six percent of the company’s 14,000 employees are unionized. Positions are designed so that employees can perform several jobs if necessary. Schedules, routes, and company practices such as open seating and the use of simple, color-coded, reusable boarding passes enable the boarding of three and four times more passengers per day than competing airlines.

Role of CRM in driving customer satisfaction

CRM plays an important role in driving customer satisfaction. Satisfied customers are profitable to a firm not only because they are likely to make repeat purchases but also because they promote the firm through words of mouth. Thus, CRM improves the firm’s market share by bringing in more customers. However, proper implementation of CRM is a must for customer satisfaction. CRM prescribes that in order to satisfy the customers, first of all it is important to understand the customers. Customers should be very well understood for their tastes, attitudes, preferences and decision-making factors. This helps the firms in identifying their target customers. No firm can ever cater to all the customers satisfactorily so identification of target market is a pre-requisite.

Next, the marketing mix should be aligned to the target market’s demands to maximize their satisfaction. CRM provides for effective company-customer communication so that the firm’s marketing mix can be tailored to suit the target market. This also helps the firm to trace customers’ changing preferences and anticipate future demand so as to design future offerings according to it.  However, no matter how superior marketing mix a firm offers, there is always a scope for customer grievances. Therefore CRM also requires that if there are any customers’ complaints and grievances, these should be handled properly. This helps in securing the customers’ trust in the firm and also develops a bond between the firm and customers. CRM is a continuous process and requires regular efforts. The marketplace is highly competitive today and customer satisfaction is the only key to survive. The customers, therefore, should be treated as assets and must be valued forever.

Retention and Profits

Customer retention is a key aspect that all businesses should strive for, and yet not enough understand just how important it is to foster relationships with long-term buyers. Too many business owners don’t think beyond acquiring customers or keeping their existing ones.

Unlike acquisition, customer retention is harder to achieve. Converting new customers to loyal consumers requires personalization, smart targeting, and proper implementation. Thankfully, there are tools that can help you do these things, and more.

A customer relationship management (CRM) platform is one of the best customer-centric tools on the market that will help redefine the way you interact with your buyers.

So, why is CRM considered the best customer retention tool? With functions like lead scoring, email marketing, and analytics, decision making is easier and customer service becomes more streamlined. These things result in improved customer experience, which can convert buyers into long-term consumers.

Why Customer Retention Matters

Customer retention is the art of keeping existing customers and increasing their lifetime value by becoming their go-to source on goods and services. To outsiders, it might seem like acquiring new customers is more crucial than keeping old ones. After all, getting a new customer means acquiring someone new who can spend on your business.

While that’s technically true, you have to remember that customer retention and customer acquisition provide different values.

Acquiring new customers isn’t so straightforward – you are likely spending some of your resources on ads and marketing campaigns in order to target new leads and convert them to new users or buyers.

On the other hand, existing customers cost zero resources in exchange for their business. Think about it this way, if your average ad spend comes down to $100 per customer, a buyer who purchases your product or service for $200 will have an initial value of $100. If this customer buys goods and services worth another $200, they would have repaid their acquisition costs and given you $300 in profits.

Acquisition VS Retention: Which One Is Cheaper

Businesses can spend anywhere from a couple hundred to thousands of dollars on ads, which could drive some new traffic and revenue into your business.

As effective as this strategy may seem, keep in mind that profit and revenue aren’t essentially the same thing. If you’re not careful, your company could end up spending more than what the average customer is worth when acquiring new customers.

Customer retention isn’t just about saving on ads. Here are other reasons why you should consider making this your new top priority:

• Long-term customers tend to spend an average of 67% more than they did during their first year. Existing customers will eventually trust you more and keep coming back for related products and services. In the long run, they’ll start buying products or services that had nothing to do with their initial purchase, increasing their overall lifetime value.
• Loyal customers remain loyal for a long time. In a survey, 77% of customers said they remained in business with a company for more than 10 years. If a majority of your customer base consists of existing customers, you’ll have a consistent revenue stream while saving on acquisition costs.
• Long-term buyers not only increase their own value but attract new buyers. Customers with an emotional relationship with a brand not only have a 306% higher lifetime value but are 71% likelier to recommend the brand with friends and family.
• Retaining customers is one of the easiest ways to increase profits while cutting down costs. At least a 5% increase in customer retention leads to a 25% increase in profit.

Customer Retention Challenges

Creating a customer strategy isn’t straightforward, otherwise more businesses would be doing it. It all begins with knowing what the common roadblocks are.

Retention strategies differ depending on your industry, business size, and customer base, but the common issues that increase customer churn more or less remain the same:

1) Terrible Customer Service

Bad customer service is the quickest way to lose existing customers. Whether it’s unanswered inquiries or rude customer reps, bad customer service can easily convince your buyers to look the other way.

In such a saturated market, buyers won’t have a hard time replacing your company with another one that has better customer service. In fact, customer service is so important that some buyers base their decisions on interactions with the company alone. A survey reveals that 72% of customers remain loyal with a brand because of friendly reps. That’s not all; a whopping 93% of buyers are likely to make repeat purchases with the same brand following a great customer experience.

On the other hand, good customer service isn’t just about being nice to your customers. Your representatives’ ability to actually provide knowledgeable, helpful solutions, while being time-efficient are two hallmarks of amazing customer experience.

2) No Improvements on Products and Service

This is especially true for B2Bs. Over time, your customers will start looking for more complex solutions as they start to develop more comprehensive needs. If you don’t evolve with your customers, there will eventually be other businesses that can offer what you can’t.

Good customer service isn’t just about adding new value. Most of the time, customer retention can be improved simply by listening to what they’re saying based on goods and services that already exist.

Customer testimonials are a great way to measure customer loyalty. Using social media, polls, and email marketing campaigns, you can gauge customer satisfaction and understand how they perceive your service. If you have these channels open but still fail to provide improvements, your customers will eventually feel like you aren’t listening to them and move on with another provider.

3) You Don’t Show Appreciation

Customers want a dynamic relationship with businesses. This means that buyers want to work with businesses who know what they’re worth. If you’re offering a loyal customer of more than two years the same discounts and deals you’re offering a new buyer, your existing customers won’t feel appreciated, which may cause them to feel a little bit neglected.

Appreciation isn’t just about rewarding them, either. At the very least, some form of engagement between your brand and the customers is needed to sustain the relationship. If your interactions are strictly transactional, your customers won’t develop an emotional attachment to your brand, making it harder to convert them into loyal customers.

The Role of CRM In Customer Retention

Customer retention is a multifaceted aspect of sales. There are so many factors that go into customer loyalty, which is exactly what makes it overwhelming.

Thankfully, there are tools that make managing relationships with customers easier. Nowadays, most customers are expecting personalized, targeted service, and it’s difficult to do that without the appropriate tools to make customer support more seamless.

A customer relationship management (CRM) software is a tool that can help you manage relationships with clients and stay on top of each person’s interaction with your business. This way, fostering relationships and converting individual customers to local buyers becomes more manageable.

Core Functions of a CRM

A CRM platform is a powerful tool for driving customer loyalty. Here are the common functionalities of a CRM software:

• Lead Management: Lead management might be the most valuable aspect of CRM for most organizations. Too often, companies can have hundreds or thousands of unused leads that aren’t properly organized or categorized, simply because no one had the time to manage it. With CRM’s lead management functionality, you can better engage with the leads you already have rather than continuously collecting new leads to be further left unused.
• Email Integration: CRM acts as a complete platform, allowing marketing teams to plan, schedule, create, and send out entire email marketing campaigns through the platform itself. This means a single platform can contain all the data the team might need, and also enable them to send emails with that data integrated on the platform in place. No more jumping back and forth from one app to the next.
• Forecasting: Need to find out what your customers might need more of tomorrow? Forecasting with the use of CRM tools allows teams to forecast or predict what might be the next best steps in their overall strategy. Predictive analytics through analysis of historical data and potential trends lets your team get the most out of your CRM efforts, giving your business the best opportunities to grow.
• Customer Service Automation: Real-time, responsive, and immediate customer service is no longer a feature these days; it’s an expectation that customers expect from the best companies out there. CRM equips your organization with the customer service automation tools it needs to compete with the best and to maximize customer retention and satisfaction, through quick responses and immediate answers.

Product complexity

Unnecessary product complexity means offering products, services or options that relatively few customers want. Most organizations like to give their customers choices. But managers often overestimate buyers’ wants and willingness to pay for all those choices. Sometimes, indeed, it’s obvious that companies have carried innovation too far.

Organizational complexity

As a company expands, products vary or it moves into new markets, managers are likely to add organizational complexity. They may try both to maximize scale and stay close to the customer. Pursuing both these objectives often leads to complex matrix structures, duplicated costs at different levels and a lack of clear accountabilities. Each decision to add an organizational layer may make sense, but few companies in good times assess the overall impact of these decisions.

Process complexity

Companies that do attempt to manage complexity usually begin with processes, often through efforts such as Lean Six Sigma. However, reducing process complexity should be a company’s last step, not its first.

Managing process complexity helps in controlling overspending and tracking performance more effectively.

The CRM Product Doesn’t Fit In

If the CRM product cannot accept multiple deployment model options like On-Premise, On Cloud, Private Cloud, etc. or the product is not flexible enough for broader customizations that fit with organization’s growing and changing needs it may not leave you with enough options, especially for a growing organization. Also, if the product is not up-to-date with the current CRM trends like Social CRM or Mobile CRM it may not be suitable for future. Hence make sure that your CRM product fits not only for current business needs but also for the organization’s growing and changing needs.

Lack of Integration Capabilities

A CRM will work only as good as it is integrated with existing IT systems like ecommerce, marketing automation, ERP, etc. If there is lack of support from the support staff of vendors of existing systems that need to be integrated with CRM, the whole integration process can be a huge burden and may eat into hours of working time of your staff without any visible results. It is advisable to plan integration needs, if any, in advance to avoid CRM implementation overkill.

Lack of expertise of the CRM vendor

If the CRM implementation vendor does not have enough experience with the CRM product or have never before undertaken any CRM projects of a scale similar to that of yours, it may result in unforeseen hurdles which may be very difficult to overcome once the CRM implementation project is already underway. The CRM vendor may also be ill-prepared with possible implementation challenges, resulting in the loss of value time and resources. To avoid this, assess the capabilities of your vendor thoroughly and verify their credentials before signing a formal contract with them.

Lack of User Adoption

Probably the most ignored aspect of CRM implementation is the assumption that once the software is in place all the users will just dive into it and makes as good use of it as possible. More often than not this is not the case. Even though user adoption is critical for CRM success many organizations don’t have a proper plan or strategy in advance.

It is important to have comprehensive training programs in order to provide an understanding to end-users of the system. Making your team members navigate complex screens or enter detailed time-consuming form won’t work. More than the usability, team members should be educated about the need to make the CRM system a part of their daily schedule and how best to use it to enhance their effectiveness.

Lack of Business Insight

So, you’ve got the right CRM product, the right vendor, got it implemented well and have your got team members excited about this “cool new software”. You may have all these steps in place and your CRM strategy may still fall apart if it’s only used as a data dumpster and no actionable insights are drawn from all the available data and no adequate action is taken on those insights. A CRM software can only get the data for you. It can’t draw conclusions on your behalf or get your team members to act on them. Your sales or marketing team needs to use this information to effectively address customer issues, exploit opportunities and close more sales. For example, you can get better insights by integrating surveys in your CRM and get real-time insights from your contacts.

Other factors such as data migration and quality, and converting business operations may also affect the total costs of CRM implementation. Proper planning and careful assessment of any potentially hidden costs should help you set a realistic budget for your CRM project.

Business culture

A lack of commitment or resistance to cultural change from people within the company can cause major difficulties with the CRM implementation. Customer relationships may break down and result in loss of revenue, unless everyone in the business is committed to viewing their operations from the customers’ perspective.

Poor communication

To secure buy-in and make CRM work, all the relevant people in your business must know what information you need and how to use it. Make sure to communicate integration needs in advance if other teams need to cooperate on the implementation, eg payroll staff.

Lack of leadership

Weak leadership could cause problems for any CRM implementation plan. Management should lead by example and push for customer focus on every project. If a proposed plan isn’t right for your customers, don’t do it. Task your team to come up with a better alternative.

Contact management is the act of storing, organising, and tracking information about your customers, prospects, and sales leads.

Contact management software can help your business build stronger, longer-lasting relationships and close more deals as much as 29% faster with:

The history of contact management stretches back to Rolodex and Filofax systems, developing into desktop-based standalone software and email clients with built-in contact management functionality.

Contact management software

Contact management software typically allows you to make entries for each of your contacts. This can include contact information such as a name, phone number, email address, or company.

The tools organise this information in a way that makes it easy for you to find the entries again. The data may also be searchable.

Contact management software can also offer features like tracking the interactions between the customer and the business, as well as some scheduling abilities, for example, the ability to organise meetings with clients in a calendar.

Despite these significant technical advances, many businesses find that their contact management systems fundamentally amount to little more than a simple database containing names, phone numbers and notes.

CRM is a much broader concept. At the core, it is the practice of managing and nurturing customer relationships. While it’s a concept, it is primarily implemented through a CRM software solution. And CRM systems include built-in contact management capabilities.

However, a CRM does a lot more than simple contact management. It allows you to automate loads of manual tasks, saving you time and resources. The all-in-one CRM has recently entered the market. An all-in-one CRM such as Agile CRM provides built-in marketing automation, sales enablement, and help desk modules.

In recent years, the categories of sales management and contact management software have grown closer together, as enterprises increasingly realise that a more unified system, capable of capturing a wider range of business data, is key. By combining the tracking of contacts, their engagements with your business, the products they buy, the ones they don’t and the challenges they face, you can create one, single unified view of the customer. That’s vital data not only for a successful sales team, but also in the delivery of excellent customer service.

• 360-degree view of your key contacts
• Mobile access to contact data from a smartphone
• Collaborate with people across your company
• Social—tap into activity on social media sites

Benefits of contact management and CRM

1. Better, longer-lasting customer relationships

A core aspect of contact management and CRM software is that it allows you to store extensive amounts of data about each customer. This includes demographic data such as name, email, location, industry, age, gender, etc.

It also tracks and stores behavioral data such as when a customer opens an email, clicks an email, visits your website, downloads content, subscribes to your email list, etc.

With all this data, you maintain a much clearer picture of who each customer is, how they have interacted with your company in the past, issues they have faced, etc. This allows your team to get to know and interact with your customers in a more personal way. They see you as human, not just an abstract entity that charges them for products or services. This results in closer relationships, customer loyalty, and builds trust among your customer base.

2. Deeper insight into your customers

As mentioned above, contact management and CRM software allows you to store loads of personal information about each customer. Over time, as you gradually accumulate more data about them, your understanding of who they are gets increasingly accurate.

You come to learn their unique, individual pain points, needs, challenges, interests, and a lot more. Armed with that kind of insight, your sales and customer support reps can enter a customer conversation with all the information they need to form a quick rapport.

3. Improved data management

When you store and manage your contact data in spreadsheets, you run the risk of human error in the data entry process. Plus, if a colleague needs specific contact data, you have to send them the spreadsheet or dig up the information they request and send that.

But when you have a CRM in place, all your contact data is stored in one central location and is accessible by all. A CRM solution removes the risk of human error because customer data is normally collected using web forms and is then automatically added to your database.

All your teams have a clear view of each customer because they are all using data from one central database. And if you use an all-in-one CRM, all your marketing, sales, and customer support data is stored in that one database as well.

4. Increased productivity

Another great benefit of using a CRM is that it automates tons of manual processes, which increases the productivity of your team. Features like online appointment scheduling, which automates the entire scheduling process, dramatically increase productivity. Data entry is automated by using forms, as mentioned above. And so on.

Those are just two simple examples of processes that you can automate using contact management and CRM software. When you automate so many processes in this way, your team has more time to spend on higher-value tasks, such as devoting more attention to one-on-one customer interactions.

5. Contact management increases customer satisfaction

Because everyone in your company can see a full history of each contact’s interactions with your business and their personal data, they can more easily cater to each customer’s unique needs. This helps customers feel valued and sends the message that you are paying close attention to them and what they need to be successful.

Customer satisfaction is the key to successful revenue and business growth. And these days it’s challenging to keep customers satisfied if you are not using contact management and CRM software to manage your interactions with them.

6. Reduced expenditures

With so many processes automated, you don’t need as many employees to man the ship. This leads to less money spent on salaries.

Moreover, if you use an all-in-one CRM that comes with built-in marketing, sales, and customer support automation, you don’t need to invest in separate systems to complete those functions. Everything is managed from the same system, saving you the cost of having to invest in multiple systems for various business functions.

Plus, effective use of contact management and CRM software enables you to reach more leads and close more deals with less effort. This translates to increased revenue. In fact, the average return on investment for companies that use CRM software is around $5 to every $1 invested.

7. The ability to personalize customer interactions

Personalized customer and prospect interactions help you communicate in a more relevant way that resonates with them. This is especially true with personalization in marketing.

With all that personal data stored on each customer and prospect, you can prepare yourself for a call by looking through their interaction history and demographic data. Then you can touch on things that you know interest them, which increases engagement levels.

Plus, customer support reps can maintain a view into the issues each customer has faced in the past. This allows them to gain an understanding of the customer’s use case, pain points, etc. before they speak to someone who submits a support ticket. They can then personalize their support to the specific needs of that customer.

8. Better alignment and collaboration across teams

Aligning your teams’ efforts can be challenging. This is particularly true with sales and marketing. Each team has its own agenda and often works in a silo without input or collaboration from the other side.

Contact management and CRM software bridge that gap. Everyone in the company has a 360-degree view of every customer and prospect interaction, all their personal data, etc. Because all teams are working with the same data from the same database, marketing has a view into what sales is doing, and vice versa.

For example, when you use an all-in-one CRM with built-in marketing automation, your marketing team can collaborate with sales on the development of a lead scoring model. Then they can work together to ensure marketing qualified leads are passed to sales as quickly as possible (this can be automated).

Also, with an all-in-one CRM, customer support data is attached to each person’s contact record in your database. That includes all past support tickets each customer has submitted. This gives sales reps insight into which problems each customer has experienced, which aligns the two teams’ efforts.

For example, let’s say a sales rep wants to reach out to an existing customer to pitch an upsell opportunity. They can check the customer’s contact record, open their support ticket history, and see if the customer is unhappy or experiencing an ongoing issue with your product. If they find that is the case, they can delay reaching out until the customer’s issue is resolved and they are satisfied once again.

9. Improved customer experience

The customer experience is an increasingly important element involved in satisfying customers and acquiring new ones. Studies estimate that by 2020 the customer experience will overtake product and price as the key brand differentiator. Today’s consumers expect attention and will pay more for a better customer experience.

Contact management and CRM software empower you to deliver a world-class customer experience. Personalized interactions—as mentioned above—improve the customer experience. Having all customer data at your fingertips helps you form closer customer relationships, which further improves the customer experience.

If you use an all-in-one CRM with built-in customer support capabilities, you can use features like dedicated help desk groups to improve the customer experience. Learn more about dedicated help desk groups.

These are just a few examples. The bottom line is that with your teams aligned, processes automated, and more time freed up to interact one-on-one with customers, you’ll deliver a better customer experience. That wouldn’t be possible without contact management and CRM software in place.

10. Insight into your results and data-driven decision making

Contact management and CRM software provide extensive CRM reporting, metrics, and analysis. You can keep your finger on the pulse of how your teams are doing, which lets you identify weak links in the chain so you can help them improve their performance.

With metrics like revenue predictions, sales funnel analysis, campaign performance metrics, etc., your company’s leaders can make data-driven decisions. The data does not lie and making strategic decisions about the future growth of your company is challenging without metrics to inform those decisions. But when you have a CRM solution with a customizable dashboard that displays the metrics you need to see and can be accessed in a moment’s notice, making data-driven decisions is a breeze.