What comes after CRM

CRM in sales - how does it work?

But let's start at the beginning: what does CRM actually stand for? CRM stands for "Customer Relationship Management" and contains much more than the CRM software, which is often used synonymously.

It's about making the relationship with the customer a core process in the company, especially in the areas of sales and marketing. This means recording all contact with the customer and systematically coordinating communication internally. The customer has the advantage that his contacts speak "with one voice", even if he comes into contact with different people via different channels. But how does it look in practice?

A practical example

Suppose you run a car dealership. For marketing purposes you set up an information booth to advertise a new model. Mr. Müller comes to your stand and you talk to him about his ideas of what his dream vehicle should look like. But not only that, in the conversation you will also learn a lot about his background. For example, that he is a father of three and runs a business with several employees as an independent master craftsman. At the end, Mr. Müller fills out a contact form and leaves his email address with the request to send him more information about the car.

Sales without CRM

In a company that doesn't focus on CRM and customer relationships, the following might happen: You come to the company the next day and give a sales representative a list of addresses. They all receive the current vehicle catalog and that was it. When the going gets tough, the address will find its way into the mailing list for the newsletter or the annual catalog. Everything else is left to chance. If Mr. Müller calls your car dealership again later to arrange a test drive, he will tell you some things again and simply leave out others. As if there had never been a first contact. If, for whatever reason, the test drive does not take place, no one will follow up to offer alternatives. Until at some point another car dealership shows more ambitions and the potential customer buys there.

Sales with CRM

But what would be different with CRM in sales? CRM could help that Mr. Müller is dealt with in a much more targeted manner, for example as follows:

The day after Mr. Müller's visit to your stand, you enter his data into the CRM software. This means that a data record is created that you and your colleagues can refer to at any time and that is completed over time into a contact history. Because not only his name and address data are entered in the CRM system, but also background information about your conversation and various keywords. These keywords could be: prospective customer, information booth 2015, family, craftsman, corporate customer, etc.

Then you assign your colleague in sales a short task with the request to send Mr. Müller an email with product information. Your colleague immediately sees in the CRM system what type of customer it is and sends the appropriate information. Not just the complete catalog, but details about "his" dream car. In addition, he offers him the "family package", knowing full well that Mr. Müller has children. At the end of the email there is an offer that he is welcome to contact us for a test drive. In order not to lose sight of the process, your colleague will create a resubmission if Mr. Müller does not contact you in the next four weeks.

Three weeks later, Mr. Müller responded to the reminder email and called the dealership with the request for a test drive. The colleague there calls up his data record in the CRM system, immediately sees which model is involved and enters the date. During the conversation, she asks whether his family will accompany him on the test drive. When the time comes 14 days later, you greet Mr. Müller by name. Your colleague has set the appointment in the CRM system because one of "your" prospects is coming today. You lead him and his family to the test vehicle and Ms. Müller smiles in surprise when she glances at the two child seats in the back seat.

The test drive went well and so did the subsequent sales pitch. Nevertheless, the Müller asked for time to think about it. But when Mr. Müller, like everyone else in the CRM system with the keyword "corporate customers", received a newsletter with a discount announcement for corporate customers in the following weeks, he saw his opportunity - if he didn't just buy the station wagon for his family, but If he leases two more minibuses for his workshop, he can save a lot of money and replace the already ailing company car. A few days later, Mr. Müller is back at your dealership and signs the contracts.

The goal is called "Conversion"

The decision to make CRM, i.e. the customer relationship a central factor in the sales process, initially led to a little more effort. Entering the data and the keywording in the CRM system took a few minutes longer than just typing the name and email address into the Excel list. As soon as the colleague does not have to re-create the data record for the test drive, this loss of time has already been made up for. The personal address in the first email and the question about the family are also an additional effort, but it is minimal. However, the conversion, i.e. the chance that a prospect will become a customer, is many times higher.

When it comes to CRM, it's not just about saving time, it's about turning the existing contacts into more customers. In short, it's about themConversion rate.

When it comes to CRM, it is not just about saving time, but above all about turning the existing contacts or interested parties into more customers. In short, it's about them Conversion rate.

Why is it worth focusing on the conversion rate and, subsequently, on the work per customer? You could also simply increase the number of people you address, for example by investing more in marketing and advertising. The reason is a simple calculation using the example of our car dealership. Suppose you collect 10,000 addresses with your information stands. For the sake of simplicity, we assume that you manage to convert 10% of the potential buyers ("leads") into the next process step. The process goes as follows: You write to the prospective customer, 10% of them respond with interest, of these 10% in turn 10% test the car in a test drive and again 10% buy the car in the end.

10,000 leads -> 1,000 responses -> 100 test drives -> 10 buyers

What if we increase the number of leads? Of course, we are also increasing the number of cars sold (at least in an "ideal" world without saturated markets, etc.).

17,000 leads -> 1,700 responses -> 170 test drives -> 17 buyers

But what if we manage to increase the conversion rate from one level to the next by just 2 percentage points to 12% with a good and professional service?

10,000 leads -> 1,200 responses -> 144 test drives -> 17 buyers

The result is that with a minimum of additional effort and improvement, sales can ultimately also be increased by 70 percent. But what wouldn't you have to do to get 70% more qualified leads? And all for the same result! The costs and the additional effort for information stands, material, personnel costs, etc. would be considerably higher than for better service between and during the individual process steps. This is exactly where CRM comes in.

In which areas does CRM apply?

Some points that make it more likely that Mr Miller is buying the car from you are immediately apparent in the example above. The discount will certainly make it easier for Mr Müller to buy now. However, it is more important that they feel that they are in good hands and that they are personally valued. You give him the feeling that it is about him as a person. In addition, the coordinated behavior of the various employees appears professional and well organized. Here the left knows what the right is doing. The customer also has the feeling that he is dealing with a team and not with an elbow salesman who is only concerned with his own commission. The sales process supported by CRM also affects many other points.

Scaling efficient sales measures

Many of the possible precautions can "scale" if used correctly, that is, the effort remains the same or similar if the number increases. Writing a newsletter always does the same work, regardless of whether it is sent to 5 or 500 people Adapted thematically to different target groups, the effort increases, but the success rate increases. The additional effort must be weighed against experience.

The number of contacts is the relevant factor

In our day and age, countless providers are simultaneously and permanently vying for the attention of potential customers. Our brain reacts to this by blocking out many of these stimuli as best it can and trying to reduce the complexity of the environment and concentrate on "the essentials". The question now is how, as a provider, does one get into this small area of ​​perception There are different approaches and theories, some of which degenerate into trench warfare, depending on who you ask. In addition, the measures used vary greatly depending on the product and target group. Without going into too much detail here, there is However, there are a few central points that overlap and one of them is the number of contacts.While it was previously assumed that there were three to seven contacts, researchers today speak of up to 15 contacts that it takes to be anchored in a person's consciousness.

In practice it can look very different. In sales and marketing, some rely on penetrance that almost causes pain (greetings to the marketing departments of Carglass or Seitenbacher Muesli), others on less intrusive actions, targeted follow-up and relevance for the recipient. What is more effective in the end, I do not want to and cannot rate here. Either way, however, it is clear that hardly anyone buys higher-priced items spontaneously when they first come into contact. This is especially true for companies, i.e. in the B2B area. "One shot, one hit" campaigns are pure luck. As a rule, follow-up is called for, ideally not with clumsy redundancy, but with additional benefits or alternative offers. To stick with the example, this means: There may be a poster or a TV advertising of the car model, which Mr. Müller even allows to come to your stand, then follows the first e-mail, then the second, the phone call, the test drive, the third e-mail and finally the sale. In between, Mr. Müller browsed through the catalog, used comparison platforms on the Internet and consult with friends. Not all contacts are under your control, but the fact that you have to show up with your company more than once and look good is almost certain. Good relationship management makes success much more likely.

Acquiring existing customers is cheap

Getting a previous customer to buy again is arithmetically about five times cheaper than getting a new prospect to make their first purchase. The reasons partly overlap with those mentioned in the last section: People reduce complexity in order to find their way in everyday life. To fall back on the well-known or even tried and tested and thus to keep the risk low seems more attractive than perhaps getting a better offer elsewhere. In addition, it is simply easier and less costly than constantly researching anew. In order to be able to address existing or existing customers in a meaningful way, there is no avoiding well-maintained customer data. The chances of suddenly reaching the 60+ housewife who has been driving a small car to supermarket shopping for years with the new luxury SUV campaign are manageable.

They still exist, the loyal ones

Even if it is emphasized again and again in sales training that there is no longer any loyalty to the supplier and that only the price counts; that's true, but by no means for every product. Cars in particular are a great example where everyone knows these people who have always bought their XY brand car from dealer YZ and will continue to do so until the dealer retires. Often these are the best customers one could wish for, but they also need care. If they come across someone else every time they visit, every time they call, and have to tell "their story" anew there, your product has to be really unique, otherwise the bond is gone. The bond on a material level is largely interchangeable, the bond on Personal level is unique and much more long-term. Especially where the really personal, individual treatment can hardly be sustained, precisely because the boss cannot personally receive every old customer, the history in CRM is worth its weight in gold. Then even the intern can offer a coffee with the words "Hello Mr. Müller, nice to have you back at the house. I have just seen that you have been our customer for almost 20 years, that's great! What was your first car model? At that time, you determined the senior serves, right? ". As a regular customer, Mr. Müller feels valued and treated personally, even if the intern heard his name for the first time five minutes ago.

You can know 10 customers, not 100 customers.

To be able to receive customers personally is great. You may have a common history or a business partnership, you can assess and rely on each other. This works wonderfully in some business areas and with ten customers. But when your own company grows and you suddenly look after 100 or 500 customers as a sales representative, at some point you get close to personal reception. Then you have to be able to look up what you talked about last time, which negotiation result you ended up with and which points were still open. When Mr. Müller announces in a conversation that he intends to renew the vehicle fleet for his fitters, probably in a year when the leasing contracts expire, his phone should ring in six months at the latest. Such reminders can be displayed on a small scale using your own calendar, but if you have a large number of customers or, at the latest, if several people are involved in the sales process, the CRM software must be used. Then even 500 customers can be treated comparatively "personally".

A satisfied customer brings new customers

The best marketing that can happen to you as an entrepreneur is referral marketing. A customer is much more than just a customer, he is an ambassador for your company. The way you treat him or her, how this message goes is in your hands. You can't please everyone and whoever does everything to avoid criticism will never offer an outstanding product. But treating a person professionally, nicely and personally, as described above, often does not cost a cent more than dismissing them anonymously. The well-treated customer brings his friends with him the next time, the badly treated sends them to the competition. As much as this may seem like a truism, this knowledge is rarely found implemented in everyday business. CRM, or the decision to put the customer relationship at the center of sales and marketing, is definitely the first step in this direction. And with the right CRM software, small companies in particular can play out their "personality card" and show off really big.