Cafe Blinds CRM
This is an extract of George Slater’s book on CRM which is very relevant if you are a Cafe Blinds business and looking at getting a system to follow up on your leads.
3. Control your sales, operations and profit
How you can control your sales and therefore your operations and then your profit.
“How is this possible?” I hear you say. “I’ve been in business for years and the business either comes in or it doesn’t.” “I’ve never hear of CRM.”
It turns out that a Customer Relationship Management System, (which I’m going to shorten to CRM System from now on) gives you wizard-like control of your business. Let’s look at some details.
First get rid of customers you don’t want – high cost and low profit customers. Second, attract customers that you do want, the lower cost, high profit and great referrals. Without a CRM system this is impossible. You could start this as an index card system. A card system can work and I’ve used them. But the costs of the un-automated tasks mount up. However, with computing and applications so inexpensive it pays to use a software package.
Now back to the system itself. To know how much a customer is costing and how much you make from them, you obviously need detailed information. For example: the invoices to that person or company and also the number of interactions with that company/business – how much attention they need. It’s important to know the number of interactions, because a lot of businesses take a huge amount of time servicing their bigger customers. These customers spend a lot but also get big discounts and many visits by different people in your company. They may also call you a lot and pay you late. Sound familiar?
It is also likely that you have customers who buy a reasonable amount, hardly ever call, pay on time and give you other business.
What you want is a CRM system to show you the real cost of all the interaction. What you’ll probably find if you do a quick analysis of your top 50 customers, is that many of them are in fact draining the resources out of your company!
You could probably drop many of these customers, pick up a third as many new ones, have better contracts and make far more profit. Once you have the facts, dropping your largest customers doesn’t seem so scary. And there’s another thing: 80% of the time you can just re-negotiate with them and not lose them at all.
The next step is to split your customers into high profit and low profit ones. You work on the low profit ones by upping their prices, or putting things in their way to stop them burning your resources. For example: allow them only five calls for support before you make them take training, or buy a service pack, etc.
Let’s say that in your business you had three buttons: ‘more business’, ‘more profit’ and ‘stop’. Do you think you could control your operations and ‘net’ profit a little easier? That’s: not getting whacked with overtime; able to schedule resources and cash easier; able to pay a bill when it comes in, etc.
With a CRM system the button maybe: ‘send out an offer with our newsletter”; ‘have a sale day’; ‘stop sending this to …’
With the high profit customers you work out how you can service them even better and sell them even more high-priced goods or services.
This is how you can control your sales, operations and profit. It’s what a good CRM system will help you with. But about getting more sales? Patience. That comes later in Chapters 12, 14 and 19.