Customer Relationship Management

Notes from Khanchana Nagaraj – Senior Consultant with the Infosys CRM Practice on CRM investments in the current economic scenario.

I have been pondering about the increased need for organizations to invest in CRM now amidst the financial crisis as the customers are keeping a tight stringed purse where every penny needs to be judiciously spent. This situation creates a pronounced need to have convincing campaigns, innovative offers/ promotions, new incentive models for sales force and partners with impeccable customer service.

Focus may need to move away from attracting new customers to retaining and graduating the existing customer base in the value/sales chain through cross-sell and up-sell mechanisms. The importance of motivating Sales and Resellers (Partners) in both B2B and B2C scenarios is critical during this phase.

What are the CRM Focus areas during this crisis period?

Your primary objective is to convince the customer of receiving value for his every dollar. This can be accomplished through well sketched marketing campaigns. But there is a challenge. The internal Marketing budgets themselves coming under the axe, the key is to do judicious and focused marketing efforts. Hence the best place to start is the Install Base of existing customers. Identify the Customers who have significant potential / tendency to purchase based on Up sell/ Cross –Sell tele-campaign.

Pronounce the pain-point and highlight how your offering (product/services) would address his need/pain point of the hour. Ex: One gets to observe that even FMCGs are resorting to justifying RoI of their short-lived products ranging from cosmetics to perishables!!! Recent ads to woo the buyers about the longevity of the soaps / bulk purchase offers to clear stocks and cut storage and logistics costs are just the beginning of survival mechanism we are observing in the market. One word of caution is to watch out for brand dilution as you may be running a risk of exposing your erst-while project margins by deep discounts you are able to provide now. This, once the market booms, may cause serious repercussions to sales. So a knee-jerk reaction must be avoided and a much thought –out, far-looking strategy must be laid out.

B2B marketers have a different challenge as the revenue stream can be strengthened by investing in relationships with partners/re-sellers. The partner management components of a CRM Package would be key in this juncture. A quarterly or a half-yearly incentive plans to motivate increased selling efforts by resellers would do wonders in the time of recession. Rewarding him more for the greater challenges in market place would help him go the extra mile to win the customer/new deal that you are vying for.

Incentive Compensation can be put to best use now to come up with attractive incentive plans for your sales folks. Analysis of plans that resulted in maximum sales performance and impact can be done from reports and decisions made to roll-out new plans.

Customer Service Modules can help you gauge the customers who were the happiest and the most piqued. Address both of them earlier with newer focused campaigns and later with promotions/free offer to not lose as you would be spending many times more to gain a new customer than to retain existing one.

Online web store presence can be best leveraged as maintaining offshore presence would become more and more expensive with skyrocketing realty prices and labor and space related overheads, transportation, logistics and storage costs.

Have new mechanisms to incentivize and motivate customers to buy online. It helps customers save on their fuel bills by getting the goods with a click. LEAN should be the key word now as demand is reduced and storage costs higher. Newer methods need to be invented to tackle pressures on revenue stream.

Establish new vendor relationships to deliver efficiently and effectively online /off-the-web and trade management and partner management modules can help you achieve this purpose.