BENEFITS of CRM STRATEGIES for MANUFACTURING
Successful CRM deployments are typically driven by the CIO, CFO, the CEO, or someone else at the executive or senior management level within the organization who has the influence to effect a cultural change. The adoption of a CRM culture has to come from the top; if it is left to a “grassroots campaign” to roll out CRM in a single department, the deployment will likely fail to have a significant impact on the company overall. A central facet of CRM is the centralization of processes and data within a single system; this requires a company-wide initiative that is best promoted by a top company official.
Automation is only as good as the processes it automates. Applying technology to poor business processes simply amplifies the problems and makes them more visible to customers and partners. Any successful CRM implementation must incorporate a careful review of the underlying business processes to ensure that problems are avoided, not replicated, in the CRM workflow.
User Adoption Initiatives
Employees can be resistant to change, but it’s the users that make a CRM implementation successful. Involving representative employees in the process right from the selection stage can help give them ownership of the project and encourage user adoption. Many manufacturers also alter sales and incentive structures to encourage the adoption of CRM applications—particularly those that include sales force automation functionality.
Goal Definition and Tracking
Manufacturers that clearly define their CRM goals and determine in advance how they are going to track performance against those goals are best able to measure the value of their CRM projects and make adjustments where needed to ensure success.
Avoid Evergreen Contracts by Ensuring Compliance. Based on our research in the manufacturing industry, a large number of active contracts are extended by default and almost half of them are in their second extension. What this results in is undesirable evergreen contracts because enterprises lack visibility into contract expiration dates, which prevents them from renewing or revising contracts in a timely manner that pre-empts unnecessary extensions. Staff needs to be alerted in advance of contract expirations so they can proactively renegotiate the terms of the contracts and renew expiring contracts. This challenge is common across many kinds of manufacturing firms, and it has a distinct impact on revenues.
Using a CRM solution allows companies to track the start and end dates of contracts, as well as revenue events. Using this information, the system automatically creates a new opportunity a few months before the contract expiration date and assigns it to an account manager for follow-up. The account manager can then either renew the existing contract or negotiate a new one, and in the process, they can also up-sell and cross-sell additional products, obtaining extra revenue and profit. Commencing this, months before the contract expiry date ensures there is adequate time to troubleshoot problems and pursue opportunities in time to meet the existing contract deadline.
Not only is it important to use your CRM system to manage contract compliance and contract expiration, but sometimes there are also other revenue-generating events that take place over the lifespan of a contract that need to be managed. For example, many manufacturers have contract stipulations that give them the right to increase the unit price by five percent per annum on the condition that they inform the client 30 days in advance. Managing such a process with a system such as SugarCRM can help companies earn additional revenue with very little effort.
USING CRM TO ITS FULL POTENTIAL IN YOUR MANUFACTURING BUSINESS
Being customer centric is not only about streamlining the fulfillment process, it is also about personalizing and optimizing every contact you make with your customers at each stage in the sales and service cycle. Any kind of touch-point you have with customers—whether it is over the telephone, through a website, by e-mail, or in person—has the potential to deepen your relationship with them and extend their loyalty to your company.
Many CRM systems offer marketing automation solutions that help manufacturers reach out to prospects and customers, delivering personalized, relevant communications that build on the information collected about their needs and preferences over time. These systems help manufacturers generate and qualify sales leads and distribute them to the sales force for follow-up.
CRM also helps manufacturers capture the unique attributes of individual customers, enabling them to develop the customer intimacy required to build long-lasting relationships. At the same time, the CRM solution helps them determine the group trends and similarities between customers, allowing manufacturers to segment and target both customer and prospect groups more effectively. This dual insight—on both the individual-customer and group-trend levels—helps drive additional revenue and profit opportunities from both existing customers and potential ones.
Manufacturers also often have multiple sales teams, with some salespeople focused on specific products, some on specific markets, and some on specific geographic areas. This can lead to complex territory management issues for sales managers. CRM systems offer territory management tools that allow managers to effectively assign their salespeople to the right accounts and track their activities in those accounts over time, leading to better visibility into salesperson performance and the probability of each deal’s successful closure. In turn, this leads to more reliable sales forecasting and gives sales managers the ability to take a more proactive approach to stalled accounts.
A manufacturer’s obligations to the customer truly begin once the sale is complete. Providing high-quality customer service and support in a timely manner is essential to customer retention and a major competitive differentiator. Customer satisfaction and loyalty directly impact future revenue potential, given the relative costs of attracting a new customer versus retaining an existing one. CRM systems provide tools to help manage customer service operations, enabling manufacturers to receive service requests through a variety of channels and track their resolution. Managing this process within the CRM system ensures that no matter whom a customer speaks with, they receive informed, personalized responses, and automating the system ensures faster issue resolution. Both these factors contribute to higher customer satisfaction and improved relationships.
CRM solutions help manufacturers manage the full customer lifecycle, collecting customer information and insight at each stage. Companies can then effectively monitor customer-satisfaction levels and respond to issues quickly, delivering additional value to customers and building stronger customer relationships that result in more customer referrals and repeat sales.
All of these features and more are at the disposal of manufacturers who choose to implement a robust, flexible CRM system. Manufacturers looking at using CRM to enhance their pricing, quoting, and contract processes should also develop a long-term strategy for leveraging the full value of CRM.
Many manufacturers resist the idea of bringing more customer focus to their companies because they have enough difficulty managing their existing processes. Product pricing, quote and order management, contract management, and other daily processes already involve enough complexity to challenge the company, without adding new concerns.
The good news is that becoming more customer centric and achieving greater efficiency in the processes manufacturers grapple with every day can come hand in hand. Using a customer relationship management solution to manage the full customer lifecycle—from the first touch-point through the sales process and post-sale service; from quote to order through ongoing contract management—can help manufacturers realize significant process efficiencies while also developing deeper customer knowledge and delivering better service. It’s a classic win-win situation for both the manufacturer and the customer.
Some manufacturers are unsure where embracing CRM and the automation of customer-facing processes should fall within their list of business priorities. The truth is that for many manufacturers, the question should not be whether they can afford to think about CRM, but whether they can afford not to. As many of the real examples from SugarCRM manufacturing customers presented in this paper reveal, failing to effectively manage front-office processes will not just hurt customer relationships—it can leech millions of dollars from a manufacturer’s bottom line.
Manufacturing organizations that deploy CRM solutions are able to better manage pricing, quoting, orders, and contracts, giving them the greatest opportunities for increased revenue and profitability. Automating these processes results in faster, more accurate execution of the quote-to-order process, contributing significantly to “perfect order” performance. Improved pricing management eliminates over-discounting and ensures every customer is quoted the most appropriate price. Better contract management increases renewal rates, decreases “evergreen” contracts, and takes advantage of contract-term opportunities.
The business landscape is anything but static. Having a fully integrated, end-to-end CRM for every step in the customer journey is essential for any business looking to achieve the most while maintaining an ease of mind! Tokara Solutions offers help in providing the best CRM for you and your company! With an average of over 18 years of CRM consulting, Tokara’s wealth of knowledge in integrating and maintaining CRM systems is rooted in our devotion to supporting small, medium and large manufacturing enterprises.