What impact does an economic downturn have on your business?
Manufacturing and energy industries will experience a hit to revenue.
You might already feel that sales cycles are getting longer.
Or your customers are hesitating with making purchase decisions.
All of which have a business impact down the line.
What should your organisation do?
In an economic downturn, it’s a smart idea to look at three things:
1. Business health
2. Customer churn
3. CRM process
While there’s a lot of market speculation about a recession, we are not in one yet.
But given the signs, it’s a good idea to prepare for the possibility.
1. Business health
The goal is to make sure you come out on the other side.
Instead of letting fear and uncertainty get to you, here are a few proactive things you can do today:
Figure out where you stand – What does your pipeline look like for the rest of the year? Mark potential deals which can close this year, and what moves to next year. You’ll get a good idea of what needs to happen next.
Audit all expenses – Ask your different departments to look at their expenses. What could they do smarter? Where can they cut expenses? Get rid of anything that doesn’t produce significant, measurable value.
Re-evaluate non-core projects – You have a list of projects on your desk that are up for approval. You'll have to decide which projects to keep and which to postpone. Not everyone will be happy with the decision, but it’s a necessary evil.
2. Customer churn
As you are looking at the health of your business, your customers are doing the same. Of course, you’ll both only want to keep things which give your company value.
That brings us to customer churn.
Customer churn is defined as the number of customers that leave your business during a certain time period.
It happens due to one of two reasons:
1. The customer goes out of business
2. The customer doesn’t achieve the desired outcome
You have no control over #1, but you do have total control over #2.
Customer success happens when customers achieve their desired outcome every time they interact with your company.
The combination of success is WHAT you provide and HOW you help them achieve their goals.
That means every customer-facing department has an impact on your customer's desired outcome. This includes sales, marketing, onboarding, implementation, and customer success management.
But you can't use the same approach for every customer.
So how do you do this in a structured way?
That leads us nicely to the process.
3. CRM process
CRM processes structure customer interactions.
They help you provide meaningful and personalised support throughout the customer journey.
CRM processes are different from a CRM platform.
A CRM system is the software, with lots of features, to help you execute the processes.
If you Google “What is a CRM process”, you’ll find 165 million results which say the same thing – generate brand awareness, acquire leads, convert leads into customers, provide great customer service, and drive upsells.
That’s all true. But that’s the outcome - how do you get there?
That’s the piece that’s often missing.
And while it doesn’t have an official name, it's essential to growing your business.
This is the process we use at SuperOffice - we call it the Customer Experience Method, or CXM.
CXM is a structured CRM process and method for customer retention and loyalty. It puts you in control of your customer base. And when you do this, your customers are happy, you reduce churn and you also increase the possibility for more business.
A 5-step CRM process
Here’s how the CRM process works:
1. Start by defining the type of account
Let’s say you have 700 B2B customers in your company and a 5 person sales/ customer service team.
How will you follow up on all customers and make sure that nothing falls through the cracks?
Pretty hard, isn’t it?
Your teams need clear guidelines on how to handle different customers.
One way to do it is to tag your accounts according to possible sales opportunities.
Expand = Users are expanding. There’s a concrete upsell or possibility to purchase more products.
Retain = They’re fine the way they are. There’s no concrete upsell opportunity. (If this is true, you might want to consider if you’ve visualized value or opportunities.)
Now you can assign the accounts.
In our example, you have a team of 5 people.
Let 3 salespeople spend 100% of their time covering new opportunities (Expand).
And put 2 people on Retain accounts to keep them warm and nudge them towards Expand (when they’re ready).
This model lets your customers get the support they need without feeling like they're being "sold to" all the time.
Let’s move onto the next step.
2. Categorise your customers
It’s impossible that all 700 of your customers would get the same level of attention across the board.
That’s why the next step in the CRM process is to categorize your customers.
One way to do it is by revenue and product line, per country. Here’s an example:
Once you’ve got your categories set, go into your CRM database and mark which customers belong to which category.
You’ll probably find that those who are in your A category are your biggest customers. Your D customers are probably your smallest customers.
Based on how important they are to your business, you can then create and execute a customer marketing communication program.
3. Define the frequency
How often will you be communicating with your customers?
To answer this, you need to define the frequency.
Please note that there is a difference between human and digital activities.
Digital activities can be run year round. Human activities such as customer visits, roadmap reviews and in-depth calls can’t and shouldn’t be run year round.
The below chart is an example of how often your teams could contact different customers based on their segment:
4. Define the activities
Developing profitable, long-term customer relationships can't and shouldn't be left to chance.
That's why it's important to put processes and structures in place. The same thought process applies to the types of activities you’ll execute towards each customer group.
Here’s a sample of what a defined activity plan for “Expand” could look like:
5. Support the process with a CRM system
Now that we’ve got the process in place, you’ll want to support it with a CRM system like SuperOffice.
The system can be set up so that you can mark whether an account is X or Y..
You can also set the customer category. In our example above, that would be A,B,C,and D.
You can automate most of the process when you have a powerful solution like a CRM.
For example, you can set up the CRM system so that salespeople get a list of the accounts that they should follow up on during the week every Monday. The sales rep can go through each account in the list and use the customer program to identify the tactics they need to implement.
Not only does this take out the manual work, but your internal teams never have to guess again on what they should do.
Supporting the process with a CRM system makes life a lot easier for everyone.
The company with the most relevant customers wins
Strong and profitable customer relationships can help you weather any storm.
We all understand the theory, but how do you put that into practice?
As I said in a previous post, it first starts with the CRM strategy.
Once you have that strategy, you have to start putting CRM processes in place.
The example I shared with you is one step towards ensuring customer loyalty and retention.
Please keep in mind that what I gave you was an example. Feel free to modify it and make it your own.
Once you start putting the process into practice, you’ll find out:
Where you can add more value
How satisfied customers are with your product/ company
Where you can improve
What you need to do to improve
In the end, the company with the most relevant customers wins.
So here’s to your company winning.
First comes the strategy, then comes the process. Now all you need is the software.
That’s where SuperOffice CRM comes in.
Book a demo today and one of our sales experts will walk you through the solution and show you how to implement your own CRM process.