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Not investing in CRM is more expensive than implementing it!

Retaining customers and promoting advocacy are critical for success. Do your teams have the tools to optimize customer experience?

Executive Summary

The key to success in this decade is retaining existing profitable customers; because it has several benefits like cost-effective word-of-mouth marketing, cross-selling opportunities, predictable demand forecasting and more. Customers will remain loyal if your products and services simplify their life and match their needs.

Without the proper tools, all customer facing teams find it challenging to maintain a positive customer experience, increase rapport and retain customers. Sales teams spend too much time on non-core activities and struggle to access real-time information. Information collated from multiple channels is not available centrally and effects the performance of all teams.

In today’s product conscious market, it is important to focus on simplifying the life of customers and optimizing their experiences when interacting with your organization through any channel. Cutting costs by finding stop-gap solutions will only temporarily solve an existing problem. Also, creating in-house systems without industry best practices will not be scalable and lower productivity in the long term. Maintaining, enhancing and upgrading these systems to match new requirements and larger volumes of data will not be cost-effective.

Recommendations

  • Ensure the CRM solution is scalable.
  • The user interfaces should be easy-to-use and encourage adoption
  • Create a future proof CRM strategy by collating inputs from all relevant stakeholders

Invest in CRM?

Are you wondering if investing in a CRM solution is a wise decision? Let's look at how popular it is - worldwide CRM revenues touched $9.14 billion in 2008 and the total software revenue growth for CRM software in 2010 was 14.2%, returning to the double-digit growth trajectories observed from 2004 through 2008. Weaker growth of 1.3% in 2009 reflects tighter budgets during the economic downturn, resulting in sharp declines for new license revenue among many vendors (source: Gartner).

Let us begin by exploring what are the common reasons companies often site for not investing in a CRM -

  • We already have some single-problem solutions
  • We are not in the business to use CRM
  • We're too busy with other initiatives
  • We think it is too expensive to implement a CRM
  • We think it will take too long before results are seen
  • Isn't CRM for bigger organisations?
  • Isn't CRM for call centers?
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Until a serious CRM initiative is underway, the primary source of customer intelligence in an organization remains the finance department. No wonder so many decisions go wrong!

In absence of a comprehensive CRM solution, businesses often spend up to 70% of their time on non-core activities - valuable time lost that lowers productivity. This means that when companies look to do more, it is natural for them to look at adding more people, hence directly inflating fixed cost. Is there a smarter way to do more with less? To answer this, let us begin by exploring what causes productivity to be drained and the associated cost implications.

As most organizations grow, seldom do they change the way they do business with their customers. This means doing more of the same in larger volumes rather than optimizing the way itself. Let us examine some of the top ways that productivity is drained -

Struggle for information

Does your team have access to unified customer data on a single click? Often teams spend a lot of their time trying to collate data from various systems or departments to create their version of the truth. As companies grow, the struggle deepens, resulting in a further dip in efficiency.

Interdepartmental coordination

You know that your customer needs certain things done in a hurry. However, fulfilment often spans multiple departments, each with its own priorities and problems. Hence, valuable time is lost in chasing various departments to ensure work is done within the expected time-frame. Worse, it is often impossible to get accurate status visibility across departmental walls, directly compromising the team's abilities.

Effort duplication

A lot of time is spent chasing similar accounts across departments, building individual bridges, attending to duplicate leads or services requests across channels, etc. This drives up transaction costs and inversely impacts team productivity.

Impact of attrition

With attrition companies often lose visibility into sales pipelines, contacts, prospects and deal navigation strategies. While some of it can be salvaged, in absence of a process, data is seldom available. It is estimated that more than 81% of pipeline momentum is lost, as new account managers struggle to reclaim control.

Relationship rebuilding

In absence of CRM, there is no common platform to keep structured relationship information like interaction history, key contacts, account insights, preferences etc. Hence, years spent in building relationship are either not leveraged by other departments or lost to attrition.

Non-correlated reporting

Due to a mix of excel reporting and various systems it is often impossible to correlate reports. Hence, visits can't be accounted for, claims can't be verified and false movement is hard to detect! This directly impacts the ability of the management to do mid-course correction for strategies.

Investing in CRM

After analysing how crippling it is without a CRM, let us look at some of its advantages-

Reduce wastage, improve process efficiency

CRM empowers organizations to become more customer-centric by streamlining processes and practices. In the areas of marketing, sales, servicing and delivery it reduces cycle times considerably.

Pipeline visibility for mid-course corrections

Sales managers and representatives get an end-toend visibility into their pipeline due to sophisticated organizational tools - a key to take decisive course correction actions.

Improve satisfaction and build customer loyalty

By offering reliability and consistency, CRM software paves a concrete path towards living up to your brand promise and improving customer loyalty plus strengthening relationships.

Make call centers more efficient

Speed up information dissemination with consistency and accuracy by giving employees all the information they need within their capacity.

Increase cross-sell and up-sell

With the advantage of having a full 360° view of customers, employees can easily cross-sell and upsell to customers based on their buying patterns and profiles.

Identify new customers

Identify new customers by running marketing campaigns that ensure promotions do not target customers who have already purchased that particular product. Employ selective targeting of potential customers based on the buying patterns of existing customers.

Simplify Processes and Procedures

Allow sales reps to concentrate on their primary activities, making them devoid of data integrity checks, timely escalations, inter-departmental flow routing, etc.

Conclusion

A CRM solution is a strategic imperative that ensures an organization has all the operational tools necessary to enhance performance and increase customer retention. Its analytical and collaborative/social capabilities are unmatched and available for users through any web enabled device.

Unlike most in-house systems which are usually considered as 'policing' tools, CRM solutions ensure your marketing, sales and customer services teams are working collaboratively towards improving customer experience and optimizing products. It can seamlessly integrate customer information from multiple systems and different departments to display a single page with a holistic view of your customers. CRM solutions are cost-effective and generate quick ROI by improving campaign strategies, streamlining sales and empowering customer service teams with better automation and analytics for large volumes of data.

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