Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with Brent Leary @BrentLeary. Brent is Co-founder and Partner of CRM Essentials LLC, a CRM consulting and advisory firm focused on small and mid-size enterprises. CRM Essentials has trained thousands of business people on the benefits of best practices of implementing CRM strategies and technologies. For more information check out www.brentleary.com
SmallBizLady: Why are people saying customer service is the new marketing today?
Brent Leary: As noted in an August 2011 Forrester Research paper, “The traditional view of customer service is blurring into all areas of the customer life cycle. Savvy eBusiness leaders recognize the growing alignment of service, sales, marketing, and brand to engage customers in an ‘un-fractured’ customer conversation.” But a recent study from Maritz found there are a great deal of companies that don’t get it, as 70% of businesses surveyed completely ignore their customers on Twitter.
An example of the need to un-fracture these conversations is identified in TOA/Zogby’s 2011 Cost of Waiting study. The study reported a strong link between customer relationship longevity and their perception of service quality; 70% of respondents said they would recommend a company solely on its ability to keep service appointments on time. That figure drops by 43% if a service technician is 15 minutes late — which triggered some customers to broadcast their frustration on social networks using their handy mobile phones and tablets. After an hour’s wait, almost half of the customers surveyed posted outright complaints on social channels.
Asked why a company would make them wait for service, the number one responder answer was that these vendors don’t value the customer’s time, which is “as precious as their money”. Such a negative impression costs the business extended customer relationships, referrals from otherwise happy customers, and a tarnished reputation online. The bottom line: every minute counts in the relationship between prompt service and customer loyalty.
SmallBizLady: What is CRM?
Brent Leary: CRM is short for Customer Relationship Management. There are many long drawn-out definitions. But for me the easiest way to explain it is a company’s approach to finding, catching and keeping good customers. This typically includes defined processes for sales, marketing and customer service — and the applications used to implement these important processes.
SmallBizLady: Why is it worth it for small businesses to invest in a CRM system?
Brent Leary: It takes a great deal of effort to generate sales leads, qualify them to see if they are good enough to spend even more time and effort on to win them, and then keep them as long as possible once they’re on board. And in this economy it’s more important than ever to hold onto customers, as they provide valuable referrals to more like them, which cuts down on the cost of acquisition.
While in years’ past CRM tools and services were expensive, hard to use and required a great deal of technical support, now with the cloud all that has changed. Services are very affordable (some are even free to get started with), much easier to use, and can help companies to build longer relationships with customers. And with the rise of social media, CRM tools and strategies really can help all the way from content-creation through to closed deal and customer support.
SmallBizLady: What do you need to do up front before implementing a CRM system in a small business?
Brent Leary: You have to do the up-front work of analyzing what you are trying to accomplish, first. What specific challenges are you looking to address? What metrics will you be tracking in order to know what success is? Who are the people who need to be involved in order to have a full understanding of the issues? What processes need to be added, changed or deleted — and what impact will that have on the customer?
These questions have nothing to do with technology, but by doing a needs analysis with representatives from all stakeholders (employees, customers, partners, vendors, etc.) you stand a much greater chance of selecting the best CRM service(s) for your company.
You’ll want services which will fit with your needs, will integrate with applications you depend on, and map to the business models you need to engage your customers and prospects the way you’ll need to.
SmallBizLady: How have CRM systems evolved over the past few years?
Brent Leary: CRM has always been broken down into three main areas — salesforce automation, marketing automation and customer service. So basically CRM is all about tools and processes a company puts in play to help them find, catch and keep good customers — and today it’s also important to put tools and processes and play to make it easy for them to find you.
Traditionally, CRM’s strong suit has been improved operational effectiveness, easier access to information, and improved interdepartmental collaboration. While these are critically important to the success of any business, the focal point of these areas are internal to the company. And while a more efficient company should have a positive impact on customer interaction and responsiveness, does it really help us to meaningfully connect with those potential customers empowered in a social world?
Social media adds this missing dimension to the traditional, operational areas of CRM. The integration of social media into CRM strategy – called Social CRM – differs in focus from traditional customer relationship management in a few key ways. It’s content driven vs. data driven, conversation-focused vs. process-focused, and people/community oriented vs. operationally-oriented.
SmallBizLady: What has been Amazon’s Impact on CRM?
Brent Leary: While many may still view Amazon.com as a bookseller, they have become so much more than that. In many ways they are both the original social network platform and a cloud service platform — all based on the foundation of their ecommerce expertise. But it’s that foundation — technical infrastructure and e-business expertise — that makes them unbelievably important from a CRM standpoint. Amazon created a social network on top of the transactional foundation of selling things by allowing people to create profiles, rate books, comment on them, and suggest related books they may want to buy — all the staples of social networks today. They created affiliate programs to entice people to help them sell books, and when they got the whole process down for all of this for books, they used these processes to sell other things — based on customer information they gathered and analyzed.
This on its own merits Amazon.com attention, but what makes them one of the most influential “non-CRM” CRM companies is how they’ve taken all their know-how and infrastructure and have made it available to any business willing to pay relatively small fees to use their cloud services. And businesses of all sizes are taking them up on their offer using Amazon’s cloud services to run a number of their mission-critical, customer-facing apps.
SmallBizLady: Can you give us a list of your top picks for CRM services for small businesses?
Brent Leary: It really depends on the specific needs and focus of the small business.
For more traditional CRM needs services like ZohoCRM, SugarCRM and HighRise are pretty popular. Our email-centric Avidian Prophet adds lots of CRM functionality to Microsoft Outlook, and Yesware is also packed with functionality for sales-centric email users. Or if you live on your iPhone/iPad and you need to manage your relationship from those devices, then VIPOrbit might be something to consider.
Companies more focused on the social side may want to take a look at services like BatchBook, Nimble, SproutSocial and HootSuite. Commun.IT is another one to look at if you focus heavily on Twitter.
If you are more into marketing and have more sophisticated automation needs, InfusionSoft, Pardot and HubSpot offer lots of bang for the buck.
If you are really focused on providing better customer service, then you’d want to take a look at Desk.com (a division of Salesforce.com), Zendesk and an emerging service out of Israel — nanoRep.
Many of these companies also integrate with each other. Hootsuite and Hubspot have a new integration that actually allows you to see leads generated from the Hubspot marketing platform in your Hootsuite dashboard. Nimble also integrates with Hubspot to move leads into their social relationship management tool. And, recently SproutSocial and Zendesk announced integration tying Sprout’s social relationship management tool with Zendesk’s customer support ticketing system.
Doing the upfront work will make it easier to determine what kind of tool will do the trick, and which vendor will be best suited to deliver it.
SmallBizLady: How has the subscription economy changed the role of CRM in business?
Brent Leary: The subscription economy is a whole different way of thinking. The old way is a 20th-century way of thinking anchored around manufacturing, where you think about your product and how many units you can ship. The new way of thinking starts with the customer:
- How many customers do I have?
- How many customers did I have at the start of the year?
- How many customers have I acquired?
- How many customers have I lost?
- What is my average revenue per customer?
Perhaps, if I am more sophisticated, “How do I segment my customers into high, medium and low value customers? How do I move them up that chain? How do I get a greater share of wallet?” It’s a way of thinking of the customer as a user of your service on an ongoing basis, and coming up with subscription-based plans that allow them to opt for the plan that best suits their needs at that moment.
So customer relationship management strategies have to be flexible enough to keep up with the changing needs and demands of the customer — which will enable businesses to stay connected with them longer and created relationship-based companies as opposed to product-based companies.
SmallBizLady: Can you give an example of how a small business can establish a subscription service?
Brent Leary: How does that apply to small businesses? Perhaps you run a print shop. You can have a transactional mindset: People come in, pay for a print job and that transaction is completed. Or, you can say; “Why don’t we put all of our customers on a plan?” There can be a zero-dollar-a-month pay-as-you-go plan, or a $200-a-month plan where you get 10 percent off all of your print jobs. On the $1,000-a-month plan, you get 25 percent off of all your jobs and priority placement in the queue and a dedicated account manager, or something like that.
SmallBizLady: What are some keys to being successful with CRM and Social CRM today?
Brent Leary: It Takes a Platform to Raise a Community…and a Business. Nimble.com, a cloud-based social relationship management service for small businesses, has a very interesting approach to developing their product. The application was built with two things in mind up front: the application programming interface (API) and the community. They built the API first, and then used it to create the actual application. They did this in order to say to the community of developers they were courting that they will be able to build their apps using the same tools Nimble was built with. The philosophy is that by giving the community access to the API up front they will be empowered and motivated to create and extend the application more than the company could do on its own. And the customizations and apps that this community builds would help populate the Nimble market place they are planning on opening up as a way to build a Nimble ecosystem.
SmallBizLady: How can making it easier for customers to complain benefit a small business?
Brent Leary: Earlier this year, Desk.com’s SVP of Marketing Matt Trifiro did a great presentation called The Velocity of Customer Service in the Social Age. Here are a few great nuggets he shared that really drive things home:
- A customer who complains and has his/her issues resolved most likely will continue to buy from you. One who complains and doesn’t have their issue resolved most likely won’t
- Only 50% of customers will complain. What do you do about the other half who never complain, but just go away after a bad experience?
- 70% of customer service requests made via Twitter go unanswered
- Providing service over social channels will increase the likelihood of reaching those customers who wouldn’t complain via the phone, which helps you keep them longer if you resolve their issue
- In this high velocity world a dollar today is worth 12x what it is a year from now.
- Engaging with your customers sooner and faster will yield larger revenue to your business.
SmallBizLady: How do you pick the right CRM service?
Brent Leary: If you don’t have IT expertise in-house and you don’t want to hire it — go with a cloud-based solution. If you do most of your work through a mobile device, make sure the solution you choose has a good mobile interface. Also look at the pricing models as many vendors today now let you go month-to-month, instead of locking you in for a year. You may get better pricing, but it comes with the lock-in.
If you choose a cloud-based system make sure you can easily export the data out of the system just in case you’ll want to move to a different system at some point in time. And you’ll want to look into their app market places to see what kind of 3rd party applications are available, as a robust apps marketplace offers easier ways to extend the applications ability at a less expensive cost than manual integrations.
Lastly really look at the level of customer service that will be provided. Some vendors will offer limited hours or communication channels, which may be ok if you’re a pretty experienced user. But if you need more support make sure you choose a vendor that can provide you with what you need. And if you’re looking for local support see if either the vendor has a professional services team in your location, or if they have certified partners nearby that can help. And if you need help best practices or business use cases for your particular industry, ask the vendors if they have any case studies of folks in your industry that have used their application/service.
If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. Here’s how to participate in #SmallBizChat: http://bit.ly/S797e
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