Basics of CRM

Basics of CustomerRelationship Management

The Professional MeAndrew Kamphuis  President of Vin65  andrew@vin65.com  @andrewkamphuis  Cell: 604-613-5343

The Real MeAndrew Kamphuis

Basics of CustomerRelationship Management

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Customer Experience

Does the customer experiencematter?

If you know your customers, can youcreate a better experience?

Will a better customer experience leadto more profitability?

Top 10

Top 10 Things That Annoy CustomersPromised return phone calls notmade or information not sent. 1

Top 10 Things That Annoy CustomersNot being informed of a delay. 2

Top 10 Things That Annoy CustomersOne department in the companyhaving no idea what anotherdepartment said. 3

Top 10 Things That Annoy CustomersNo one bothers to call to make surethe wine arrived – probably no callat all until they want to sell yousomething more. 4

Top 10 Things That Annoy CustomersNot being valued for yourrelationship. 5

Top 10 Things That Annoy CustomersNo one knowing what they last soldyou or when. 6

Top 10 Things That Annoy CustomersSpam! 7

Top 10 Things That Annoy CustomersStaff that ask basic questions theyshould know the answer to. 8

Top 10 Things That Annoy CustomersIVRs – InteractiveVoice ResponseSystems. 9

Top 10 Things That Annoy CustomersCustomer support or phone agentswithout access to your profile. 10

CRM is Philosophy Not Technology

What is CRM?It’s Not Pixy Dust You can’t sprinkle some and assume sales will get better.

What is CRM?It’s Not Software

What is CRM?Definition The concepts used by organizations to manage their relationships with customers including capturing leads, storage and analysis of the customers, vendors, partners and internal information. It’s the operational, collaborative and analytical approach to customers.

What is CRM?BORING!!!!

What is CRM?A Better Definition

Why CRM?Objectives Boost sales, retain customers and save money. Enhance business productivity and optimize sales and marketing.

Why CRM?Goal of CRM Bring the company closer to the customer. Increase customer loyalty = more profit.

How to do CRM Right

Philosophy -> Process -> TechnologyPhilosophy It doesn’t start with technology – it starts with philosophy. It’s a ‘customer first’ attitude.

Philosophy -> Process -> TechnologyProcess The process will make a difference, which is noticed by your customers – and your bottom line.

Philosophy -> Process -> TechnologyTechnology Don’t select the technology until you’ve set a philosophy and created a process.

Philosophy -> Process -> TechnologyPersonal Example: Vin65 In Dec 2010 our customer base topped 500 clients. We wanted a CRM solution for our customers.

Philosophy -> Process -> TechnologyAt Vin65 Philosophy  Both sales and customer service should be humanized.  Vin65 should feel like a small family company.  Customer service matters – It’s not just about sales.

Philosophy -> Process -> TechnologyAt Vin65 Process  Humans answer the phone (no phone tree).  Lead inquiry system and support ticket system that is answered by humans.  Staff members’ faces appear on support ticket responses.  Work with staff to develop personality when talking with customers.  Get staff photos on website, Facebook, Twitter, etc.

Philosophy -> Process -> TechnologyVin65 Technology  Initially used SalesForce for sales.  Home-grown support ticket system.  Built-in reporting and analytics to measure how team is doing.

Philosophy -> Process -> TechnologyExample: Vin65 Personalization Efforts

Philosophy -> Process -> TechnologyExamples: Results of CRM Efforts

Building a Strategic Base

CRM PlanDevelop a Philosophy What’s important? What’s your customer relationship story?

CRM PlanDetermine Process Who’s responsible for testimonials? Who’s responsible for irate customers? How long does it take to respond to a customer? Look at it from a sales, marketing, service, and feedback perspective.

CRM PlanCommitment at all Levels Executive management leads it. Each team member understands their role.  Tasting room staff enters the data into the system.  Billing staff understand how to deal with complaints.  Marketing staff know how to analyze the data.

CRM PlanMeasure Results Each process should have a measurable result. Monitor results over time.

CRM Plan

CRM PlanMarketing Customer knowledge  Usage habits  Demographics Analytical  Market size and opportunity  Customer value equation, CLTV, AOV

CRM PlanMarketing Perspective How much can you afford to spend to acquire new customers? Which new customer sources generate the most profitability? How can you spend to retain/reactive existing customers?

CRM PlanMarketing Perspective Identify the ideal customer.  Spending habits  Visit frequencies  Incentives redeemed

CRM PlanSales CRM puts the right offer in front of the right customer.

CRM PlanSales Perspective Customers with a good experience tell 3 others of their experience. 5% increase in customer retention means 25%-95% increase in profitability.

CRM PlanService & Support Response management  Fielding inquiries  Responding to complaints

CRM PlanService Perspective 95% of customers who have had problems will continue to do business if problems are resolved. For every complaint you receive there are another 20 potential complaints. Customers with a bad experience tell 8 others of their experiences. 68% of former customers left because of poor customer service.

CRM PlanFeedback Listening to social conversations Surveying Active conversations

Execution

Forget Philosophy – Just Want to Execute?

10 Ideas For Your WineryLearn Your CustomersDog’s Name Really know your customer – their birthday, anniversary date, etc. Find something special about your customer. Use that “special” thing when you communicate with them. 1

10 Ideas For Your WinerySend a Birthday Card Not a generic card – a personal card (nobody wants your generic card). Remember something special about your customer. 2

10 Ideas For Your WinerySegment Your Next Email Blast Club vs. non-club. First time vs. repeat buyer. Local vs. out-of-town. Make it relevant. 3

10 Ideas For Your WineryWhy Segment Your List?  Your response rate increases.  You build deeper connections.  Untargeted email is spam.

10 Ideas For Your WinerySegmented Examples  WineTasting.com – 26,000 inactive buyers  50% received a regular email  50% received targeted “we miss you” email  Results  6.75X greater click-through rate  9X more orders  28X more $$  ½ as many unsubscribers

10 Ideas For Your WineryBuild a Retention Plan Retention is the new acquisition. Know your retention rate. Understand why customers leave. 4

10 Ideas For Your WineryGet the Second Order After the customer leaves the tasting room, will they ever get contacted again? 5

10 Ideas For Your WineryListen and RespondSocially Social monitoring  Vintank  HyperAlerts 6

10 Ideas For Your WineryEnable Feedback on Your Website 7

10 Ideas For Your WineryOne Question Survey How likely is it that you would recommend our winery to a friend or colleague? Know your Net Promoter Score. 8

10 Ideas For Your WineryBuild a Spreadsheet Recalculate KPIs once a month.  Net promoter score  Retention rate  Lifetime value 9

10 Ideas For Your WineryHire a Consultant Value in giving your data to a third party and getting a fresh perspective. CRM segmentation can be handled off with little internal coordination. Easy to see ROI on this expenditure. 10

Keys to Success

Keys to SuccessKeep it Simple Start small – work your way up. Quick wins.

Keys to SuccessActionable Measurements Each plan should have actionable measurements. At Vin65 we measure:  Support – time to answer, number of tickets per client, satisfaction of client, number of tickets re- opened  Sales – new leads generated, close rate, etc

Keys to SuccessStakeholder Ownership Without buy-in the plan will fail. Need active engagement.

Keys to SuccessKnow the Value The numbers you should know:  Retention rate  Net promoter score  Lifetime value of a customer Nice to know:  Cost to acquire a customer  Money lost on each one-time buyer

Know the ValueRetention Rate The percentage of your customers from your last period that are still your customers this period.  100 customers last year.  80 of the 100 customers are customers this year.  You have a 80% retention rate.

Know the ValueNet Promoter Score Ask One Question: How likely is it that you would recommend our winery to a friend or colleague? Percentage of customers who are promoters subtract the percentage who are detractors.  Total 40 people. 25 people rated 9/10, 5 people rated 7/8 and 10 people rated you 0/6.  25/40 less 10/40 = 62.5% - 25% = 37.5% NPS.

Know the ValueCustomer Lifetime Value Best Way – Google it and download a spreadsheet. The quick and dirty way:  (customer profit/year) * (retention rate/(1-retention rate)).  If you make $40/customer/year and your retention rate is 80%.  $40 * (0.80/(1-0.80)) = $160

Know the ValueCost to Acquire a Customer Add all of your acquisition expenses for the year and divide by the number of new customers you acquired.  If you spent $100,000 in advertising and acquired 4,000 new customers you would have an acquisition cost of $100,000/4,000 = $25/customer.

Know the ValueMoney Lost on Each One-TimeBuyer  Subtract the acquisition cost (previous slide) from the average gross margin on a first time purchase.  If your acquisition cost is $25/customer and you earn $20 profit on each sale – you lose $5 on each one- time buyer.

Keys to SuccessTrain Employees Successful CRM starts with well trained employees. Training ensures consistency.

Questions?

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Basics of CRM

by Andrew Kamphuis on Jun 13, 2012

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