Lies, damned lies and statistics

Lies, damned lies and statistics, the phrase attributed to Benjamin Disraeli (though not found in his work), could be applied to the Office of National Statistics reporting for UK GDP. I'm not suggesting that there had been any underhand dealings going on but rather a desire to be over cautious that the press capitalised on

You may remember that the ONS reported UK GDP to have fallen by 0.4% in the third quarter of 2009. This caused a public (press?) outcry against the government - why weren't they doing more? At the time I remember reading minor reports that the figures were likely to be revised up towards the end of the year for very valid reasons. But, being British, the bad news was over played.

So now that it is the end of the year, it seems that the true figure for the third quarter looks more likely to have been a fall of 0.1% and may even have been neutral. See "Office for National Statistics data suggests recession already over."

What has this got to do with running a small business? Two things - first, business morale took a further battering which we really didn't need and second there is a lesson about how to turn information into knowledge. The ONS knew the factors affecting the calculations accuracy and alerted us to the possible update, but the press decided to largely ignore this.

With any management information, if one relies on the headline figure and doesn't bother to understand the surrounding information, a bad decision can be taken. Every manager needs a set of key performance indicators (information) but they must be applied with understanding (knowledge).

Getting the focus right when implementing a new system

When a new system is being implemented there are three elements that must be balanced:

1. Functionality - what it needs to do;
2. Speed – how quickly do you want it in place;
3. Price – what is the budget.

It's easy to say that we want everything, now, and at a rock bottom price but that's not the real world. It's also a recipe for a failed implementation.

In most cases, the answer is a blend of the three but the mix will determine how your project proceeds. For example, a project focused on price will almost certainly result in less functionality being delivered, whereas a focus on functionality will take longer to deliver and probably cost more. No implementation is the same so consider the triangle (right) and think about where your priorities are.

We find that there are 4 broad categories of implementation:

Balanced - requiring “a little of all of them”, is where most of our clients actually sit. They want a balance between a solution that is implemented quickly, but is somewhat tailored to their needs, with enough training to get both users and administrators up and running with a minimum of stress, effort, and delay.

Speed - A focus on speed means getting the system as fast as you can. This does not necessarily mean sacrificing functionality or quality, but can result in a higher cost. It may involve several consultants working together on a system. Speed focused implementations need careful project management.

Functionality - The functionality focus typically suits organisations that want the system configured to their specific needs, detailed user and administration training, and have lots of data to be migrated from one or more legacy systems.

Price - A focus on price looks for all options to keeping the cost down. This includes absolute out-of the-box functionality, and training to give administrators enough information to continue the learning process themselves in the use, setup and administration of the system, and to train the end users themselves.

The best route to understanding the right mix for your implementation is to meet with the vendor and discuss the options, your in-house skills and how critical the system will be. It's also worth pointing out that the mix will change from system to system and should not be a company standard

So many good causes but some just make so much sense.

I know this is the time of year for good causes to tug at our heart strings, but every now and then I hear of one that just makes so much sense.

My friends at Trovus (http://www.trovus.co.uk/) introduced me to ColaLife (http://www.colalife.org/). Colalife is a campaign to get Coca-Cola to open up its distribution channels in developing countries to save lives, especially children's lives, by carrying much needed 'social products' such as oral re hydration salts and high dose vitamin A tablets.

They are looking to build a bank of supporters on Facebook.

One version of the truth.

How many times have you questioned the information you use to run your business? That nagging feeling that a part of the management information might not be correct or you see the same information from two sources that doesn't agree. Would you expect sales information in your CRM system to match the invoicing totals in your accounts system? Probably, but there are legitimate reasons why it may not.

Businesses often have the same or similar data stored in different places and whilst this isn't ideal, it's not necessarily a bad thing. What it does mean is that greater care needs to be taken when compiling data. Time needs to be taken to understand the way each system holds data and to get a real understanding of the reporting tools provided.

Marathon Sponsorship

Thank you to everyone who sponsored me for the Florence Marathon at the end of November and I raised nearly £500 for the folks at Kids Company which is fantastic. It's not too late to make a donation at www.justgiving.com/jonathan-richards.

I wont go into detail about my time except to say that I was only 3 hours over the world record time. I think it's safe to say that the winner was tucking into his second pizza by the time I finished.

Roll on the next one - but probably not until Autumn next year.

Information overload

When I first started working as a management accountant I learnt that it was no good having loads of data unless you could turn that into information. But even information is pointless if you can't use it. For example - it's no use having all the data about your sales opportunities if you can't turn that into a report that helps you manage the sales pipeline. But even the best pipeline report is useless if it takes you hours or days to produce.

I was reminded this week that the information trail goes even further:

Data becomes Information,
Information leads to Knowledge
Knowledge develops Understanding
Understanding gives Wisdom

Data is raw and has no meaning;
Information is data that has been given meaning;
Knowledge is where information sources are gathered so that it becomes useful;
Understanding happens when knowledge becomes embedded and you can take action;
Wisdom is much higher. It allows us to determine the difference between right and wrong.

In business, nothing less than understanding is truly useful and wouldn't it be nice to have a bit of wisdom!

How often do you talk to your customers?

When I ask this question to small business owners I often get the answer 'I don't know, probably not enough.' Who can blame them with all the other pressures - cashflow, closing sales, order processing etc etc..

We go to all the effort of getting customers to buy from us and the last thing we want to do is to leave them to it, hoping that they are happy. Most people know they need to keep in contact and do so, it's just that they can't monitor it. This type of information can be at your finger tips if you have a process and a system.

Logging calls, meeting notes and email can seem like a pain when you're busy but it really is essential if you want your customer service to be consistent. If you log every customer contact it is only a short step away from reporting who you are not in contact with.

Jonathan Richards is fundraising for Kids Company - JustGiving

Jonathan Richards is fundraising for Kids Company - JustGiving


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Keeping the green shoots alive through winter

Whilst there are still two polarised views about the economy, many people I speak to are seeing a pick up in their business. Let’s face it, most small businesses have had a tough time over the past year and any sign of improvement is very welcome. For many companies an upturn sees a wave of pent up demand heading their way – the customer always needed your product but was unwilling or unable to pay for it.

To ride this wave you have you have three choices:

1. Carry on as you are but paddle faster – sooner or later you will fall off the wave. Or worse, it will overtake you..
2. Get another person to paddle with you – who wants to recruit right now when there are so many pessimists predicting a ‘w’ recession.
3. Work on improving your technique – match investment with income and build a better platform for the future.

Now is the time to look at how you are working and question if it is the most efficient way. This covers both what you are doing and how you do it.

In the HR world it is a good time to review how your organisation manages admin heavy processes. Is there away to automate tasks, leaving you to manage the people not the paperwork? HR professionals need to be out there building confidence in their teams rather than doing admin.

Sales and marketing people can always improve processes. We sales people hate to be tied down to a system but grudgingly admit that things work best when we are. I for one need to go through my sales pipeline to remove those deals that never seem to close – it was worth chasing them when I had the time but now I’ve got enough ‘winners’ to work on.

Biggest employer in the world.

I've just been looking at the results of the 2009 Fortune Global 500 and it's quite sobering. The biggest employer in the world is Wal-Mart with 2.1 million employees! Can you imagine handing out the payslips?

Slightly more sobering - if you sort the results by the biggest losses our very own Royal Bank of Scotland comes in second with a stonking loss of $43.1billion. The 'winner' is Fannie mae with a massive $58.7 billion loss.

Top 6 most profitable companies in the world? All oil or gas providers.

Have a look at http://money.cnn.com/magazines/fortune/global500/2009/index.html for more big numbers.

What use is social media?

There’s a debate going on about the use of social media in a business environment and how that relates to relationship management. Three schools of thought:

1. It is personal and should never be used for business
2. Responsible use is to be encouraged
3. "I don’t get social media and it has nothing of use for business".

The middle approach is the one I support, provided it becomes part of a bigger relationship management strategy. If a customer goes to the trouble of maintaining a Linkedin profile, only a foolhardy sales person ignores it. However, Linkedin alone will not close a deal – we must co-ordinate all our activities to build a strong relationship with each and every client.

Like every aspect of selling we have to tailor our approach to individual clients. If a client regards Facebook as purely personal then the last thing we want to be doing is using it to sell to them.

In summary, social media should become another valuable tool in your relationship management toolbox. Use it where appropriate and make it part of your CRM system.

If you are firmly of the view that social media is a fad, have a look at http://www.youtube.com/watch?v=sIFYPQjYhv8. Before you go - a word of caution. As with all things on the web treat the statistics with with some caution.

Boosting profits through customer retention

Keeping customers happy has always been important - the theory goes that a happy customer keeps on buying. Marketing gurus tell us that there are degrees of happiness with the ultimate being an advocate - someone who raves about your company without any prompting. In practice most customers don't reach that stage, they end up being just plain satisfied.

But satisfied is good, in fact it is fantastic. A satisfied customer will keep buying so long as you communicate with them. They may get tempted to go elsewhere but regular communication will pull them back.

The great thing about communicating with your customers is that it isn't rocket science. All it takes a good procedure that is well executed.

Who manages your diary?

I haven't met a CEO of a small business that hasn't got too much to do. Diary management is always a big topic and most people develop their own methods to suit the way they like to work. However, sometimes the way a diary is run has more to do with what others want - colleagues, clients & peers - rather than what is important to us.

I am always intrigued by the way that peers can affect how we run our businesses. I occasionally speak to CEOs who suggest we get our PAs to talk and arrange a meeting - I tell them that I don't have one and then suggest a date & time. They believe that this is the way it should be done but it often comes down to the fact that they don't have good access to the system they use - paper or electronic. They give the impression that it is not their job and are shocked that my diary is mine to manage. I take the view that if a meeting is worth arranging it should be booked then and there with little fuss.

Our CRM system is used by every employee and all meetings are recorded - both companies that I am involved with use the same system. Every employee sees my diary and can / must enter meetings when they need me involved. They are used to this and are very considerate but I have an office manager who juggles activities for me when needed. On school run days the system tells me when to leave and I try to get personal activities logged where relevant. I have access at home and on the move but as all employees can see my diary it is easy to call in and organise events.

This approach wouldn't work if every employee had their own diary but I haven't been in that situation since starting Centurion 15 years ago. I can see that sharing diaries may be scary at first but I personally couldn't manage without it.

Invest in systems support

I have just taken on a new client whose system has been unsupported for the last year. I first spoke to them at the end of 2008 when they asked us to quote for supporting their business critical CRM system. However other more urgent issues got prioritised and it is only now that they have taken up my proposal.

It is all to easy to drop support for business systems now that we are all looking to reduce expenditure. However this can be a false economy. In many respects software support is like insurance - you don't need it until something serious happens.

People that know me will say that I am the first to recommend saving unnecessary costs. So I suggest asking yourself a number of key questions:

• How critical is the system?
• Can I manage without it?
• What would happen if I am without the system?
• How many users and processes would be effected?
• What is the cost of support compared to the cost of down time?
• Are we pushing the limits of what the system can do?
• Do I have good internal resource to manage the system?
• Does this resource have the right skills and time to apply them?
  

I would also suggest that there are a number of less relevant but still important questions such as:

• Did I use support last year? - that is no guarantee that you wont need it this year. You probably pay for fully comprehensive car insurance and are glad you didn't use it last year.
• Am I planning to replace the system soon? If it is currently a critical system that you can not do without then support should be maintained.
• What is the cheapest support option I can get? Cheap is not always cheerful.

There are certain situations where costs have to be dramatically reduced in a hurry and I am not talking about these. However, in most circumstances system support should be viewed as an investment to manage a business risk. Talk to your provider to get the most out of a support contract and they should respond by working with you to get the most out of your system.

Investing in IT

History shows that successful companies come out of recessions more productive than when they went in - productivity compared to the rest of their industry. Research suggests that no more that 3% of information available today is digitised, so investing in business systems to release corporate knowledge can give you real competitive advantage. Importantly, it is expected that the amount of information available digitally will double every 18months.

Companies that measure IT spend as a % of revenue are on the right track. But more than just spending on IT, it means focusing IT spend on growth projects rather than running IT. Growth projects can be though of as ways to use information to your competitive advantage - eg removing admin tasks from front line employees, driving targeted marketing campaigns using customer information, automation of management information.

Many commentators are starting to talk of 'post downturn' strategies and a companies IT infrastructure should be the most important. Companies need to be highly automated and quick take opportunities as they arise. In the same way, a companies IT systems must be nimble, cost effective and high quality.

Sharing data around your company

I was party to a conversation last week where a 'traditional' salesman said ".... you expect me to share my contacts with everyone in the company? You re bl***y joking!...." This guy worked for a large corporate but I have come across the same attitude in companies of all sizes. Sadly, this view is all to common and can cause big problems if you are the owner of a small business.

It's all to easy for sales people to think that they own the opportunities they are working on. However, in a small company the manager or owner needs to know what is going on - it may be a case of survival when sales are tight. Operations need to know what to plan for, accounts need to be involved if there is a credit issue etc etc.

I don't subscribe to the view that all sales people are prima-donnas, only interested in themselves. If you talk to them about sharing their contacts and opportunities you should do it in a non threatening way - it's amazing how many sales people are a little insecure (the job sometimes demands it). Explain the reasons why you need to know what they are working on and give them an easy way to record information. Remember, you don't want them to be spending all their time on admin.

The 5 magic bullets of marketing

Marketing gurus tell us that we are hit by over 3000 marketing messages in any one day. Most of them seem to tell us allot about what is on offer but little about how it will make our lives better. When it is done well the results can be superb.

The first time I wrote this post, I called it the '5 mistakes of SME marketing' but I think we small business owners are taking enough of a beating already - hence the change of name!

Marketing doesn't seem to come naturally to small business owners so it is fantastic to see it done well. We all welcome marketing that:

1 - focuses on what the customer needs and stays away from what we want to sell,

2 - is a co-ordinated series of events,

3 - is well planned and executed,

4. - is not just an exercise in spending money!

5. - that actually generates opportunities and ultimately revenue.

The key to achieving the above? Successful marketeers understand that they need to plan, measure results and value every opportunity generated.

Handling employee expenses

With all the furore over MPs expenses it seems that many small business owners are looking at what goes on in their organisations. We are getting more and more interest in the expense management tools provided by breatheHR.

In good times, small business owners might be prepared to turn a blind eye but that seems to have changed with the focus on cost saving. Business Link have released a really useful section of their website that covers expense management - tale a look at their website...

Sales pipeline management

Managing your sales pipeline is important at every stage of the economic cycle but is vital when sales are thin on the ground. There is a lot of nonsense written about designing a pipeline that largely comes from big company thinking. It can be a simple process so long as you keep in mind one key fact - you will never get it spot on.

Sales pipeline management requires employees to understand the process, be held accountable and to take activity. The results must be measured so a reporting process needs to be agreed.

I have worked through the process with a number of clients this month. It is a 6 stage process:

1. List the major stages that you go through when working with a sales opportunity. These should not be too detailed. For example:
   1. Initial Communication
   2. Needs Assessment
   3. Presentation / meeting
   4. Negotiation
   5. Commitment to buy
   6. Order received
   7. Sales Fulfilment
   
2. Define what you mean by each stage. It is essential that all of your team understand how to classify an opportunity. For example, what has to happen when you first talk to a prospect to qualify for the 'Initial communication' stage? What has to happen for an order to be classified as 'Order Received' - verbal order or PO Number?
   
3. Attach a probability to each stage. You are trying to understand what the probability is of closing a deal at any stage. For example, you might say that 10% of new opportunities turn into orders. Or that 95% of opportunities where you get a commitment to buy actually turn into an order. This is the place where you don't want to worry too much about being spot on - all you are looking for is an an approximation.
   
4. Introduce a system to manage this whole process. There a many CRM systems that can do this for you but working on a tight budget one of the best is Sage ACT!


5. Keep the results updated. A sales pipeline will only be useful if you keep it up-to-date and regularly reviewed.


6. Refine the process. You will need to give the process some time to settle down but after a while you will want to refine the process.

You should end up with a table like this:

If you follow these steps you will have a measurable way of tracking opportunity progress and one measure for assessing the competency of your sales people.

Competency frameworks

I have been doing some work lately to brush up my knowledge about competency frameworks - an area where I am sadly lacking!

This is a subject where clear definitions are essential but may be lacking. We work with hundreds of companies however, very few actually use a competency framework and, when asked, they come up with different definitions. In my reading I came across the following, clear, concise and helpful distinction:

• Knowledge - Information that has to be learned to carry out a job
• Skill - The application of that knowledge in a practical way to achieve a result
• Competency - The application of that skill so as it results in work done to a particular standard

I realise that this might be very basic for the seasoned HR professional but when it comes to jargon it's often best to over simplify. One thing that is totally clear to me, is that if an organisation wants to implement a competency framework they need expert advice.

Training budgets

Is it me or has there been an uplift in the tone of economic reporting over the last couple of weeks? The media can still come up with doom and gloom - giving a negative slant to a neutral / positive story, but the mood seems to be turning.

This seems to be reflected in the number of requests for training that we are receiving. Clients tell us that budgets are still tight but well justified training is getting funded. This is good news for our users and we are trying to help in whatever way we can. We tailor our training around clients exact requirements and always try to leave them with an immediate ROI. If we can save them even the smallest amount of time it can pay for the training.

The latest success we have had is getting training covered under the Train to Gain scheme. Not all training is covered but it's worth a try. This gets £500 paid for and a futher £500 matched. If you want more information feel free to drop me an email.

Managing HR in a small business

Most small businesses can not justify having a dedicated HR person. The admin heavy and / or complex HR processes can be a real drain on management time. Companies often hire in a part time person to help with HR but this can cause problems:

• Hire a highly skilled HR person and you run the risk of this expensive resource getting bogged down in HR admin (booking holidays, recording sickness etc..) or
• Take on extra admin resource to help with HR processes and you run the risk of non core processes running out of control.

If you are a manager in an SME the chances are you didn't sign up to do HR - nothing wrong with HR, its just not your thing. You should be focusing on selling, operations or delivery. The solution can be found in automating the repetitive HR tasks and outsourcing the complex HR activities.

Tasks that can be automated include:

• Holiday booking & authorisation
• Sickness reporting (including back to work interviews)
• Employee address and core data updating
• Frequent tasks - appraisal reminders, new starters, leavers etc
• Report production

Having a central system for HR data relieves management of a non core task, saves time, increases accuracy and satisfies data protection legislation. It is also an essential tool to maximise the efficiency of outsourced HR services.

Lastly, it provides management with reports and analysis on staff activity. Managers can easily combine data on various topics into one report on which to base decisions. Having access to pre-formatted reports on such topics as employee absence by reason, workers compensation statistics, and salary by department makes understanding the strategic "big picture" much easier.

One word of caution - not all HR systems have the ability to automate tasks. Some only act as an electronic filing cabinet. To get the maximum benefit from this approach you need a system that has employee self service functionality and has been designed for SMEs. Take a look at breatheHR.

Expensive software sitting on the shelf?

All businesses are looking for that extra edge - the things that make a difference; whether it's increasing revenue, saving costs or just plain making life easier. One area that every company needs to look at is the software that is being used or in some cases not being used!

Research shows that businesses rarely use more that 20% of the functionality of any software system. This is great news as it leaves a whopping 80% still to benefit from. In addition to this there are many systems not being used at all - still in the box, never installed or never really understood and forgotten about.

A great example of this is Sage ACT! - with over 2.8m users there must be a whole host of companies out there not using it to its full potential. Every organisation needs to manage sales, improve customer service or just free up some admin time and a bit of training could make all the difference.

If you work for an organisation that has been in business for a while I bet there is some benefit to be gained from looking around your network or in the cupboard where your software boxes are kept. It may take a little research or some training but the potential is definitely there. There may even be government funding to foot the bill!

On the move

I had a conversation earlier this week with a contact who was looking to get more connected. He is very successful salesman, working for a company that is bucking the downturn, but he knows he needs to stay better in touch with the office.

Whilst the web has been with us for many years, and applications have used the Internet for a good while there aren't many smaller business taking advantage of the benefits. CRM applications are particularly suited to using the web but sales people are often reluctant users. Sometimes it's a fear of the technology but most frequently it's a fear of being checked up on.

We are implementing Sage ACT! for his company that will allow them to co-ordinate all activities, keep travelling employees in touch with client activity and give the sales people access to relevant information. All for under £6k! Since their average deal size is around £20k and the average salary is £25k it wont take much to give an early ROI:

• Increase close rate


• Shorter lead to close time


• Reduction in office admin time to support external staff


• Tighter management of new leads


• More accurate forecasting ....

Making the most of every sales opportunity

One of the most common demands we get from new clients is that their CRM system must give them a better handle on new business opportunities.

Top sales people take a long-term view of the sales cycle. They don't get too hung up on any one stage - hitting the phones is just as important as closing deals or sending out proposals. Key to improving the efficiency of many sales teams is to model what the most effective sales people do, then replicate that process across the team. This typically involves identifying the stages that the sales people go through and what needs to be accomplished in each stage. Good sales teams invest in activities that generate sales opportunities and follow each opportunity from start to finish.

Studies of sales managers constantly report that their sales teams don't make enough sales calls to effectively discover and develop sales opportunities. The same studies show that many sales people struggle to manage opportunities as they move through the pipeline.

There are essentially three things to work on when you are managing a sales team:

• Balance the focus between long term and short term results.
• Apply discipline and actively manage the pipeline
• Clarify expectations - set targets and carry out regular reviews.

Easy to say but near impossible to achieve without a CRM system such as Sage ACT! or Sage CRM.

Know who's knocking at your door

Working with a website can be really frustrating. You can see hundreds, if not thousands of hits but you haven't got a clue who your visitors are. Analytics can only go so far in justifying your spend especially if you use PPC advertising. However, you must constantly justify your spend as the web can be a big black hole for marketing budgets.

I have been working with a new system called Trovus Revelations (http://www.trovus.co.uk/) and the results look really promising. In their own words "Trovus Revelations™ shows you exactly who's visiting your site and why. Your clients and prospects are showing you why they are interested in your company. Start a rewarding dialogue with them today."

In the short time that we have been using the system we have certainly identified a small number of visitors that have turned into clients but more importantly are seeing some interesting trends.

Take a look at the system and I would encourage you to start a dialogue with the guys at Trovus - and please tell them that I told you to.

Green shoots

At the risk of being shot down (like business minister Shriti Vadera Telegraph online) is anyone else starting to see the green shoots of recovery?

I hear many more people talking about when (not 'if'') the upturn comes and now seems to be a good time to think about investing in our businesses. I'm not just talking about money, although that helps - a positive attitude is the first step. The much quoted comment by Sam Walton of Walmart applies. When asked what he thought about a past recession he commented "I thought about it and decided not to participate".

Given the magic of technology and the internet it is possible to achieve an increase in marketing output whilst saving money. Combine your CRM system with some old fashioned marketing savvy to generate well targeted and cost effective campaigns. If you don' t have a CRM system, vendors have some great offers at the moment! Looking at previous recessions it seems clear that organisations who invested in marketing towards the end of a recession benefited the most as recovery started.

If you want an interesting take on how to operate in a recessions I would recommend going along to one of the Shirlaws 'Thrive not survive' workshops.

Snow stop play

Why does it always happen - a little bit of snow and the whole south of England grinds to a stop! OK so it wasn't a little bit of snow this time but you know what I mean.

The thing is, work doesn't need to stop (or even slow down) it can go on wherever your employees are - office, home, hotel or on the road. Businesses need to expect more from their systems. Many CRM systems can be accessed securely via the Internet so sales, marketing and customer service people are covered. Take today as an example - I have support being covered from Brighton, client service from Woking and sales from Crawley and Billingshurst. In addition some of our team made it into the office and two are at an exhibition in New York! However this isn't unusual, as we expect this functionality from our system - SageCRM.

If you are reading this and thinking that its all well and good for sales people, but HR systems don't work that way - think again. Our HR systems, breatheHR and HR.net, allow HR people, managers and employees to get access to the system from anywhere. Many of the HR people we help regularly work from home or travel between multiple offices.

How to beat the recession

Sorry, but I guess you know as well as I do that there isn't a way to beat the recession. So why am I receiving so many emails promising recession beating tips? Could it be a marketing ploy?

First, let me apologise just in case we have sent you such an email - one may have slipped through our marketing filter. Gordon Brown has told us from the World Economic Forum in Davos that this is unlike any other recession - the first of the global age. However, I humbly suggest that the way through this one for a small to medium business is the same as the others - hard work, focus on the detail and an injection of confidence.

For a while we need to forget that we are British and talk the economy back into health. I talk to a lot of business people and the over whelming view is that it isn't as bad as it is! In other words we need to stop digging the hole and start building a ladder to get out.

So, in that spirit I want to share with you the view of two successful business people who I greatly respect. One says that the climb back will start April'ish and the other June / July. I want to believe them and can see some early indicators that point in that direction - new leads are up, existing clients are ordering and its getting lighter in the mornings.

Why CRM is even more important in a recession

CRM becomes an even more essential tool in a recession as winning new business gets harder and costs are squeezed. Five reasons why you need an effective CRM system:

Existing customers 1.
You need to be in a position to offer the right product, at the right price and at the right time to existing customers. A well managed CRM system will help with this.
CRM systems are all about collecting and organising customer information. They put you in a good position to win new business.

Existing customers 2.
All customers are equal except some are more equal than others! Use the CRM system to identify which customers are worth the most (profit not turnover) and concentrate sales effort on them.

Categorise your customers by value. Focus on category 1 customers then work on turning category 2s into 1s.

Existing customers 3
How many times have you heard that it costs 7 – 10 times as much to gain a client than it does to keep one? CRM is an essential too to help keep customers happy – it can’t do it on its own though, it takes your input.

How to generate customer satisfaction? Keep your promises and meet their needs. Use your CRM system to remember your promises and record what your customers want.

Make the most of every lead.
Generating new clients still has to happen and a new lead is like gold dust. Manage them more efficiently using CRM and concentrate on the real prospects.

Smaller more agile teams.
Recessions often lead to redundancies but making the role redundant doesn’t make the tasks go away. Use CRM to improve efficiencies, share work and information. Understand and replicate the way that your best people work.

CRM doesnt have to cost a fortune either - we are just implementing a 12 user CRM system that will cost about £250 per month! Even the smallest efficiency will pay for that!

How well do we know our clients?

When was the last time you took a long hard look at your client list? I have just done this and was shocked. I like to think that I have a good relationship with our clients but it seems not. I took a list of all present and past clients then graded them as follows:

1 = Close relationship with regular contact ("Hi, its Jonathan from Centurion. how are you?")
2 = good relationship with some contact ("Hi, It's Jonathan Richards from Centurion")
3 = we support their software but with infrequent contact (Hi, it's Jonathan Richards from Centurion, we look after your xxx system")
4 = they have purchased from us but are unsupported or no longer using software

Needless to say I found too many scored 3 or 4. I am planning to repeat the exercise with other colleagues so that I get a company wide score. This will then be recorded in our CRM system to support an upgrade drive - 4 to 3 to 2 to 1.

Having the CRM system well configured (and used) made it a doddle to get a client list that included what they purchased, when and where they are. I am aware of all too many companies where this is a real head ache. It's often the simple things that make a CRM system worth every penny.

Is the customer always right?

I was travelling by train to a client's office yesterday and got caught in the problems at Euston station - if you missed it, all trains out of Euston were cancelled due to a powerline coming down. I was redirected via Marlebone station and the journey took 6 hours instead of 3!

The line was open again by the time I set off home but the trains still hadn't got back to normal. On the platform I overheard a woman shouting at an off duty Virgin Trains rep about how ridiculous this was and blaming them for all the problems. This individual customer was not right! Firstly it wasn't a problem caused by Virgin, it was the rail infrastructure company, and secondly this rep was doing a fantastic job of trying to help the woman - they were both trying to get home to the same place.

So, in the world of customer service the customer is not always right BUT it is our job to make them feel like they are.