Four Signs You Really Don’t Know Your Customers

And what you can do about it

Published: Tuesday, September 15, 2015 - 11:58

Now let’s be real here and take a big-picture look at your company’s knowledge about its customers. For instance, when my firm reviews how a client uses its customer relationship management (CRM) system, invariably we find knowledge gaps in the operational processes it follows.

These gaps make it much harder and time-consuming for the marketing person, sales team, and customer service representatives to do their jobs effectively. Yes, we all get busy, but a disciplined effort should be made to keep your customer information clean, accurate, and fine-tuned. Yes, operational processes can be optimized. Yes, newer CRM systems provide more efficient ways to add and update information on the fly using mobile phones and tablets.

Does the information in your CRM system give you a clear picture of who your customers really are and how they behave?

Here are four signs that an effective CRM system is not in place:
• You can’t find emails because too few of your customers’ contacts are clearly identified. This is a minimum requirement. You should have at least full contacting information about them so the sales team and marketing are effective. Many times you’ll need to have two to four email addresses for each contact.
• You don’t have a clue how a company became a customer. Where did the original lead come from? Was it a from specific marketing campaign, a trade show attendee, or a referral from another key person?
• You don’t know the effort it took to convert a lead into a true customer. How many days ensued between a qualified lead becoming a new buyer?
• You don’t know the dollar value of each customer for the last several years of sales. Have they been trending up, flat, or down? There should be a tab under each customer account listing the invoiced transactions, products and services, that have been previously purchased.

How long has it been since a customer made a new purchase? Is any given customer or segment of customers taking longer for a renewed purchase? Your CRM should be providing these trends if your business is based on reoccurring revenue from your customer base.

Take a time-perspective approach:
• How many days does it take to convert a qualified lead into a new customer?
• How many days go by before your best customers return to make a purchase?
• How many days has it been since someone had a meaningful conversation with your best customers?
• How many days are you “touching” your prospects and customers with meaningful educational content and not just me-first content?
• How long does it take between recognizing a service or support issue till it’s resolved?

You are ranking your customers, right? Do all of the A customers have more than two contacts in your CRM system, and do you have more than one person in your company in regular contact with them?

Referrals are a great source of new customers without the huge costs of new-customer acquisition. Identify your best referral sources in your CRM so you can associate a new customer to a referral customer or strategic alliance partner.
• Which customers would actually recommend your business to a trusted business friend?
• Who are useful reference customers?

Take a percentage-perspective approach:
• What percent of raw leads convert to qualified leads?
• What percent of qualified leads have valid sales opportunities but haven’t purchased yet?
• What percent of qualified leads do become customers? If this trend getting better or worse?
• What percent of sales opportunities are closed as “won?”
• What percent of sales opportunities are closed as “lost,” and to what main competitors?
• What percent of your customers fall in the A group, the B group, and the C group?
• What percent of current customers leave and aren’t retained?
• Which customers have service or support issues? What trends do your CRM system lead you to change or refine? Are certain issues reoccurring or certain customers having continuing issues?

Look at your contact list and determine the roles and responsibilities of your key contacts.
• Do you have the right people in the right positions, and are they well known?
• Who is an influencer or a decision maker?

Get more personal. Create a key “trivia note” field for each contact record that’s visible on the main contact screen.
• Ideally, your contact record will also show contacts’ interests like dining, movies, and sports.
• Identify contacts’ spouses and children.

What else can you identify about a person that should be in your CRM system?

How do your customers want to be contacted?
• Is their preference email, phone, or face to face? Your marketing person would love to know this.
• Which customers receive your monthly company newsletter? Which ones are opening the emails, who is looking at specific content, and who has unsubscribed?

Better yet, have your emarketing system link directly and dynamically to your CRM system. Alert your sales reps of those "hot" and “warm” email recipients.

Which of these are most important to your business?

First published on the Business Success with CRM blog.

About The Author

Dick Wooden

Dick Wooden, founder of Success with CRM Consulting Inc., is a consultant and an entrepreneur business coach who implements tailor-made customer relationship management (CRM) systems for more productive business development in small to medium-sized businesses. Wooden has more than 35 years experience working with entrepreneurs, business management, sales, marketing, and customer service professionals.