Basics of CRM

Basics of Customer Relationship Management

Andrew Kamphuis

The Professional Me

President of Vin65andrew@vin65.com@andrewkamphuisCell: 604-613-5343

Andrew Kamphuis

The Real Me

Basics of Customer Relationship Management

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Customer Experience

Does the customer experience matter?

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

Will a better customer experience lead to more profitability?

Things That Annoy Customers

Top 10

Promised return phone calls not made or information not sent.

Top 10 Things That Annoy Customers

1

Not being informed of a delay.

Top 10 Things That Annoy Customers

2

One department in the company having no idea what another department said.

Top 10 Things That Annoy Customers

3

No one bothers to call to make sure the wine arrived – probably no call at all until they want to sell you something more.

Top 10 Things That Annoy Customers

4

Not being valued for your relationship.

Top 10 Things That Annoy Customers

5

No one knowing what they last sold you or when.

Top 10 Things That Annoy Customers

6

Spam!

Top 10 Things That Annoy Customers

7

Staff that ask basic questions they should know the answer to.

Top 10 Things That Annoy Customers

8

IVRs – Interactive Voice Response Systems.

Top 10 Things That Annoy Customers

9

Customer support or phone agents without access to your profile.

Top 10 Things That Annoy Customers

10

CRM is Philosophy Not Technology

What is CRM?

It’s Not Pixy DustYou can’t sprinkle some and assume

sales will get better.

What is CRM?

It’s Not Software

What is CRM?

DefinitionThe 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

What is CRM?

ObjectivesBoost sales, retain customers and save

money.Enhance business productivity and optimize

sales and marketing.

Why CRM?

Goal of CRMBring the company closer to

the customer.Increase customer loyalty =

more profit.

Why CRM?

Philosophy -> Process -> Technology

How to do CRM Right

PhilosophyIt doesn’t start with technology – it starts with

philosophy.It’s a ‘customer first’ attitude.

Philosophy -> Process -> Technology

ProcessThe process will make a difference, which is

noticed by your customers – and your bottom line.

Philosophy -> Process -> Technology

TechnologyDon’t select the technology until you’ve set a

philosophy and created a process.

Philosophy -> Process -> Technology

Personal Example: Vin65In Dec 2010 our customer base topped 500 clients.We wanted a CRM solution for our customers.

Philosophy -> Process -> Technology

At Vin65Philosophy

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 -> Technology

At Vin65Process

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 -> Technology

Vin65Technology

Initially used SalesForce for sales.Home-grown support ticket system.Built-in reporting and analytics to measure how team

is doing.

Philosophy -> Process -> Technology

Example: Vin65 Personalization Efforts

Philosophy -> Process -> Technology

Example: Vin65 Personalization Efforts

Philosophy -> Process -> Technology

Example: Vin65 Personalization Efforts

Philosophy -> Process -> Technology

Example: Vin65 Personalization Efforts

Philosophy -> Process -> Technology

Examples: Results of CRM Efforts

Philosophy -> Process -> Technology

Examples: Results of CRM Efforts

Philosophy -> Process -> Technology

Building a Strategic Base

How to Build a CRM Plan

Develop a PhilosophyWhat’s important?What’s your customer relationship story?

CRM Plan

Determine ProcessWho’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 Plan

Commitment at all LevelsExecutive 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 Plan

Measure ResultsEach process should have a measurable result.Monitor results over time.

CRM Plan

CRM Plan

CRM Plan

MarketingCustomer knowledge

Usage habitsDemographics

AnalyticalMarket size and opportunityCustomer value equation, CLTV, AOV

Marketing PerspectiveHow 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 Plan

Marketing PerspectiveIdentify the ideal customer.

Spending habitsVisit frequenciesIncentives redeemed

CRM Plan

CRM Plan

SalesCRM puts the right offer in front of

the right customer.

Sales PerspectiveCustomers with a good experience tell 3

others of their experience.5% increase in customer retention means

25%-95% increase in profitability.

CRM Plan

CRM Plan

Service & SupportResponse management

Fielding inquiriesResponding to complaints

Service Perspective95% 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 Plan

CRM Plan

FeedbackListening to social conversationsSurveyingActive conversations

Execution

10 Ideas For Your Winery

Forget Philosophy – Just Want to Execute?

Learn Your Customers Dog’s NameReally know your customer – their

birthday, anniversary date, etc.Find something special about your

customer.Use that “special” thing when you

communicate with them.

10 Ideas For Your Winery

1

Send a Birthday CardNot a generic card – a personal card (nobody wants

your generic card).Remember something special about your customer.

10 Ideas For Your Winery

2

Segment Your Next Email BlastClub vs. non-club.First time vs. repeat buyer.Local vs. out-of-town.Make it relevant.

10 Ideas For Your Winery

3

Why Segment Your List?Your response rate increases.You build deeper connections.Untargeted email is spam.

10 Ideas For Your Winery

Segmented ExamplesWineTasting.com – 26,000 inactive buyers

50% received a regular email 50% received targeted “we miss you” email

Results6.75X greater click-through rate9X more orders28X more $$½ as many unsubscribers

10 Ideas For Your Winery

Build a Retention PlanRetention is the new acquisition.Know your retention rate.Understand why customers leave.

10 Ideas For Your Winery

4

Get the Second OrderAfter the customer leaves the tasting room, will

they ever get contacted again?

10 Ideas For Your Winery

5

Listen and Respond SociallySocial monitoring

VintankHyperAlerts

10 Ideas For Your Winery

6

Enable Feedback on Your Website

10 Ideas For Your Winery

7

One Question SurveyHow likely is it that you would recommend our

winery to a friend or colleague?Know your Net Promoter Score.

10 Ideas For Your Winery

8

Build a SpreadsheetRecalculate KPIs once a month.

Net promoter scoreRetention rateLifetime value

10 Ideas For Your Winery

9

Hire a ConsultantValue 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 Ideas For Your Winery

10

Keys to Success

Keep it SimpleStart small – work your way up.Quick wins.

Keys to Success

Actionable MeasurementsEach 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 Success

Stakeholder OwnershipWithout buy-in the plan will fail.Need active engagement.

Keys to Success

Know the ValueThe numbers you should know:

Retention rateNet promoter scoreLifetime value of a customer

Nice to know:Cost to acquire a customerMoney lost on each one-time buyer

Keys to Success

Retention RateThe 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 Value

Net Promoter ScoreAsk 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 Value

Customer Lifetime ValueBest 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 Value

Cost to Acquire a CustomerAdd 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 Value

Money Lost on Each One-Time BuyerSubtract 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.

Know the Value

Train EmployeesSuccessful CRM starts with well trained employees.Training ensures consistency.

Keys to Success

Questions?