With so much focus on the role of technology in data analysis and warehousing, it’s sometimes easy to forget that customer knowledge isn’t a software package or a database — it’s an approach to doing business.
This approach can be enabled through huge, complex client data warehouses and advanced smart data mining applications to uncover hidden trends and important insights into buyer behavior. But it doesn’t have to be.
This column outlines three basic principles small and medium-sized business can enact to make use of client intelligence to improve customer retention and satisfaction.
Principle #1: Your best source of new business comes from people you know or already do business with.
You know the drill. It seems that the promotions and big bonuses always go to the partner or principal who leaps on a plane to Europe or makes a big sales itch in the Far East, then lands the Big New Client based in some foreign land.
But while the majority of investments in time, money, and resources are often directed toward winning the big new client, the fact is that most organizations would do far better if they shifted precious business development and marketing budgets toward clients they know and meet with everyday.
Your best prospects are right here, in your own back yard, where you can meet and talk to them face-to-face. Instead of relying on complex and inexact technologies to discern buying patterns and predict demand, you can simply ask what’s bugging them and offer suggestions on how you can help.
But what about new clients? Yes, you need them too. The trick is in developing the right mix of efforts, based on their relative probability of success. Cold calling is a high volume, low probability game — kind of like buying a lottery ticket. Do it as a fundamental part of your marketing mix, not as your primary business development strategy.
Principle #2: Your best sources of new business come from your largest or most profitable customers and prospects.
You don’t need a marketing guru or a complex data mining algorithm to figure out who’s most likely to buy from you next. You already know; it’s the same people who usually buy from you.
Try this exercise: develop a list of your customers and determine your largest and most profitable segment. In some businesses, this group may represent a minority of your current customers — say only 20 percent. Add to this list the top 20 percent of your list of prospects. You now have a marketing database that is better than the most sophisticated, expensive, and elaborate contact management or sales force automation system money can buy.
Treat this list as if it were the Crown Jewels. Because it us. Focus on these accounts, and you are bound to succeed.
Principal #3: Identify what works and leverage the heck out it.
As important as customer and marketing intelligence is, internal intelligence, or for lack of a better term “corporate self-knowledge,” may be just as important — and in some cases even more important.
Most organizations I’ve worked with were ill-equipped to take a hard look at themselves and realistically assess their market opportunities and understand their core competitive strengths.
My advice: take a hard look at what works and what doesn’t. Look at what your biggest and best clients have in common. Then, take a good, long look at what factors contributed to closing those sales.
Trim or radically re-think the parts that don’t work, and accelerate development of what does work. And, in proliferating what does work, don’t re-invent wheels. Develop templates and repeatable processes to leverage your core strengths and control the quality of implementation.
If you focus on these three principles, you’ll probably be way ahead of your competition.
What are your thoughts and experiences with customer intelligence systems? Please send them along to me at [email protected]
With more than 20 years of management experience in customer management, strategy, and new business development, Arthur O’Connor is national columnist for eCRMGuide.com, an internet.com site. This year he also serves as the chairperson of the Institute for International Research’s Customer Relationship Management Conference.