Going One-on-One with Customers: How to Practice CRM on a Small Business Budget

Do you hear big businesses preaching the power of Customer Relationship Man-agement and wonder what place, if any, CRM should have in your small business?

Most companies--large or small--can benefit from CRM. Small businesses, however, need to determine the right extent, rather than getting caught up in the marketing mob mentality and pouring thousands of dollars into CRM activities that may be more than the company needs.

Customer-Centric

CRM is building and retaining customer relationships at every "touch point," or point of contact. It means focusing efforts on your current customers. The benefit? It creates valuable learning about your customers' likes, dislikes and needs. That allows you to tailor personalized efforts targeting the customer and prospective customer segments who are more likely to generate meaningful profits.

Strategy Before Activities

Before you spend time and money on CRM activities, first align your resources against your strategic priorities. If trial and acquisition are your company's primary objectives, the resources you align toward current customer-focused activities may not support truly integrated CRM efforts.

If your company's strategic priorities are current customer-focused activities, you simply need to pay attention to the concept: Focus on those customers who are more likely to buy and spend less time servicing unprofitable customers.

That kind of focus doesn't require a large investment, such as an enterprise-wide CRM software system. It's a matter of using every point of contact to gain insight into your customers and then allocating capital and attention to the relationships and the marketing activities that offer the greatest long-term payoff.

That's CRM in action. All you need to get started is a good understanding of each customer's value and growth potential.

Tapping Motivations

As an example, let's say your small business has 100 customers. As you begin focusing on CRM, you see that Customer Segment A is spending five times more than Customer Segment B. The idea is to tap into the reasons why Customer Segment A spends more and apply those key learnings to Customer Segment B. To find the answers, go to your touch points. These could include your call center, salesperson, Web site, billing department, etc. Each of these contact points provides information opportunities about each customer segment.

After you've reviewed the data, ask yourself: Will changing some of the ways my company interacts with Customer Segment B sell more product? Perhaps it will become apparent, for example, that your salespeople need to communicate differently with Customer Segment B. Or, maybe Customer Segment B would prefer to purchase from your Web site instead of from a salesperson. Implementing those changes could be just what you need to get Customer Segment B to open their wallets more often.

Whatever strategy you choose, your CRM program--no matter how small--must have three components:

• A clean, accurate, maintained customer database;
• One seamless "face" to the customer at all touch points;
• A way to measure the ROI, even if it's qualitative.

And, of course, you have to weigh the cost. If your goal is to maximize revenue opportunities associated with increasing customer loyalty by $50,000 but it costs $100,000 to implement your program, is it worth it? Maybe, if you're willing to wait two years to recoup your initial investment, or if those CRM steps build relationships that offer long-term payback.

The goal of CRM, at any level, is to be so tuned in to your customers that they wouldn't consider going anywhere else. So, take time to examine your practices to determine how a CRM strategy might benefit your business.

Jeff Yowell is the is founder and CEO of DATACORE Marketing. He can be reached at: 816.471.0605 or by e-mail at jyowell@datacoremarketing.com