CRM and the virtuous profit and costs circle
For all the complexity associated with running a business, there are a few simple rules that never change. One of the simplest of all is this: if a business wants to flourish and keep its shareholders happy, it must push profitability up and costs down.
The rule might be simple, but every business owner knows how hard it is to stay on top of it amid the controlled chaos of the average working day. With so much to think about, it’s too easy to lose focus on the factors that influence these key measures. But CRM can help, by offering an uncluttered view of how well your business is working.
Clarity on costs
CRM offers clarity on the cost of running your business – helping you figure out how your teams can do more for less. It helps you understand what sort of return you’re getting on your investment in sales and marketing and the real cost of customer acquisition, informing your decisions about what to spend money on and how to optimise resources.
Are you as clear as you need to be about your customer lifetime value? Do you know how to improve it? CRM helps you define more clearly your ideal, most profitable customers and how best to manage them.
The other crucial metric CRM keeps you focused on is service cost. You need to know exactly how much it costs to service your customer throughout their life cycle and CRM helps by tracking and measuring engagement, touch points and customer enquiries, calculating exactly how much it’s all costing and helping to guide your strategy decisions.
Think too about the internal workings of your company. How much time and money are you wasting through poor processes, inefficiency, or low staff productivity? With CRM, you can substantially improve and streamline processes, embed best practices and reduce inefficiencies throughout your business.
If you run a B2B services business, the cost of acquiring and managing clients is a significant overhead. You need to understand those metrics and CRM is an invaluable tool to help you keep on top of this, by tracking lead numbers and understanding your lead-to-conversion performance.
Working smarter, not harder
Reducing business costs doesn't have to take a lot of time or even a lot of effort. In many cases, it's about making smarter choices when deciding where to invest. CRM informs those choices.
By automating and simplifying processes, CRM frees up your staff to spend time focusing on what will deliver the most value. You’ll be able to ditch redundant legacy systems – and the costs associated with them. You’ll be able to predict demand more accurately thanks to the detailed view it gives you of individual customers and their purchasing history. That means you only produce what you know there’s demand for, thus lowering your production costs. CRM will also cut admin costs – including stationery, travel and reporting.
As CRM improves your customer experience, your customer satisfaction will also climb. Then your customers themselves can turn into a marketing asset as volumes of referrals and word-of-mouth advocacy grow.
Download our Whitepaper, CRM to Grow your Business: A Guide for Management, to find out how you can achieve tighter cost control, more informed decision-making, slicker operations, better service and, ultimately, happier customers.