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Blog posts tagged crm
PRM vs CRM: Which strategy provides the better solution for long-term profit?
November 22, 2010
Customer Relationship Management (CRM) has become increasingly popular in recent years and many businesses funnel large proportions of their expenditure into this discipline. CRM campaigns that specifically focus on customer interaction and consumer confidence have become an integral area of operation for many businesses.
But there is another discipline that many businesses overlook and it is one that can provide improved long-term profits if implemented correctly – Product Relationship Management (PRM).
PRM’s primary focus is the product and how it will provide continuous long-term profit. Yes, a business needs to persuade consumers to make that initial purchase, but once it makes a sale a business should not be chasing customers for further business — it should make the customer do the chasing. This is where PRM has an advantage over CRM.
CRM problems: Maintaining customer contact
CRM promotes the benefit of a healthy customer base and the importance of maintaining contact with these customers. Whether this is by email, post, or phone, the emphasis is on continuous promotion. After all, if a customer bought the last product they may well show interest in other products a business has to offer.
The problem with this system is the unpredictability of human behaviour. People move house, change their email address, and get a different phone number. So as efficient as a business’s CRM may be, there is no factoring for personal detail changes by customers.
So are businesses blowing their budgets hiring CRM experts, when they should be channeling their efforts towards supplying products that offer the potential of a continuous long-term revenue stream? CRM may not be the definitive answer to long-term financial profit, but PRM may well be.
PRM: Increasing a product’s afterlife
One of the biggest advantages with adopting a PRM strategy is that is allows a product to encourage its own future sales. This could be from something as simple as new must-have product accessories. However, the most profitable and successful PRM techniques are based around products that:
- Include perishable components that will require regular replacement.
- Have components that are manufacturer-specific.
- Offer regular upgrades and fixes to keep the product in top condition.
- Have warranties requiring the use of original manufacturer parts, or the use of approved technicians for any repair work.
If a business implements PRM into its marketing strategy, it should be looking to sell products that fit one or more of the examples above and ensure that it stocks and promotes any related products that consumers will require in the future.
For example, inkjet printers need ink. Many printer models will only accept replacement ink cartridges from their respective manufacturers and this means owners of a particular printer are forced to buy specific ink cartridges. The original printer sale may not have yielded a high profit margin but the continued sale of replacement ink encourages numerous profitable future transactions.
The same applies to replacement parts for products. Many products will use unique parts that can only be supplied via a manufacturer. These will be sold at premium cost. Customers are forced to buy these products when required, especially if they wish to ensure a warranty is not invalidated.
CRM drives businesses to chase customers and keep them informed through interaction and correspondence. PRM can force customers to return to a business because they need it. This is the main difference between PRM and CRM.
Can PRM and CRM co-Exist?
The simple answer is yes. A smart business will integrate the two principles into one plan, increasing efficiency and long-term profit generation.
CRM can be used to attract new customers and keep them satisfied. PRM will supplement this strategy by ensuring those customers keep returning for future purchases and transactions. Every time a customer returns, his or her contact details can be verified and updated.
Businesses may lose contact with customers through CRM alone, but PRM can help drag them back. Lost customers become contactable once again and a new CRM process can begin. It is almost a perpetual cycle: CRM encourages a purchase, PRM encourages continued transactions, customer contact details can be confirmed, and CRM continues unhindered by a loss of contact.
Daniel Offer is a partner in the Facebook messaging application Chit Chat for Facebook
Social Contact Management - keep in touch everywhere
August 02, 2010
About a month ago, I attended a presentation and workshop on marketing where the presenter, Helen Dowling of Exceptional Thinking, said that the most important part of marketing is to have a way to follow up, and then to follow up. We all come back from seminars and networking events with pockets full of business cards; how many of us actually make use of them?
With the development of social media, the channels through which you can follow up have multiplied, and it is no longer necessary to email everyone you met – some people may warrant an @mention on Twitter, others a connection request on LinkedIn, while others will require an email, and lastly some will need a phone call.
This diversity of follow up opportunities means that you need to have a means to decide who gets what. Hopefully you will have an idea of how likely it is that you will do business with each of the people you met, and so you can use this to decide how you will follow up with them: the most likely you can phone; the least likely you can say ‘Hi’ to on Twitter.
Whatever means you use to do your initial follow-up, you need to have a record of what was said, where, through what channel, and by and to whom. As your business grows it will very soon become difficult to keep track using pen and paper, and so a Contact Management System on a computer and/or smart phone becomes essential.
Choosing a Contact Management System can be a difficult task, especially if you want it to work with Social Media. And Contact Management Systems can be expensive – though a lot of people are using the Outlook Contact Manager add-on successfully, which is part of the Microsoft Office Small business package. Other options include Gist, ContactZilla and Glasscubes, to name a few.
I am always on the lookout for solutions, and am in a position to help and advise you on the best solution for contact management with social media, should you need it.
- Nigel Legg is an independent social media monitoring and marketing consultant based in Bristol, UK.
Four simple steps to a better customer relationship strategy
September 30, 2009
Customer relationship management (CRM) is crucial to any organisation – whether you are the biggest and best brand in the world or the smallest start up. You always need to work on your relationships. They will help you sell more, be more reactive to criticism, improve your product/service and ultimately could help you improve your profitability.
Alternatively, failing to work on your CRM strategy could lead your company down a dark path where you have no idea what your customers think, no idea if they are bad mouthing you, miss meetings, fail to uncover sales opportunities – and perhaps the biggest of all – fail to spot disgruntled customers ready to leave.
There are many facets to developing your CRM strategy, but why not start with my four basic principles:
1. The sooner you start building relationships with a customer, the better.
It’s never too early to start. The very first time you have the chance to connect do it with a personal approach. Empathise with them, listen to what they have to say and try to understand what they are looking for (or what problem they have). By listening and showing that you listen you will be able to meet their needs (or not in some cases) and gain a little bit of trust and respect.
2. It's inevitable to lose some prospects, but it's important to try to solicit feedback in a personal conversation.
If you find that your prospect is not suited to your product and it won’t solve their needs, don’t try to crow bar a sale by fitting a square peg in a round hole. You should, by now, have an understanding of how it isn’t a good match, and if you know your stuff, why not suggest an alternative which you believe is useful? It shows you are knowledgeable in the subject and genuinely want to help.
3. Don't be afraid to receive criticism or negative feedback.
When a prospect or customer says ‘no’ or wants to criticise your product or service, let them. There is no shame in not being perfect. By listening to what they don’t like you can look at what you are providing and see if it makes sense to modify or change the offering slightly. You can bet your bottom dollar this person won’t be alone in their thoughts. At Glasscubes we try to take every bit of feedback and build it into our product roadmap (and we generally prioritise these developments over our own).
4. Don't try to make a goodbye message into another attempt to sell.
I’m sure we’ve all done it, but I believe it’s crucial not to. Don’t try and push more marketing or sales messages to someone who is already leaving. Certainly be polite and courteous, but sales messages are so obvious. You’re likely to leave a better taste in the mouth by once again understanding their needs and accepting their decision to leave. This may help you keep the relationship going so that if circumstances change, a reunion may not be out of the question.
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