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Using existing data to understand your customers

Using existing data to understand your customers - Address fileYour database or customer relationship management system (CRM) may hold valuable information about your customers that will help you to understand their needs. However, you can gather more information to improve your service further. Mac Mackay tells us how

Some fundamental questions to ask about customer records might be:

  • Who is a customer?
  • Who was a customer?
  • Who might be a customer
  • What else might a customer need?

It is worth recognising when trying to understand customers, that there is a process involved when customers BUY what it is your organisation provides. At the beginning, potential customers may not know anything about your organisation but in the end they take the action to buy your products are services. Understanding this process can help make sure that you succeed in 'selling' to a customer. The basic buying process is as follows:

  • Unaware - I do not know what you do...
  • Aware - I know what you do but so what?
  • Interest - Yes, that is OK but I am not sure you're the one...
  • Conviction - You sound plausible but do I really need it?
  • Desire - YES! I want it but how do I get it?
  • Action - I know how to get it easily, thanks!

Good CRM systems can track all interactions between potential customers and those actually buying. By so doing, it is possible to use particular marketing communications to understand where particular potential customers are in the process and take them from one stage to the next until they are actually buying from you.

Do remember that in many situations, it is not just one person that makes the decision to buy your products or services. In many markets, more than one person is involved in the buying decision. Children influence their parents, for example, and in business-to-business markets, the bigger the value of the purchase, the more people are involved in the decision. We call this the decision-making unit or DMU.

There are six possible roles in a DMU and are listed below in no particular order. It is worth noting that some individuals in a DMU may have more than one functional role in the buying decision.

DMUs may be individuals or groups of individuals and have the following roles in the buying process - and let us use an example of your organisation considering the purchase of a new telephone system:

  • Users of the product or service - as the name suggests, these people may use the product or service and may be closely involved in after-sales service yet not necessarily close to the process of deciding which supplier to use or placing the order. For example, your office staff may be using any new telephone system but not involved in early discussions with system suppliers; they would be involved when being trained in how to use the new handsets.
  • Influencers - these people have an effect on the decision-making process yet my never actually use the product or service; they may even be outside your organisation when placing the order. They may be technical advisors, journalists, or perhaps budget holders who influence how much is spent on the new system.
  • Deciders - these people take all the opinions and ideas from the rest of the DMU to reach the final decision. In larger organisations the decision may fall to IT departments, for example, who make recommendations to others in the DMU. It may be a single individual or a team.
  • Approvers - often the budget holders or management team, these are 'signing-off' the decision to buy the new system.
  • Buyers - are involved in placing the order and dealing with the suppliers to ensure that the new system meets specification, is delivered on time, and installed to schedule.
  • Gatekeepers - control access to the rest of the DMU and may be such as secretaries who control whether suppliers can get to speak or meet any of the individuals above.

Before the new telephone system is purchased, everyone in the DMU must be through the buying process to 'decision' and 'action' at the same time otherwise the purchase cannot be agreed. Good CRM systems include information on the DMU and where each individual or group is in the buying process.

Remember, CRM systems are more sophisticated than simple mailing lists. Because they hold information about customer behaviour and preferences they can improve customer satisfaction and retention. They can help you to identify customer needs more effectively, allowing you to up-sell and cross-sell, increasing profitability.

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