Who Are Your Best Prospects?
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 in terms of client intelligence and how they can be used to improve customer retention and satisfaction.
Principle #1: Your best source of new business comes from people you know and/or currently do business with.
You know the drill. You leap on a plane to Europe. You make a big sales pitch in the Far East. It seems that the promotions and big bonuses in your shop always seem to go to the partner or principal who land the Big New Client located in some foreign land.
But while the majority of the investment 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 their precious business development and marketing budgets toward the clients that they know and meet with everyday.
Your best prospects are right here, in your own back yard, where you can meet with them 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 them what's bugging them and offer suggestions on how you can help.
But what about getting 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 and/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/or most profitable segment. In some businesses, this group may represent a minority of your current customers – say only 20 percent. Add to this list your top 20 percent 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 hell 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 maybe 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].
Arthur O'Connor is one of the nation's leading experts on customer relationship management (CRM) and customer-facing IT systems and strategies. He's currently the national columnist for eCRMGuide.com and this year serves as the chairperson of the Institute for International Research's CRM Conference. Arthur has over 20 years leadership and management experience in the area of customer management, strategy and new business development, including 15 years as a senior corporate officer of two NYSE-listed inter national corporations, and over five years experience as an independent management consultant and Big 5 firm practice manager selling and managing large-scale IT engagements.
