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Know Your Customers - Or Perish!

Written by: Troy Harrison

Article Overview: Most companies (large and small) don’t know their customers very well. Certainly, some people within the company usually have intimate knowledge of key contacts, information, history, and details about customers, but that information isn’t institutionalized as often as it should be – which means it can leave with your salespeople! Remember, you own this data. To that fact, add this one: The most valuable component of any company’s assets is its customer data. Forget your balance sheet, long-term assets, and short-term assets. Without your customers, and the information regarding those customers, everything else is meaningless. Clearly, some framework of capturing customer data is vital for business success. Capturing and using that data is called “Customer Relationship Management.”

Know Your Customers - Or Perish!

Most companies (large and small) don’t know their customers very well. Certainly, some people within the company usually have intimate knowledge of key contacts, information, history, and details about customers, but that information isn’t institutionalized as often as it should be – which means it can leave with your salespeople! Remember, you own this data.

To that fact, add this one: The most valuable component of any company’s assets is its customer data. Forget your balance sheet, long-term assets, and short-term assets. Without your customers, and the information regarding those customers, everything else is meaningless. Clearly, some framework of capturing customer data is vital for business success. Capturing and using that data is called “Customer Relationship Management.” To get the most out of your sales team, you must have a system to gather this data.

There are numerous contact management systems on the market to be used on a personal computer. ACT! and GoldMine are two of the most popular ones, but more are released each year. Data can also be gathered on paper forms (check out www.mackay.com for the “Mackay 66” questionnaire – this is an excellent template). Essentially, you want to preserve any key information that affects your ability to do business with your customers. This includes (but is not limited to) contact names, company size, and any variable data that indicates how much of your “stuff” they can buy. To implement a data-gathering system, follow this simple process:

Define the information you wish to capture about your customers. The best way to do this is by identifying your top customers. Your “top” customers are not necessarily those customers who produce the most top-line revenue; they are the ones that produce the most profit. While some business owners prefer to use profit margin as their favorite measurement, I’m of the opinion that the only thing you can spend is profit dollars – so in measuring your top customers, I’d advocate ranking them by profit dollars generated.

Once you have your top customers identified, it’s time to look for similarities and patterns. Hopefully, there are common elements that join them. Look for those similarities and then identify those areas as data fields to preserve. Examples of fields that would fit this definition are Industry, Number of employees, Annual revenue, Square footage, etc. List all the fields that identify good customers. You’ll also want to list basic information like name, address, key contacts, phone, etc.

Choose a platform for your CRM system – software or paper, etc. I’m a big believer in software systems like ACT! And GoldMine, but there are others out there. Software makes it easier to run queries and segment your market, as well as generating good reports on your sales efforts. If you decide to use software, you’ll want to customize your database through the “User Defined” fields to capture your key information. Software will also allow you to preserve notes on activities performed with that customer.

If you decide to use the old-tech paper method, you’ll need to make up some customer information sheets with blanks for key fields and contact information, as well as space for notes. You’ll need to keep copies of the papers in a central location, and your salespeople will need copies as well. If this sounds like a lot of work (particularly when it’s time to update and correct information), it is. All the more reason to use a database contact manager.

Make the salespeople/customer service people responsible for gathering the data in their customer interactions. Your salespeople are not the owners of the data; they are custodians whose job it is to make sure that the data is complete and current. To that end, salespeople and customer service people should regularly review customer data with an eye toward completing or updating it with each customer interaction.

Follow up to ensure that data is gathered and maintained. This is best done by periodically surveying your database for blank fields, old activities, or long gaps between updates and corrections. This should be part of the performance review process – the salesperson’s duty is to keep a “clean house” with respect to the customer data under their control.

Finally, it’s as important to make data accessible internally to sales and service personnel as it is to make it inaccessible to outside personnel. Make sure that your communications and security processes are intact, and review them often.

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