Last updated on September 25th, 2023 at 01:11 pm
Although 74% of the business agree that having better customer relationship is a powerful weapon to grow their business, only 18% focus on customer retention. This is very concerning as we know customer acquisition comes at a cost. Isn’t it surprising how companies ignore customer relationship building which can help in retention and easy acquisition leading to forecastable revenue?
B2B customer relationship management CRM can help you establish long term B2B customer relationships by not only improving sales, services, and receivables but also increasing customer lifetime value (LTV) from your key accounts. Read on to know how.
B2B companies (business-to-business) and B2C companies (business-to-consumer) are two different types of business models. In B2B, a business sells product and services to other businesses. While in B2C, a business sells its products or services directly to end-consumers. Some of the key differences are:
• B2B sales involve longer sales cycles when compared to B2C sales.
• B2B transactions involve many decision-makers unlike B2C transactions
• B2B sales are ongoing and long-term, while B2C sales are transactional and short-term.
• Unlike in the case of B2C, B2B strategies go beyond just sales transactions and are focused on building trust and long-term partnerships.
Therefore, B2B and B2C companies need to follow different approaches for customer relationship building.
B2B businesses are unique and complex. They need a CRM system to automate and transform their sales process and end-to-end client operations. These include operations across sales and marketing, lead management, order management, quotation management, service operations, customer support, account receivables, customer success, workflows etc.
Customer relationship management CRM is very helpful in analyzing organization-wide efforts and monitoring combined progress across departments. This helps in revising strategy from time to time and improving one-on-one customer interactions.
Specialized B2B CRM technologies can be an important tool to nurture business relationships which can in turn help B2B businesses grow and succeed in the marketplace.
The lifetime value of a customer (LTV) is a measure of the total value that a customer can bring over the course of their relationship with the company. It is an important metric for assessing the potential value of a relationship with a customer.
Calculating LTV can involve multiple factors like the value of the initial sale, the potential for repeat business, the potential of upselling and cross-selling, and the potential for referrals. Some businesses may also consider the cost of acquiring the customer and the cost of servicing their account in their calculation of LTV. LTV can help prioritize efforts in business development and customer relationship management.
It is advisable for companies to segment their prospects and clients based on the LTV. They can then have a differentiated focus on these segments for better results.
Account and Contact Management
In a B2B CRM system, users can manage and organize client information, contact information of all stakeholders, communication history, details about them and their roles, and notes on past interactions. By doing this, businesses can remain organized and easily access the information they need to maintain and strengthen client relationships.
Opportunity & Pipeline Management
B2B CRM will help your sales teams to manage all the details about the deals and opportunities in one place. Visibility into their sales funnel or sales pipeline will help them stay focused on their key objectives and deal progress.
A good B2B CRM will help them manage deal values, closure dates, closure probability, sales stages, etc., accurately in one structured place for further action. This helps in accelerating sales velocity with the ability to measure and improve critical sales KPIs like average deal value, sales cycle, win rate etc. Expected opportunities from existing customers, can be easily converted into sale in a proactive way when you have strong customer relationships.
Activity & Task Management
Efficiency in managing all tasks and activities go a long way in improving your team’s efficiency and productivity.
Aspects like notifications, reminders for follow-ups, activity assignment and tracking are very essential to improve a company’s ability to execute their sales strategies. When internal processes are streamlined, customers get a better experience at every touchpoint. They feel happier about your company and recommend it more.
Account Receivables (AR) Management
Account Receivables management is an important capability required to help you manage timely collections and daily sales outstanding.
You can automate the schedule of payment cycles as per the payment terms agreed with customers. Your finance team can then assign collection activities to owners and drive accountability for collections. This leads to easier cash flow and reduced outstanding.
Workflows for Team Collaboration
B2B CRMs also provides a workflow framework to help teams collaborate better. It can be effectively used for managing processes like sales order fulfilment that would require collaboration between multiple departments viz. sales, finance, logistics, finance etc. Streamlining all processes leads to timely execution which builds trust and confidence. This builds customer loyalty towards your company and brand.
Automate Service Operations
B2B CRMs go beyond just pre-sales operations and can help you to automate your post-sales service operations as well. It requires a lot of coordination for services and breakdown operations to provide timely service. Providing prompt services can lead to better customer relationships.
They offer capabilities like –
• Installed-Base Management to maintain details about your installations, equipment, service expectations etc.
• Service Visit Scheduling & Assignment to make sure your service teams attend to client service requests on time.
• Service Activity Management & Reporting to automate tasks around daily activity reporting and visit closure reports.
• Configurable Forms & Service Templates to make it easy for reps to capture all information as per required formats
Customer success capability will help you measure and improve customer satisfaction levels periodically. This lets you to proactively make the right decisions to build long-lasting relationships. You can measure end customer rating and learn from their feedback This also helps in identifying newer opportunities.
Mobile app will allow your teams to manage day-to-day activities, customer follow-ups, and reminders effortlessly. This in-turn provides better visibility for superior execution.
Mobile CRM app also offers additional capabilities like easy attendance management, visit tracking, business-card scanning, expense management, offline support, etc. This article details the benefits of having a mobile CRM strategy.
B2B CRMs like HappSales also provide an intelligent assistant along with their mobile CRM. The voice-enabled personal assistant makes the app super-easy for your reps to use the CRM. This in-turn helps you improve your CRM usage and adoption. You can read about this more here.
According to a recent study 64% of customers feel their experience with a company is more important than price when deciding to make a purchase. It’s a clear indication of how boosting customer experience can help in improving sales. And what determines experience? As per Forrester’s research there are only three main factors which determines better customer experience:
• the success of the solving process,
• ease of the solving process, and
• emotions during the solving process.
This experience starts from the 1st touchpoint of a prospect and goes beyond the sale when the prospect turns into a customer. These are the factors that determine how long the customer stays with you and how much they refer you to others. Therefore, investing in your client experience and ensuring they have the best interaction with your company, should be your top priority.
Using the features of CRM optimally can highly influence the overall experience of the customer thereby creating lasting customer relationships. Some of the ways CRM can impact customer experiences are:
CRM helps in understanding customer behaviour. If there is something lacking in your product and there are multiple users facing the same issue, you will have clarity on where to invest to provide better experience with your product. You have the ability to measure critical sales KPIs like average deal value, sales cycle, win rate etc.
Analysing these data gives you fast and easy understanding about your product development opportunities. When you work on these, it creates positivity around the product and increases the chance for repeatable, upsell & cross-sell opportunities.
As per Forbes, a company that provides good service, 66 percent of customers would be more loyal, 65 percent would be willing to recommend the company to others, and 48 percent would spend more money. Using a CRM helps you to consistently provide a good customer experience.
CRM helps in sending timely responses. When your customer support has customer history handy, they can also customise the messaging making it fast and appropriate. All these consistent messages help to improve Loyalty, brand reputation and satisfaction.
Acquiring new customers are costly. Harvard Business Review states, “acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.” This is due to the fact that it generally requires more resources, such as marketing and sales efforts, to attract and convert new customers than it does to maintain and retain existing ones.
Other research also indicates that increasing customer retention rates by just 5% can lead to an increase in profits of 25-95%. This reinforces the idea that providing good customer experience from the beginning can reduce cost and increase profit substantially.
A CRM provides a tool to save all the customer data in one central database be it contact, purchase, or services. No matter what kind of touchpoint customer has with your company, all your employees will have access to that. This ability creates a huge difference in customer experience compared to those who don’t use CRM leading to better ease of solving processes.
Word-of-mouth is an extremely powerful tool, people trust the opinions of the people they’re most close with. When customers have a positive interaction with your company, they’ll be more likely to refer it to their friends and family. Providing a customer with a satisfactory experience expands your brand name and increases your audience.
Having strong customer relationships can be a huge differentiator for you from your competitors. As a result, you become a preferred choice of your customer. This can lead to increased sales without the need for increasing your marketing spend; thereby increasing overall profitability.
It is important to optimize processes and communication in ways that create positive emotional experiences for customers. By providing excellent customer service and building strong customer relationships you can foster positive brand image. CRM helps to make the processes simpler and easier to manage.
This leads to more sales and increased revenue. For example, when a customer shares positive brand experience you can attract new businesses through his word-of-mouth.
Good relationship with your clients also helps you with faster payment collections. If there is a positive relationship, your teams need not follow up multiple times for payments. Your clients to tend to pay up the dues on time. This will significantly reduce the daily sales outstanding (DSO) and improve your cash flow position.
A study conducted by the Harvard Business Review found that companies that excel at customer experience have 10 times higher customer lifetime value than their competitors. Having a strong relationship of trust with your customer can increase average revenue per customer, provide higher retention and lower cost of acquisition.
It is essential to choose a CRM system that is designed to manage and nurture long-term customer relationships. Choose a CRM system that best serves your business needs. It should be capable of providing an up-to-date view of customer information, including current sales opportunities and leads. It should also be able to provide insights into customer trends, making it easier to identify areas where the customer experience can be improved.
Also, it is important to select a CRM system that provides analytics capabilities to help businesses gain insight into customer behavior’s and preferences. By doing so, organizations can more effectively meet customer needs and build deeper relationships with them.
While choosing your CRM make sure you understand the different types of CRMs, analyse your needs and goals and what are the specific needs you are trying to solve. Follow these guidelines to choose the right CRM –
Types of CRM: Do proper research to understand difference between different CRMs. Some of the CRM to consider are: On-Premise CRM and Cloud CRM; B2B CRM and B2C CRM; Sales CRM vs Marketing CRM vs Services CRM; Industry specific CRMs; or usage based on Web or Mobile CRM
CRM Features: Have a clear understanding of what are the must have features of CRM that you absolutely need and what are good to have features.
Ease of Use: Your CRM should be easy to use for better adoptability by your team. Only then you can benefit from your CRM.
Scalability: Purchase the CRM which has the capability to grow as you grow. It is good to have visibility for at least next 5 years.
Total Cost of Ownership (TCO): While making an investment in a CRM, you should have a clear understanding of the total cost of ownership of a CRM.
Implementation Timelines: Understanding the implementation time will give you an idea on aspects like complexity involved, costs involved, need for customizations, training needs, etc. You will then be able to assess when you and your team could expect to see the positive results.
Vendor Support: Getting the right support from the vendor for implementation, their ability to help you with customization, and training services they provide will play a big role in the success of a CRM project.
In business-to-business (B2B) interactions, customer relationships are of paramount importance. A well-executed CRM strategy can help companies strengthen and maintain meaningful, long-term client relationships.
B2B relationships differ from B2C ones since they often span multiple departments and require a greater focus on account management, sales, service, and receivables. B2B CRM is an essential tool for managing these complex relationships efficiently and effectively.
74% of businesses that use CRM report that they are able to build better customer relationships.
Selecting the right B2B CRM for your business will have a long-lasting impact on your growth and profitability. It has a direct impact on improving B2B customer relationships and customer lifetime value.