CRM stands for customer relationship management. It's technology to analyze and manage customer interactions and data across the customer lifecycle, thereby building better customer experiences, better customer service, and better business relationships while increasing revenue.
If recent years have been tough for business-to-consumer (B2C) brands, spare a thought for those in the business-to-business (B2B) world.
In B2B, business is driven by the buyers, who are typically almost three-quarters of the way through their journey-to-purchase before interacting with suppliers.
Incredibly, B2B organizations believe that this continues to lengthen, and with Gartner forecasting that by 2020 more than 85 percent of the decision will be made without any human interaction, this raises the question of how organizations can win a sale when there will be no personal contact.
Clearly, customer loyalty is paramount—when you win a customer, you must keep them. But here’s the kicker: research indicates that the B2B sector is finding it tough to maintain customer relationships, even harder than their B2C counterparts in fact. A recent Bain & Company survey of almost 300 executives within B2B industries revealed that 68 percent feel that customers are less loyal than they used to be.
But tough times demand decisive action. And in this case, B2B organizations have been pinning their hopes on CRM.
CRM B2B evolves into table stakes
Figures indicate that CRM investment in B2B companies is increasing. According to an Econsultancy report from last year, CRM took the top spot in technology investment, with half of the businesses surveyed stating they planned to invest in CRM over the course of 2014, a jump of 4 percent from the previous year.
97 percent of B2B brands are using CRM technology just to stay in the game
This has made CRM adoption less of a competitive differentiator, and more like table stakes to ensure you stay in the game. The 2014 B2B Demand Generation Benchmark report by Software Advice revealed that 97 percent of B2B respondents were using CRM technology, making it the second most commonly-used technology after email marketing software.
So why has CRM emerged as a stalwart of the B2B world? What B2B problems does CRM solve?
“It’s hard work managing multiple decision-makers”
B2B organizations often have high expectations for individualized customer service—something that is complicated by the fact that there are often multiple decision-makers in any one customer’s company.
Each of these could be responsible for a different aspect of the purchase decision, so the needs and wants of these multiple parties need to be delicately managed. CRM systems are an effective way of managing these separate contacts, not only in terms of logging business developments such as their concerns and responsibilities, but also personal details that help to manage the interpersonal relationships.
“Our data is in disparate systems across the business”
Many B2B businesses hold valuable customer information in a variety of places—probably because there are typically far fewer customers to manage compared to B2C—making it difficult to monitor customer buying habits and form a complete view. A CRM system stores data in one place, creating a single view of the customer that everyone can access and use to closely follow any buying habits, interactions or preferences.
“Our marketing messages aren’t impactful”
Having this single source of data can also help B2B executives when implementing marketing campaigns, enabling them to group customers into appropriate segments and send relevant, personalized marketing messages, as well as track the progress of the campaign. This is particularly important in the B2B world, with Forrester Research estimating that more than 50 percent of vendors are eliminated before a sales rep even has a chance to engage. Therefore, using the data in a CRM system can help create targeted, impactful messages before it’s too late.
“Customer feedback isn’t being recorded or used”
Some customer feedback is structured and formal and therefore it can be relayed to the right person at the right department, something that is important if organizations are to keep their customers happy and become more effective. However, often feedback can be more informal and unstructured, like a comment during a conversation about a particular change that could be made to a service, for instance. CRM allows you to capture important information from customers, but also ensures that something is done about it by sharing with the relevant people in the organization through alerts and reports.