Two Reasons Why Customer Management Is Considered Important
The following two points are cited as reasons why the importance of customer management is increasing.
1. Rising Costs of Acquiring New Customers
The first reason is the rising cost of acquiring new customers. With the spread of the internet, customers are in an environment where it is easy to search for information, and due to declining birthrates and a shrinking population, competition for customers among companies has intensified.
With many competitors, it is necessary to make a company known to many customers in order to expand awareness of one's own services and have them choose your products. To achieve this, the use of web advertising and mass media advertising is necessary, which leads to an increase in the costs associated with acquiring new customers.
For example, by collecting data on how you approach newly acquired customers and what their reactions are, you can understand customer psychology, which helps in evaluating effective marketing strategies. Furthermore, for existing customers, aggregating data such as past interactions, purchase history, and behavioral trends allows you to implement measures tailored to each customer's needs, thereby building a long-term and robust relationship.
2. Difficulty in Gaining Competitive Advantage
The second point is that the difficulty of gaining a competitive advantage is increasing.
Without an understanding of customer needs, it is impossible to gain a competitive advantage. While understanding your own customers leads to the optimization of approaches toward new prospects, a lack of customer insight prevents you from knowing 'why your products are chosen' or 'why customers switch to competitors,' leaving you at a disadvantage.
By implementing customer management, you can understand customer needs and behavioral patterns, enabling you to provide the optimal approach that customers are seeking.
Furthermore, centralizing customer information allows for viewing and verification across all departments, which improves operational efficiency. For example, the sales department can propose products or services that solve the specific challenges a customer faces, the development department can create or improve products and services that align with customer needs, and the marketing department can utilize this data to formulate new strategies.
Reference Article: What Is Customer Analysis? A Thorough Guide to 16 Frameworks and Tools That Directly Impact Sales! ▶
Three Benefits of Implementing Customer Management
There are multiple benefits to be gained from customer management; here, we introduce three major ones.
1. Leads to Improved Quality of Services and Products
By implementing customer management—such as tracking customer purchasing behavior, identifying products purchased in sets, and conducting surveys—you can improve the quality of your services and products.
By managing and analyzing past customer data, you can identify aspects of your products or services that are well-received, as well as areas that need improvement.
For example, if a certain number of customers use a free trial but do not convert to paid members, you can form hypotheses regarding issues such as 'the price is too high' or 'the service is difficult to use,' which can then lead to improvements in your services or products.
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2. Enables Tailored Approaches to Customers
Once you understand customer needs, you can proactively propose products that address their concerns and challenges, allowing you to make precise appeals at the exact moment the customer truly wants them.
In today's internet-driven world, customer needs are diverse and change rapidly.
For example, you can implement appropriate responses that customers expect from your company, such as 'distributing newsletters featuring products likely to interest customers based on their browsing history for first-time purchasers' or 'providing a 10% discount coupon for use on future purchases for third-time purchasers.'
If you can identify the companies visiting your website, it also serves as material for reviving dormant customers and for sales outreach.
In this way, if you can implement customer management and grasp needs, you can facilitate approaches that capture customer interest in both B2C and B2B contexts, leading to expected improvements in sales and LTV.
3. Enables Ad Operations Focused on Prospects Based on Grasped Needs
By grasping customer needs through customer management, you can deliver advertisements only to prospective customers when using web advertising.
For example, if customer management clarifies the need that 'many customers using our products are women in their 20s suffering from dry skin,' you can narrow your target and create ads or landing pages centered on the keyword 'dry skin,' enabling highly targeted advertising measures.
For B2B companies, collecting intent data—such as identifying companies interested in CRM/SFA or MA—enables the optimization of advertising measures.
This eliminates the need to run advertisements with low cost-effectiveness and allows you to approach only those prospects most likely to convert, thereby leading to a reduction in advertising costs.
Reference Article: What Is Intent Data? Visualizing Customer Interests Through Behavioral Data ▶
Information and Items Handled in Customer Management
The customer information and items handled differ between B2B and B2C. Here, we explain mainly the information and items handled in B2B customer management.
Basic Information
When the customer is a company, the following items are necessary as customer management information:
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- Company Name
- Location
- Contact Information (Phone Number, Email Address, etc.)
- Representative Name
- Capital
- Number of Employees
- Industry
- Business Description
- Fiscal Year-End
- Sales Scale
- Group Companies
- Contact Person Name
- Website, Social Media, etc.
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This information can be obtained from the customer company's official website or public documents, in addition to business cards. For contact persons with whom you have a connection, summarizing their job title and the name of their supervisor, to the extent known, can serve as a catalyst for deepening the relationship.
History Information
When there are interactions between companies, you should manage 'negotiation information' such as negotiation history, number of contracts, purchase costs, and billing types; 'contract information' such as contract amounts, purchased products/services, and contract expiration dates; and history information regarding inquiries.
If your company's representative is absent or resigns, having this information ensures a smooth handover and prevents lost opportunities.
It is very important to keep this information recorded with dates. The environment surrounding your company and the customer changes over time. By grasping how much time has passed since the last negotiation or inquiry, you can notice actions that should be taken, such as new proposals based on changes in the market environment or proposals for new products that did not exist at the time.
History information is not just for handovers. For example, inquiry information from customers provides important hints for improving product/service quality or finding highly compatible recommended products/services. Improvements and proposals based on history information lead to increased customer loyalty. Thus, history information is vital data for realizing communication that considers the customer's perspective.
Supplementary Information
Notes and instructions regarding customers are also important information. Especially if there have been complaints or troubles in the past, it is necessary to keep records to prevent recurrence. If such trouble were to recur, you risk losing trust and potentially losing the business relationship. Record what kind of trouble occurred and what measures were taken. Conversely, if there were positive feedback, recording that can also be useful for sales and negotiations.
Additionally, by recording instructions, requests, and handled content from customers in the past, others can quickly grasp and respond to the situation if they need to take over. It also saves time during handovers because the data is already digitized. Furthermore, be sure to record and manage useful information such as points to note during meetings and history of changes in contact persons.
Three Tools + α for Smooth Customer Management
CRM (Customer Relationship Management System)
CRM is a tool that collects, manages, and analyzes customer information to improve sales activities and marketing initiatives.
By registering information about customers who have purchased products into a CRM, you can track and analyze their purchase history and behavioral patterns, leading to more effective sales and marketing strategies.
In addition to registering customer information (such as age, gender, and company name), CRM systems are equipped with features useful for analysis, such as segmenting data and displaying customers based on their last point of contact.
Since CRM systems are equipped with features to enhance customer relationships, they are recommended for companies with customer success departments and B2C enterprises.
Reference Article: What Is CRM? Benefits, Implementation Steps, and How to Choose a CRM Tool ▶
SFA (Sales Force Automation)
SFA is a tool designed to streamline sales activities and improve sales performance.
Recently, CRM and SFA are often discussed in the same context, as these tools provide not only customer management but also the visualization of sales activities.
For example, it is possible to record and centrally manage the progress of appointments and business negotiations for each corporate contact. This allows you to quickly grasp necessary information and conduct more efficient sales activities.
Furthermore, SFA enables information sharing across the entire sales team. If critical customer information remains siloed, you may miss opportunities for engagement or potential orders. It is essential for everyone to share the same information and deepen collaboration.
Since SFA is well-suited for opportunity management, it is a recommended tool primarily for B2B companies that handle business negotiations and similar activities.
Reference Article: What Is SFA (Sales Force Automation)? Explaining Basic Functions, Implementation Methods, and Keys to Adoption! ▶
MA (Marketing Automation)
MA is a tool designed to automate marketing activities and streamline lead acquisition. In today's internet-driven era, it is essential to provide personalized responses tailored to the individual preferences of each consumer.
For example, by analyzing user behavior such as website visit frequency and pages viewed, it is possible to automatically send personalized email newsletters tailored to each individual user. This allows for the optimal approach to be executed automatically for every lead.
MA tools are effective for new customer acquisition. Therefore, they are recommended for companies that "frequently exhibit at trade shows and events, resulting in a large volume of business cards" or "lack dedicated staff to support the sales department."
Reference Article: What Is MA (Marketing Automation)? Explaining Basic Functions, Implementation Methods, and Keys to Adoption! ▶
Excel
Excel, an application within Microsoft Office, can also be used as a customer management tool. It has a low barrier to entry and ease of operation, and as a spreadsheet application, it supports complex calculations and graph creation.
However, it lacks the simultaneous multi-user editing capabilities found in other tools and does not retain history prior to updates, making it inconvenient for team collaboration and identifying the causes of input errors. Furthermore, it is difficult to grasp the situation in real-time, performance slows down as data volume increases, and there is a risk of data corruption in the event of PC issues. Therefore, if you wish to manage customers in real-time as much as possible, you should consider other tools.
Three Key Points for Selecting Customer Management Tools
When selecting a tool, the three most important factors are Usability, Functionality, and Cost. The key points to verify for each are as follows.
1. Usability
Even the most high-performance tool will not be adopted by your team if it is difficult to use. Implementing a tool with overly complex operations leads to high training costs, so it is essential to choose a user-friendly solution. Especially in environments where some staff are not accustomed to IT tools, failing to prioritize usability can result in low adoption rates, or lead to increased errors and reduced operational efficiency due to an inability to master the system. Therefore, choose a tool that is easy for IT beginners to handle and does not require complex operations. If a trial version is available, it is recommended to have the actual end-users test it and provide feedback before making a final decision.
2. Functionality
Unnecessary features can clutter the interface and make it difficult to navigate, so it is important to select a product that focuses only on the features you need. To identify the necessary functions, clarify your customer management challenges and verify whether the product has the capabilities to solve them. For example, if you want to leverage the tool for marketing strategy or customer insight, choose a product that can record customer behavior and interaction history.
Additionally, you must verify that the tool is compatible with your company's devices and complies with your internal security policies.
3. Cost
It is also important to verify the cost-effectiveness of the tool. There is no point in using a tool if the benefits do not justify the initial investment and ongoing operational costs. Since tool prices tend to increase with the number of features, confirm before implementation that there are no features you will be unable to utilize.
The Inevitable Data Problem
Achieving success through customer management or sales support systems is impossible without the alignment of three elements: Tools, Operations, and Data. Data issues, in particular, are often postponed because they are time-consuming to resolve and involve complex responses. Consulting with an expert may be the fastest path to a fundamental solution.
uSonar provides customer data integration solutions that drive Sales DX.
Please check here for more details.
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