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 can easily search for information, and due to the declining birthrate and shrinking population, competition for customers among companies has intensified.
With many competitors in the market, companies must ensure that a large number of potential customers are aware of their brand to increase service recognition and encourage product trials. This necessitates the use of web and mass advertising, which in turn drives up the costs associated with acquiring new customers.
For example, by collecting data on how new customers are approached and their subsequent reactions, companies can gain insights into customer psychology, which is instrumental in evaluating effective marketing strategies. For existing customers, consolidating data such as past interactions, purchase history, and behavioral trends allows for the implementation of measures tailored to each customer's needs, thereby fostering long-term and robust relationships.
2. Difficulty in Achieving Competitive Advantage
The second point is the increasing difficulty of achieving a competitive advantage.
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 identifying why your products are chosen or why customers might switch to competitors, ultimately leaving you at a disadvantage.
By managing customer data, you can understand their needs and behavioral patterns, enabling you to provide the optimal approach that customers are seeking.
Furthermore, centralizing customer information allows for information to be viewed and verified across all departments, thereby improving operational efficiency. For instance, the sales department can propose products or services that solve specific customer challenges, the development department can create or improve offerings that align with customer needs, and the marketing department can utilize these insights 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 Customer Management
There are several benefits to customer management; here, we introduce three major ones.
1. Leads to Improved Service and Product Quality
By conducting customer management—such as tracking purchasing behavior, identifying products purchased in sets, and conducting surveys—you can improve the quality of your services and products.
Managing and analyzing past customer data helps identify both the aspects of your products or services that are well-received and the challenges that need to be addressed.
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 service or product improvements.
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2. Enables Customer-Centric Approaches
Understanding customer needs allows you to anticipate their pain points and challenges, enabling you to propose products at the exact moment they truly desire them.
In today's internet-driven era, customer needs are diverse and change rapidly.
For example, you can implement appropriate responses such as "analyzing pages viewed by first-time purchasers to send newsletters featuring products they are likely interested in" or "distributing a 10% discount coupon to third-time purchasers for future use."
If you can identify the companies visiting your website, it also serves as material for re-engaging dormant customers and planning sales approaches.
By implementing customer management to grasp these needs, both B2C and B2B companies can execute approaches that effectively capture customer interest, leading to increased sales and higher LTV.
3. Enables Targeted Advertising Based on Customer Needs
By grasping customer needs through customer management, you can deliver advertisements exclusively to prospective customers when utilizing web advertising.
For example, if customer management clarifies 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 around the keyword "dry skin," enabling highly focused advertising campaigns.
For B2B companies, collecting intent data—such as identifying companies interested in CRM/SFA or MA—allows for the optimization of advertising strategies.
This eliminates the need to run ads with low cost-effectiveness and allows you to focus solely on high-potential prospects, thereby reducing 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 focus on the information and items handled in B2B customer management.
Basic Information
When the customer is a company, the following items are required for customer management information:
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- Company Name
- Address
- Contact Information (Phone Number, Email Address, etc.)
- Representative Name
- Capital
- Number of Employees
- Industry
- Business Description
- Fiscal Year-End
- Revenue Scale
- Group Companies
- Contact Person Name
- Website, Social Media, etc.
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In addition to business cards, this information can be obtained from the customer company's official website or public documents. For contacts with whom you have a relationship, it is also helpful to summarize their job title and the name of their supervisor to the extent known, as this can serve as a catalyst for deepening the relationship.
History Information
When there are interactions between companies, you should manage "Sales Information" such as negotiation history, number of contracts, procurement costs, and billing types; "Contract Information" such as contract value, purchased products/services, and contract expiration dates; and history regarding inquiries.
Having this information available ensures a smooth handover if your company's representative is absent or resigns, preventing lost opportunities.
It is crucial to record this information along with dates. The environment surrounding your company and your customers changes over time. By tracking how much time has passed since the last negotiation or inquiry, you can identify necessary actions, such as making new proposals based on market changes or introducing new products that were not available previously.
History information is not just for handovers. For example, inquiry information from customers provides important hints for improving product/service quality and finding highly compatible recommended products or 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. In particular, if there have been complaints or issues in the past, it is necessary to keep records to prevent recurrence. Should a similar issue occur again, it could lead to a loss of trust and potentially the termination of the business relationship. Record what kind of trouble occurred and how it was handled. Conversely, recording positive feedback can also be leveraged in sales and negotiations.
Furthermore, by recording instructions or requests from customers and the actions taken, other staff members can quickly grasp the situation and respond appropriately. This also streamlines handovers by having the data digitized. Additionally, be sure to record and manage useful information such as meeting notes and history of changes in contact personnel.
Three Tools for Streamlined Customer Management and More
CRM (Customer Relationship Management System)
CRM is a tool designed to collect, manage, and analyze 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.
CRM systems not only allow for the registration of customer information (such as age, gender, and company name) but also include features useful for analysis, such as data segmentation 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 businesses.
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.
In recent years, CRM and SFA are often discussed in the same context, as SFA 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 with individuals, there is a risk of missing engagement opportunities or optimal closing windows. It is essential for all team members to share the same information and strengthen collaboration.
Since SFA is well-suited for pipeline management, it is a recommended tool primarily for B2B companies where sales negotiations and similar activities occur.
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 experiences 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 automated delivery of optimal approaches to every lead.
MA tools are effective for new customer acquisition. Therefore, they are recommended for companies that frequently participate in trade shows or events and collect many business cards, or for those that 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, one of the applications in Microsoft Office, can also be used as a customer management tool. It has a low barrier to entry and ease of learning, and as a spreadsheet application, it supports complex calculations and graph creation.
However, other tools lack the ability for multiple users to edit simultaneously and do not retain history prior to updates, which can be inconvenient for team collaboration and identifying the cause of input errors. Furthermore, if you wish to manage customers in real-time as much as possible, you should consider other tools, as these alternatives may struggle with real-time status tracking, experience performance degradation with large data volumes, or pose a risk of data corruption during PC malfunctions.
Three Key Points for Selecting a Customer Management Tool
When choosing a tool, the three most important factors are Usability, Functionality, and Cost. The points to verify for each are as follows.
1. Usability
Even if a tool has excellent performance, it will not be adopted by the team if it is difficult to use. Implementing a tool with overly complex operations increases training costs, so it is essential to choose a user-friendly solution. In environments where some staff are not accustomed to IT tools, failing to prioritize usability can lead to poor adoption, or result in increased errors and reduced operational efficiency due to an inability to master the software. Therefore, select 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 staff members test it and provide feedback on their experience before making a decision.
2. Functionality
Unused features can clutter the interface and make it difficult to navigate, so it is important to choose a product that focuses only on the necessary features. To identify the required features, clarify your customer management challenges and verify whether the product has the capabilities to resolve them. For example, if you want to leverage the tool for marketing strategy or customer understanding, choose a product that can record customer behavior and interaction history.
Additionally, you must check whether the tool is compatible with your company's devices and whether it complies with your internal security policies to ensure it can be used without issues.
3. Cost
It is also important to verify the cost-effectiveness of the tool implementation. 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 whether there are any functions you will be unable to utilize before proceeding with implementation.
The Inevitable Data Problem
Achieving improved results 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.
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