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, while declining birthrates and shrinking populations have led to increased competition among companies for customers.
With many competitors in the market, companies must ensure that a large number of potential customers are aware of their brand to expand awareness of their services or encourage product trials. This requires the use of web advertising and mass media advertising, which in turn drives up the costs associated with acquiring new customers.
For example, by collecting data on how you approach newly acquired customers and what reactions you receive, you can understand customer psychology, which helps in evaluating effective marketing initiatives. 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 identifying the reasons why your products are chosen or why customers might switch to competitors, ultimately causing you to fall behind.
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! ▶
3 Benefits of Implementing Customer Management
There are multiple benefits to customer management; here, we introduce three major ones.
1. Leads to Improved Quality of Services and Products
By implementing 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 allows you to identify both the aspects of your products or services that are well-received and the areas that require 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 be used to improve your offerings.
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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 world, customer needs are diverse and change rapidly.
For example, you can implement appropriate responses that customers expect, such as "distributing newsletters featuring products likely to interest first-time purchasers based on their browsing history" or "providing a 10% off coupon for third-time purchasers to use on their next visit."
If you can identify the companies visiting your website, this information can also serve as material for reviving dormant customers or for sales outreach.
By implementing customer management and grasping these needs, you can facilitate approaches that capture customer interest in both B2C and B2B contexts, leading to improvements in sales and LTV.
3. Enables Ad Campaigns Targeted at Prospects Based on Grasped Needs
By grasping customer needs through customer management, you can deliver web advertisements exclusively to prospective customers.
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 ad campaigns or landing pages centered on the keyword "dry skin," enabling highly targeted advertising.
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 approach only the most promising prospects, 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 focus on the information and items handled in B2B customer management.
Basic Information
When the customer is a company, the following items are necessary for 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
- Revenue 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 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 "negotiation information" such as meeting history, number of contracts, cost of goods sold, and billing types; "contract information" such as contract value, 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 crucial to record this information along with dates and times. The environment surrounding your company and your customers changes over time. By grasping how much time has passed since the last meeting or inquiry, you can identify necessary actions, such as making new proposals based on changes in the market environment or suggesting 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 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. In particular, if there have been complaints or troubles in the past, it is necessary to keep records to prevent recurrence. If a similar trouble were to occur again, you risk losing trust and potentially ending the business relationship. Record what kind of trouble occurred and how it was handled. Conversely, recording positive feedback can also be useful for sales and negotiations.
Additionally, by recording instructions or requests from customers in the past, as well as the actions taken, others can quickly grasp and respond to the situation if they need to take over. This also makes handovers effortless since the data is already digitized. Furthermore, be sure to record and manage useful information such as meeting notes and history of changes in contact persons.
3 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.
CRM not only allows for the registration of customer information (such as age, gender, and company name) but is also equipped with features useful for analysis, such as segmenting data and displaying customers based on their last point of contact.
Since CRM is equipped with features to enhance customer relationships, it is 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 lose the timing for closing deals. 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 high volume of business card exchanges" 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 version history, making it inconvenient for team collaboration and difficult to identify the cause of input errors. Furthermore, it is difficult to grasp real-time status, performance slows down as data volume increases, and there is a risk of data corruption in the event of PC issues. If you wish to manage customer data 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. Introducing 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, misuse, and increased errors, ultimately reducing operational efficiency. Therefore, select a tool that is easy for IT beginners to handle and does not require complex operations. If a trial version is available, have the actual end-users test it and gather their feedback before making a final decision.
2. Functionality
Having 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 these, clarify your customer management challenges and verify whether the product has the specific features required to solve them. For example, if you want to leverage the tool for marketing strategy or deeper customer understanding, 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 you are not paying for functions you will not use.
The Inevitable Data Problem
Achieving success through customer management or sales support systems is impossible without the right combination of tools, operations, and data. Data-related issues, in particular, are often postponed because they are time-consuming and complex to address. Consulting with experts 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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