9 July 2009

Companies that better connect with customers should weather the economic storm

At a time when the manufacturing industry is at its most competitive, businesses cannot afford to let relationships with their customers slip. Lindsay James takes a look at the CRM technology that is enabling manufacturers to better connect with existing customers, and weather the current economic storm.

Customer-centricity is something that many businesses work towards, especially in the retail and hospitality industries. However, manufacturing has traditionally been a different story. For years manufacturers have been product-focused, relying on their goods to sell themselves.

But, as competition reaches an all-time high, manufacturers can no longer sell on products alone. While the latest Confederation of British Industry (CBI) survey found that the outlook for the manufacturing industry has improved, with many firms in the sector expecting the pace of decline to slow in the next three months, a fall is still expected, albeit at a much slower rate. Across the world, the story is much the same.

“At the moment manufacturers are focusing on activities that have an immediate, measurable impact such as workforce productivity rather than spending on IT where the benefits tend to be realised over a longer time period,” says Marina Stedman, vice president of marketing at SalesCentric. “However, for manufacturers in developed economies to compete effectively with those in emerging markets which have much lower costs, they need to move up the value chain by adding value to the manufacturing process. This requires an in-depth understanding of customers and their needs and desires.”

Manufacturers need to make customers the pivotal point in the business processes

Maria Jesús Llorente, Qurius Advanced Solutions For these reasons, manufacturers are fast accepting the fact that in order to boost sales and increase profits they need to pay more attention to their customers. Customer relationship management (CRM) is the technology that manufacturers are choosing as they are finding that consumers require more and more attention.

“Manufacturers need to make customers the pivotal point in the business processes,” says Maria Jesús Llorente, director of Qurius Advanced Solutions, Spain. “Our economy has switched from being a seller-driven economy to be a predominately buyer-driven economy. By leveraging the voice of the customer, manufacturers get a competitive advantage in redefining all customer-facing operations.

“That is where CRM takes centre stage, by being the vehicle to implement and execute strategies where knowing customers and manage the relationship with them is a priority. However, we should not forget that CRM is not only a technology, but a strategy. The strategy needs the technology and vice versa.”

Modern manufacturing theory refers to the idea of integrating the customer into all aspects of the supplier’s business and vice versa, as Haresh Khatwani, worldwide director for EPG at Microsoft explains: “Customers’ needs generally extend to issues far beyond the suppliers’ proposition, and will often include the buying-selling process, the way that communications are handled, and the nature of the customer-supplier relationship. This implies a relationship that is deeper and wider than the traditional ‘arms-length’ supplier-customer relationship. The modern approach to CRM technology is based on satisfying all of the needs of the customer’s people, systems and processes.”

An enabler for success
CRM is a technology that allows manufacturers to track and leverage every customer interaction to maximise revenue opportunities and improve customer loyalty. But CRM does much more than just track customer interactions. It also helps organisations optimise their operations by automating routine tasks and standardising best practices. Ultimately, CRM allows organisations to better acquire, manage, serve, and extract value from their customers while improving operational efficiency -something that is critical in today’s economy.

In fact, customer relationship management was noted as a leading priority of business executives by AMR Research in 2008 (Fletcher 2008). This trend has continued, with Forrester Research showing that more than a third of enterprises plan for CRM upgrades in 2009 (Marston 2009). And Nucleus Research goes on to state: “If there is one technology area where you should increase your investment today, it’s CRM.”

With many traditional CRM solutions, users are often forced to make significant behavioural changes to use the system. However, Microsoft has taken a different tact. “By providing users with a familiar look and feel through a commonly-used tool like Microsoft Office Outlook messaging and collaboration client, Microsoft Dynamics CRM helps them get up to speed quickly and complete tasks with minimal hassle,” says Khatwani. “For example, with just a click, users can promote existing Office Outlook contacts to Microsoft Dynamics CRM. E-mail messages and calendars are automatically synchronised with Office Outlook, which alleviates tracking information in multiple sources.”

“With the Microsoft offering, users will want to use CRM, not have to use CRM,” says Llorente. “It is fully integrated with Microsoft Outlook, with the entire Office platform in fact, and uses SharePoint as the main collaboration and information worker solutions.”

Furthermore, when compared to setting up a new manufacturing plant, hiring a cadre of new sales and customer service representatives, or raising capital to acquire other companies, CRM is a technology that can be implemented rapidly with relatively limited costs. In fact, once implemented, Microsoft Dynamics CRM can help to reduce costs dramatically. It makes it easier for organisations to deliver cost-effective customer service, and it enables organisations to minimise IT costs through system consolidation.

A better understanding
In an era when customers are disloyal, manufacturers need a CRM system that allows them to truly understand the needs and wants of their customers, and one that enables them to offer impeccable customer service. “Customers want a high degree of account management,” says John Pearson, sales director at ConsultCRM. “They want to be understood, and ideally be ‘intelligently anticipated’ with timely communications and offerings. This only happens through deep client insight and regular contact.”

“Customers are expecting more value, lower prices, global capability, agility, high quality and a better service experience,” says Jukka Valkonen, director of marketing and communications at Tieto. “In order to live up to these expectations, manufacturers need tools that automate business processes, are available around the clock globally, and are mobile and intuitive for the users. Last but not least, the same systems should serve all the parties: manufacturers, partners, suppliers, distributors and customers. All of this can be achieved through Microsoft’s strong portfolio of CRM solutions.”

In order to further examine customer expectations, analytics solutions, such as Microsoft’s PerformancePoint Services, can be implemented to gain a better understanding of the customer. “One of the more difficult, yet more precise, types of measurement is the ability to understand the actual intentions of customers in their own words,” says Khatwani “What services did the customers actually need? Did they ask for something completely different from what they needed? Was the manufacturer able to discern the actual need and convert the interaction into a sale?”

In fact, while many manufacturers think they have a healthy customer service operation, this type of analysis can prompt them to think again. “There is often a gap between the service customers expect and the actual service experience,” continues Khatwani. “Pinpointing this gap is key to improving service. Furthermore, manufacturers should align the expectations that marketing and sales set with customers in terms of customer service. This can be done by isolating both customer intentions and expectations when they contact customer service, then comparing delivery against those expectations to find what’s clogging the system.”

Microsoft’s PerformancePoint Services is just one of many solutions that can add value to Microsoft’s CRM solution. The Microsoft Partner network is allowing manufacturers to choose from a wide range of tools that enable them to tailor CRM to their own needs, and that can provide competitive differentiation. One such solution comes from Sales Centric, as Stedman explains: “SalesCentric’s Graphical Relationship Charts uses the information already in Microsoft Dynamics CRM to facilitate easy account mapping, opportunity qualification and cross-selling working the way that sales people work and helping them to be more successful – while at the same time providing the forecast information needed across the entire supply chain. Understanding relationships with and between clients and seeing them in a user-friendly, visual format makes it easy to devise plans of action for improving and strengthening them to shorten sales cycles and close deals faster.”

Microsoft Gold Partner Jet Reports offers another solution – a reporting system that draws information from Microsoft Dynamics CRM straight into Excel, allowing manufacturers to explore tables and fields for a better understanding of where the data is and what it means. “Jet Reports can pull from multiple companies and databases to consolidate information into one report or one cell,” says Phil Bride, president of the company. “The result is a combination of data that offers much more accurate reporting of the manufacturing business. Data from a legacy system need not be migrated, as Jet Reports allows the legacy data to be consolidated with new system data.

A customer-focused future
It seems clear that manufacturers of the future will have CRM technology at the forefront of their business. “A CRM system will become a self-evident must for every manufacturing organisation, equal to ERP or office tools,” says Jukka Valkonen, director of marketing and communications at Tieto. “A customer master data base together with all the knowledge and transactions associated with customers will be seen as the crown jewel asset of a competitive business. More and more manufacturing companies will see that their sustainable competitive edge is not in the costs or its products but in its customer intimacy.”

“The future of CRM is bright indeed,” concludes Llorente. “CRM will become deeply ingrained as a business strategy for most companies. Technology will evolve while technical and organisational challenges are overcome. Much will change in the years ahead, but one thing is certain: CRM is a journey, not a destination, and customers have their hand on the roadmap and the steering wheel. The rest is up to us.”

This article first appeared in the Summer 2009 edition of Prime.

Add a comment