People buy from people they know, like and trust. Establishing that rapport is a two-way street – customers and prospects get to know you and your business, and you get to know them and theirs.
But with hundreds of names in the typical distributor’s database of existing and potential customers and only a handful of outside salespersons, keeping information current and accurate can be a challenge. Helping to take some of the effort and time out of the process are customer relationship management (CRM) programs. These electronic tools formalize and automate managing customer interaction, allowing your business to better allocate resources and ultimately grow sales and build long-term customer loyalty.
According to Mike Wolver, national director of sales for the trucking industry at Signature Worldwide, there are three key elements to a successful CRM program:
- Finding out more about customers;
- Communicating with customers; and
- Maintaining relationships with customers.
While you may think you already have information on your customers, according to Wolver, most businesses only have detailed information on their top customers, leaving an untapped reserve of potential sales in their existing customer base.
He explains that if you have 500 customers and two outside salespeople, you likely only have detailed information on about 100 customers. On average, an outside salesperson can comfortably handle 40 to 50 accounts. That leaves 400 accounts for which you may lack information.
You need to assign someone inside your organization to gather information on these accounts or hire an outside firm to do so for you. The first piece of information you will need is the name of the contact person. This is not the person to whom you will send the bill, but rather, the decision maker at the fleet. Other pertinent questions to ask include: How many trucks are in your fleet? Who is your number one supplier of aftermarket parts? What makes and models of trucks do you typically operate? You also will want to find out about typical haul lengths and loads.
Gather any information that will help you anticipate a customer’s needs and provide him with the best solution for his operation and any challenges he may encounter.
According to John Lebel, chief technology officer, Karmak, a properly executed CRM program allows you to:
- Measure how well you are meeting customers’ needs;
- Build stronger relationships with customers and build customer loyalty;
- Identify which customers are profitable and which are not;
- Increase sales to profitable customers;
- Determine what is needed to make non-profitable customers more profitable, or when to stop selling to those customers;
- Capture and store sales information so that if a salesperson leaves your business that information doesn’t walk out the door with him;
- Capture customer information, whether from sales or operations, in a consistent format, therefore making it more readily understood across your organization; and
- Have all of the customers’ information available easily and quickly to every employee who needs access to it.
Once you have gathered pertinent information you can use it to determine which customers are viable prospects for in-person sales calls. “Let’s say you have a customer who is only spending $2,000 a year with you. He likely is in the bottom portion of your 500 customers. However, in your data gathering you find out that he has 20 trucks in his fleet. If you utilize national averages which say that a fleet spends $4,000 per truck per year on parts, that account is spending $80,000 somewhere on parts – just not with you,” Wolver says.
Knowing the purchasing potential of your existing accounts enables your parts manager to deploy resources appropriately. “It allows the parts manager to identify the low hanging fruit and provide the sales staff with viable leads,” he adds.
Your current business system vendor is a good place to start when considering implementing a CRM program. You already have captured some pertinent customer data in your business system and your CRM program can be integrated into it to eliminate double entry of data. Lebel says the most effective CRM programs are those that track all interactions with customers “not only in sales, but in all areas of operations.”
Employee training is vital if your CRM program is going to be successful. “Parts counterpeople in our industry are not necessarily hired because of their sales acumen,” Wolver says. “They are very technically savvy and have a good understanding of trucks and truck parts, but they may not have gone through a rigorous training program that teaches them how to build value to a client or how to deliver a better level of service so they increase the likelihood of closing the sale.”
Therefore, you must see that they are trained properly so that when a potential customer calls asking for the price of an alternator, your inside salesperson won’t just rattle off the price and allow the customer to hang up.
“You have to teach your people to control the conversation,” Wolver says. When your employees are properly trained in customer relationship management, they will take the time to find out who they are talking to and something about the customer’s business, which allows them to tailor solutions to that customer. This makes it more difficult for the customer to shop for price because you will be offering him a unique package, not just a $235 alternator.
“It is not about taking a three minute phone call and turning it into a 10 minute call,” Wolver continues. “It is about getting the data you need to make yourself invaluable to your customers. But if you spent the extra time and closed 80 percent of the customers versus closing 10 percent in the shorter conversation, it would be worth your time. The thing that people complain about most typically is driven by the lack of service or the fact that the salesperson does not understand that the customer is not just looking for price, they are looking for someone who is going to provide the best value to them.”
Taking the time to collect and analyze the data on your customers and prospects allows you to match solutions to their specific needs and makes you more valuable to them.
Another part of an effective CRM program is the follow up after an interaction with a customer. According to Lebel, you should use customer surveys immediately after a customer contact event (parts purchase or repair job) to see how they were treated and if they were satisfied with their interaction with your business. You also can monitor your performance with weekly, monthly or yearly written or online surveys.
But perhaps the clearest indicator of your success will be in the reports you get from your CRM system. “The sales trends and other metrics will tell you if customers are spending more and adding more services,” Lebel says.
Remember that the whole idea of a CRM program is to develop loyal customers. According to Wolver, “If you develop loyal customers, when the economy starts going south you will continue to be known as a premier service provider in your area and you will have a better chance of maintaining your market share.”
If you are not currently using a CRM program, you may want to consider implementing one soon. According to Lebel, failing to have a CRM program or improperly executing one can lead to lost sales and even losing customers and market share to your competition.
The Other 400
While it is impractical to have enough salespeople to make face-to-face sales calls on all of your accounts, you still can reach all your customers on a regular and consistent basis.
Mike Wolver, national director of sales for the trucking industry at Signature Worldwide, says that the trucking industry is one of the few places where direct mail is still effective.
He suggests that you develop a positioning piece that tells your story just the way an outside salesperson would when calling on a customer. After the positioning piece has been mailed, you should follow up with promotional flyers that talk about your sales specials while staying within the same theme of your positioning piece.
In addition, you may want to assign every customer to someone in your organization with the understanding that they contact their customer list once every 90 days. “They do not have to be great salespeople to do this,” Wolver says.
“All they have to say is: ‘This is Jim Smith from ABC Parts & Service just checking to see how you are doing and to make sure you got our last promotional piece. If you didn’t, I will be happy to send it to you. I wanted to point out that we have a sale on clutches this month. If you need any let me know. If not, is there anything else that I can help you with today?'”
He concludes, “You can keep it very simple. The whole idea is to use the personal touch to try to build the relationship with the customer.”