Customer Service


Mining the Customer Base

CRM business success

One of the biases inherent in CRM is its orientation toward new business. This might sound strange to most people, but really, I think of it as the startup echo chamber.

It’s a bias in part because CRM was invented by new companies for new companies. However, the “C” part, customer, involves more than simply acquiring new ones, especially for established companies.

Customers are people who pay money for products and services. If someone uses a product but doesn’t have to pay for it — maybe your company buys it for you — that person is known as a consumer. Prospects can be thought of as incipient customers or people in the process of becoming paying customers, and they are CRM’s sweet spot.

By definition, new or emerging companies don’t have customers or they have few, and their reason for being is to create markets for new products and claim high percentages of them. That’s why I described CRM as invented by and for new companies.

Subscription Culture

Fine, there’s a big market for that. In reality, the larger market for most companies always has been the installed customer base, and that group has been nearly overlooked by CRM.

You may object, saying, “What about customer service?” But customer service orients toward new customers too, as they attempt to become productive with new wares. Once that’s achieved, very often, established customers fade into the file cabinet. At least that’s how it once was.

Today the subscription culture has begun to change all that. Subscription vendors know that they must have long memories about customers and that taking an eye off the ball risks churn and attrition and, eventually, tense board meetings.

The subscription revolution has taught us a lot about how to deal with customers, and it doesn’t involve fading into a file cabinet, even if it is digital. Dealing with customers means having some idea of the customer life cycle so that a business can segment its base to better sell enhancements and upgrades, or possibly just to chat up customers to make sure they’re happy and engaged.

I am often amazed when taking briefings from sales and marketing software companies when I ask about their approaches to the installed base: “How are your products used to productively go after that base?” The response is often a blank stare.

Hidden Revenue Potential

Part of the challenge many businesses share is that their agreements, contracts, whatever, really are in the functional equivalent of a file cabinet, and their contents are inaccessible except through laborious manual examination.

Over time salespeople come and go, and the ones that stay are aimed at hunting for new business and usually not farming the base.

I sense potential for a new field in CRM that goes beyond installed base marketing or customer service. Those efforts are fine and necessary, but they assume a business knows everything about its customers already, when nothing could be further from reality.

Why would this be important? Well, in many instances those documents define the relationship up to and including multiyear plans and rollouts. Virtually every company I know has at some point lost touch with these plans, and there’s a great deal of potential revenue tied up in them.

Digging Through Documents

I was therefore pleasantly surprised and impressed recently when I took a briefing fromPramata. Tracking the contracts and other documents and searching for revenue opportunities is its mission.

Pramata’s customers tend to be large, and their customers might also be sizable. Those organizations are often the ones with lots of contracts squirreled away and enough bureaucracy to keep them away from people, like sales pros, who might be able to do some good with them.

I don’t profess to be a Pramata expert, but I believe its solution involves machine reading the document trove every business has looking for keywords such as dollar amounts and dates and times. For more information, check with the company.

Personally, I can see immediate opportunity in just figuring out what terms and conditions pertain to an agreement and what happens if all options go away at the end. Does the need go? Does the vendor need to reinitiate a negotiation for additional sales? What do the agreements say about how much a service agreement can rise upon renewal? Can we maybe sell another tranche of product before the deal turns into a pumpkin?

Most of these problems didn’t exist when CRM was young, so early vendors didn’t spend a lot of time addressing them. As markets inevitably cool and vendors seek out new revenue opportunities, it makes perfect sense to pay a lot more attention to existing customers. Now, it appears there’s an emerging class of solutions to help the process.

Denis Pombriant

Denis Pombriant is a well-known CRM industry researcher, writer and speaker. His new book, Solve for the Customer, is now available on Amazon. He can be reached at [email protected]. You can also connect with him on Google+.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

CRM Buyer Channels