The competitive marketplace makes it important to focus on customer retention and up-selling.
But some organizations are falling short due to poor communication among business channels, according to Richard Snow, author of the recent report
Challenges in Managing the Customer Life Cycle: Maximizing Long-Term Revenue for the Subscription-Based Business.
"Customers aren't getting consistent information," said Snow, vice president and research director at the San Ramon, Calif.-based Ventana Research. "There's a huge problem in bringing together customer information through all the channels ... and without that there's not a solid foundation for engaging customers."
Snow's report also touches on the four stages of the customer life cycle -- attracting, converting, retaining and churning -- as well as the growing popularity of subscription-based services over one-time sales.
SearchCRM.com caught up with Snow to talk about his research and what organizations can do to improve communication among channels and retain customers.
You mention that retaining customers is the most complex stage of the customer lifecycle. What can be done to streamline this task across multiple business departments?
"Share information," Snow said. "The first step is sharing information through technology."
The maturity of an organization tends to dictate the type of technology used for sharing information among departments, he said. For smaller and younger organizations, the technology can be as simple as logging customer information into a shared PowerPoint, Excel sheet or SharePoint site, although those options do have drawbacks, he said. "The problem with just having a pure PowerPoint or SharePoint is that people play with it, and in the end no one's sure who's got the master."
More mature companies can use collaborative tools such as Salesforce Chatter to share customer information among departments and employees, Snow said. Tools such as Chatter are now available in the cloud, making them affordable, he said.
Your research shows that only 31% of businesses have a single set of customer reports and analysis. Why is that problematic for CRM?
"You're running on a limited view of the customer. The more limited it is, the more narrow the information you've got to drive your decisions," Snow said. "For example, I was working with a nonprofit organization in the UK that had ten different lines of business. I did an audit and asked people where they got their information. ... Every single one of them had a different view."
More on the customer lifecycle
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It turned out, Snow said, that one department was paying benefits to customers, while another department was chasing the same customers for unpaid bills. "As a customer, I don't know, really, where I stand, and that's not a good experience." Moreover, customers are recognizing this breakdown in communication and using it to their advantage. They might contact four different call centers knowing that eventually, someone will give them a better deal. "Customers will hop across channels until they get the best answer," he said.
Why are subscription-based services growing in popularity?
"The driver is tough economic times," Snow said. "I have to get the maximum amount of money out of my customer database." Selling to existing customers, as is often the case with subscription services, is easier than finding new ones. And subscription-based services ensure a long-term relationship with a customer, he said.
But you point out that subscription-based services are more complex than one-time sales. What can organizations do to manage that complexity?
"Fundamentally, you need to have a system that is going to allow you to manage that technology," he said. The system must be able to manage the complexity of various customer options, such as tiers and bundle packages. It must be able to keep track of various fees, including sign-on fees, monthly fees and usage fees. But the system also has to be simple for employees to use, he said.
This was first published in March 2013