We build a lot of customer satisfaction into our dealings using the early indicators. The measure is revenue, but the indicators are usually not revenue. By the time revenue is affected it’s after the fact.

We try to integrate something for our clients – either their customer support or their service organization. There are a series of things that encourage a customer to continue to do business, and we use those events, complaints, and applications as customer satisfaction scorecards They are indicators of the health, happiness, and satisfaction of a customer that may continue to do business with our clients and therefore have the implied loyalty that accompanies customer satisfaction. People buy from people who have done well by them in the past, so we encourage our clients to use the events to ensure that their customers are delighted with their products and services.

We check for numbers of incidents, how long it takes to resolve complaints or returns, maintenance renewals, and a whole series of indicators that are part of the customer support and service organization. They are generally what we try to implement to ensure satisfaction and to provide early-indicator measurement methodologies and growth. So if our client wants to encourage its customers to continue to buy from it, it will want a certain level of customer satisfaction to be maintained.

We usually say to customers that CRM provides three important things for their business. Normally customers think sequentially: (1) acquisition, (2) development strategy (usually they don’t even know what their development strategy is), and (3) retention.

We work backward for our CRM implementation. The first step in our CRM life cycle is never lose the customers we have. The second step is to ask, “What is our strategy now for developing the customers we already have?” The 80/20 rule says that 20 percent of them drive 80 percent of the revenue. We never want to lose that 20 percent. The other 80 percent fall into buckets of marginally profitable all the way to, perhaps, unprofitable. Our approach is to help our customers understand the demographics so they can leverage this customer information as a competitive differentiator. We help them develop a strategy to move customers from one profitability category to another through a series of planned actions. We help them to encourage customers in specific categories to improve their loyalty and therefore encourage more product purchasing through a series of loyalty building events. Our CRM application is then used to track these events and results so they can see the results of their activities and strategies. We use customer satisfaction as a key “early indicator” of customer loyalty and therefore buying behavior improvement. We ask our customers questions like: what kind of satisfaction, what kind of service, and what kind of products do we need to offer them as enticements in order to move them from one level of profitability to that 20 percent at the other end?

In the third stage, we compare customers to our demographics: Which customers do I want to attract? Who is in my profitable mix, and how do I find more of these for the customer acquisition phase?

We usually take customers through this process because the instant benefit in CRM is often, initially, customer retention. This provides the initial ROI that meets the customers’ objective and does not require them to find new customers, just leverage the relationships they already have in a more competitive fashion.

Identifying which customers are profitable and which are unprofitable allows us to help the CRM customer focus on their high priority issues and customers first. We ask our CRM customers to review their customer turnover rate: what percentage of their customers continues to be loyal, and how many of them are lost every year? It is also critical to understand how they measure each of the items above because, in some cases, the business is using “false indicators” of loyalty. Oftentimes businesses are not leveraging all of the information within their entire business to really understand a customers’ true satisfaction and loyalty – this is our goal with every CRM installation.

Often a company has only measured revenue (for satisfaction) and may have done some surveys. We integrate all of this information along with complaint, return, and customer support requests to get a “true indicator” of customer satisfaction and loyalty. We know this customer may have bought a thousand dollars worth of product from our client, but it also calls the support line a thousand times per year. We show that information graphically which allows our customers to see the revenue in relationship to cost and support.

Of course we review this with our customers and frankly most of them know the demographics in terms of certain points like “I’m looking for people between the ages of 35 and 40 who are married with two kids” – they know those kinds of demographics. What they don’t know is beyond the simple revenue statement. Sometimes they haven’t integrated all the other things within a business that would give those indicators – for example, they may not realize they have another set of profitable customers: the people between 20 and 25 who don’t call the support center as much. They may or may not be as loyal, so we try to indicate a repeat buying pattern to show them and integrate all different aspects of the organization so our client can see not only how much revenue it is spending, but also how much time and effort it is spending in the implementation and customer support areas