Track all contacts with customers and suppliers

The purpose of this system is to keep a record of your contacts/experiences with each customer/supplier. Use a diary, Word document, Excel spreadsheet, database, I don't mind... just make sure it's easy for you to use and easy to review afterwards.

Tracking your suppliers

Anytime you call or visit them or engage their services, make a dated note of their performance. Nothing to advanced, just private notes to yourself such as "excellent and prompt advice", "avoid Julie, she's rude and grumpy", "never have a stock of those pens I like" or "really not very knowledgeable about tax minimisation strategies".

Tracking your customers

Anytime you call or visit them or they buy a product or engage your services, make a dated note of what was provided and how the transaction progressed. Nothing to advanced, just private notes to yourself such as "easy sale", "slow accounts department", "although they bought product X, these guys are probably better suited to product Y" or "would be a perfect customer for Y if we ever start providing Y".

Why track them?

There are quite a few reasons to document contacts with your suppliers/customers. Here are a few examples:

• You need to be able to review your perceptions of your suppliers when you are assessing whether or not to keep them as a supplier (see Performance manage their suppliers)
• You need to be able to review your knowledge of customers when you gathering customer feedback (see Actively seek customer feedback)
• You need to be able to assess your customers as leads for future business (see Setup a customers list)
• Your staff members are unlikely to be with you forever. You need to keep detailed information about your customers outside of your employee's heads.

Don't implement a CRM system

I'm referring to a full-blown customer relationship management system (referred to by most as a CRM).
Although I am a great believer and user of CRMs, I feel that you need 12-months using a simpler system (see Setup a customers list) before you invest in one. CRMs usually cost anything from AU$250 up to tens of thousands. Long before a CRM will deliver value, a simple customers list and tracking system (see Track all contacts with customers and suppliers) will give you positive ROI almost immediately. You can always migrate your customer data to a CRM at a later date.
There is just too much functionality in a CRM which can be quite daunting for anyone; even a technology-savvy person can struggle - trust me I know! I liken it to your first carpentry project, a saw-horse perhaps, when you need to draw a quick plan... AutoCAD is definitely overkill here. Perhaps after a few projects, once you are familiar and comfortable with the tools and techniques of the trade, you could start with a simple drawing program to 'assist' you to develop a plan that gives you access to features that you'll actually use. Going from nothing to a complete CRM implementation is overkill for an SME. You just won't get immediate value, and it is likely to negatively impact your ability to add to, or access, your customer data.
I'm suggesting that you should steering clear of a formal CRM initially. Feel free to trial one of the basic systems once you have setup your customers list and it has started providing some value. There's no point making the commitment to a formal CRM unless you get the process-side sorted out first.

When I refer to the 'cost' of the CRM, I'm referring more specifically to the time cost to learn the product rather than the dollar-cost of the CRM itself. Some vendors are even offering their systems for free (see New Breed Of CRM Software Designed For SME’s). I've spent hundreds of hours adding custom fields, developing custom reports and browsing the data in our CRM system and haven't spent a cent.

So when should you make the leap over to a CRM? Once your Excel spreadsheets, Word documents and notebooks start becoming unwieldy and making it difficult to follow-up leads and conduct customer surveys, you know you're ready for a formal CRM. Although not an exact science, I'd suggest once you've got more than 50 customers and/or more than 200 leads, the time commitment of a CRM will be worth it. Personally I've got around 50 customers and have 400+ leads in our CRM. I can now run a search for all customers who've not made a purchase in the past six months and generate a spreadsheet with their contact details in less than 5 minutes. This would have taken me hours if we'd still been using a simple customers list. However, when we only had 10 customers and 50 leads (and used an Excel customers list), it was pretty easy to scan the list and generate a targetted marketing lists in less than hour.
There are hundreds of functions I still don't use in our CRM, but the few I do use are well worth the time investment to get the system started and keep the data maintained. We also keep invoices in our CRM, duplicating our accounting system data to some extent, but this means I can run reports based on sales revenue; very handy.

Setup non-customers lists

Once you've setup your customers list (see Setup a customers list) you'll need to make a few more related lists. This are very similar to your non-suppliers lists (see Setup non-suppliers lists).

Same columns as the customer list, but with an additional column for notes/reasons. Make three of them; one for potential customers, one for lost leads and one for rejected customers. Anytime you talk to a potential customer, add them to the 'Potential customers' list and include any comments you like next to them eg. "look to be leaning towards us" or "probably better off with for this, but are a perfect lead for our product Y".

When a customer actually engages you, move them over to your 'Customers' list. If they decide to use someone else, move them to the 'Lost leads' list and include a reason why they went with someone else eg. "didn't end up purchasing anything" or " because of their industry reputation". How do you know what they've decided to do? Simple: call them and ask. If they haven't made a decision yet, ask for their permission to call them again and agree on a timeframe. Then call them when you said you would. This also gives you a good opportunity to find out if they have any questions/concerns that you can address to assist them with their decision-making.

The last list is for 'rejected customers'. Yes, I'm serious, these are the customers that you don't want to do business with (foreign thought for most of us!). There are many reasons, but the important thing at this stage is to know that it is bad business to supply your products/services to every single company/person who is in your target market. There is always at least one company/person in your target market who is not suited to you. You are never that desperate for work that you need to sell to these folks; even if they want to buy from you. Not sold? Ok, you can leave this list alone... for now... but it'll be back.

Setup a customers list

This post relates to SMEs who can answer "Yes" to all (or nearly all) of the following questions:

1. I have products/services that are rarely sold without some sales effort
2. It is logical, to me, that my customers maintain an ongoing relationship with me
3. My customers could benefit from 2 or more of my products/services which are not always purchased together
4. Related areas of business exist for which I have a business partner that I refer customers to or that I could consider moving into myself (it should be hard to answer "No" to this one).

If you answered "No" to any of the above questions, it is less likely that you'll get a positive Return On your Investment (ROI) from following this post. The more "No's", the worse your ROI will be. I'm not saying there won't be some value; its just not as beneficial to you as it would be to other SMEs. Maintaining a list of everyone who has ever bought something from you, is of minimal value. I am suggesting that a customers list is extremely valuable where you have an ongoing relationship with your customers or you could possibly sell something else to a customer in the future. This is not just a marketing list that you send flyers to on an annual basis; it is so much more...

The actual list

A good starting point is a Word document or Excel spreadsheet (again I recommend making the leap over to Excel because you can turn on sorting and filtering - my favourite, easy-to-use Excel feature). The important things that you'll want to include about each customer are as follows:

• Customer type - what industry (or target market) they're in
• Customer company name (if not an individual)
• Key customer contact name
• Address - physical
• Address - postal
• Phone number - Office
• Fax number - Office
• Phone number - Key contact
• Mobile number - Key contact
• Date of first purchase
• Date of last purchase
• Date of first contact
• Key contact name - within your company

Why keep a list?

So what's the point? Assuming your following a basic sales process...

• For every 10 people you talk to about your business, 1 will become a prospect/lead
• For every 10 prospects/leads, 1 will be converted to a sale.

That's 100 people you need to talk to to get a sale. Even if this is exaggerated by a factor of 10 for your industry (probably unlikely), that's still 10 people that you've spent time with to get just 1 sale. You've already convinced each one of your current customers that you are/were the right person for the job. You know they have made the "buy" decision once already. This means that they have probably talked to at least 2 other suppliers (ie. your competitors) and chosen you. If you have another product/service that targets their needs and they have the appropriate authority/funding/desire, all you need to do is communicate with them. The probability that they will buy, or at a minimum be the 1 out of 10 people that becomes a prospect is very high.

Why not just wait for them to remember you next time they need a similar product/service? The reality is, they may not remember you at all. Depending on the size of the previous purchase and time since it occurred, they may have made numerous other purchases or you may have moved into an area that you didn't service when they last talked to you. So its up to you to use and reuse your customers list to find likely prospects (rather than cold-calling) and communicate to your customers the current status of your business.... that you're still in business for one, but more importantly what else you have that they may want or what else they need they you would consider providing.

Another reason to setup a customers list is to support your customer feedback process which frankly doesn't work very well unless you have an up-to-date customers list (see Actively seek customer feedback). Combined with some basic sales information from your invoicing system (or shoe-box), a customers list with a contact register will give you the makings of quite an effective customer feedback system.

Related posts:

• Not implement a CRM system
• Track all contacts with customers and suppliers
• Setup non-customers lists.