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.

Actively seek customer feedback

I know, asking for feedback feels as stupid as asking for a smack in the face. Unfortunately there is no better way to find out what you are doing well, what you are doing poorly and what you should be doing. You'll be surprised at the results.

Firstly, my 'top 10 list' (11 actually) for customer feedback:

1. Do it personally - Either in-person or over the phone.
2. Talk to all types of customers - active customers, lost customers and dead sales leads.
3. Use structured questions and write down the answers - You need hard data.
4. Prepare for each customer call - sales, support calls, complaints, etc. in the period.
5. Cover off on all aspects of your business - don't just focus on your core product/service.
6. Do it regularly - Annually at a minimum.
7. Summarise and analyse the results - A quick report is best.
8. Compare your performance with previous rounds - you need a sanity check.
9. Provide feedback to your customers on the results - good/bad, doesn't matter, do it.
10. Change the way you do business as a result - that's the whole point!
11. Do it on an adhoc basis as well - as soon as you lose a customer or a lead, find out why.

1. Do it personally
I'm amazed at the number of times you get a phone call from someone, just after you get off the phone with a service desk, asking for your feedback on 'your experience with our service desk'. This person is usually disinterested, desperate to get of the phone as quickly as possible and uncomfortable when you start going into too much detail. They are never in a position of authority in the company. You'll be surprised at the response you get if you call one of your customers and say "Good morning, my name is X, I am the Managing Director of Y and I am calling to seek your feedback on my company's performance". Don't offload this to your administrative support staff (fight the urge) - it just isn't as effective. Don't send out a form and ask your customers to complete it (unless they specifically ask for one). The response rate will be terrible and you will get a biased view of your performance (as only seriously unhappy or bored customers will respond). If possible, have a face-to-face meeting with your bigger customers and only use the phone where it isn't practical to visit them. Of course if you're running a lolly shop, scale down your whole approach accordingly :-).

2. Talk to all types of customers
Its tempting to only call your current/loyal customers. In general, they will definitely have nicer things to say than a recently lost customer or someone who decided to 'go with the opposition'. However, some of the most valuable information will come from lost leads and recently lost customers. Perhaps start with a few of your current customers (to get into the swing of things), move on to the lost leads and lost customers and then finish with the remainder of your current customers. Pace yourself, this is tiring business.

3. Use structured questions and write down the answers
You need a plan. A consistent way of approaching each customer. Its amazing how side tracked you can get when, in response to you introducing the reason for your call, the first thing the customer says is "You're not going to like what I have to say!". I have developed 3 different sets of questions on separate forms for each customer type (as per point 2). I use a Microsoft Word form so I can type their answers directly (my handwriting is atrocious). If you don't write it down, you will forget something. The customer's don't mind the formality (they may even expect it). They appreciate what you are trying to do and will give you time to write down their responses and find your next question. I use a telephone headset (borrowed from our service desk team) as it leaves my hands free to type or write things down.

4. Prepare for each customer call
Before you actually make contact with a customer, get together your 'experiences' with that customer in the report period (usually the last 12 months). You will need products/services used, sales figures, details of support calls, customer complaints and, if you keep them, details of all contacts with them (I mean phone calls, meetings, e-mails... everything - from any of your staff to/from any of their staff) in the period. If you don't have all of these items (or any of them for that matter!) prepare yourself mentally as it will be like riding a roller-coaster with your eyes closed.
Note: You should probably think about setting up a customers list (see Setup a customers list) and a contacts register (see Track all contacts with customers and suppliers) if you don't have all of the listed items for every customer.

5. Cover off on all aspects of your business
You will be tempted to focus on your core products and/or services. These are important, however you may have problems in your accounts department (ie. your wife/husband!), with your fax/e-mail service or staff professionalism/appearance that you don't know about. Have some structured questions about these secondary aspects, but also have some open-ended questions to catch any feedback that you were perhaps not expecting.

6. Do it regularly
I suggest annually. Honestly, I just don't have the energy to do it any more frequently than that. However, if you want to do it quarterly, go for it. Just make sure you have time to actually change things before you speak with the same customer again. I must clarify that, by regularly, I mean how often you do a customer-wide feedback gathering exercise. Any time you lose a customer, lose a lead or receive a complaint, you should kick off a formal feedback session with that client to ensure you have all of the relevant information.

7. Summarise and analyse the results
At a minimum, make sure you actually read through all of the responses and digest the information presented. Next best thing to do is give the information to someone slightly removed from the business (eg. your wife/husband) and get them to highlight anything they think is significant. By far the best way to summarise the results is to put together a quick summary report. The report should provide a main section for each area (ie. Products, Accounts, etc.) and have a sub-section for each question. Each question's results should be graphed or summarised somehow with a brief summation of overall performance eg. In terms of product X, our customers are generally satisfied. Each question should also provide an action plan in response to the results eg. As a result of this feedback aspect X of product Y shall be redeveloped in the next period.

8. Compare your performance with previous rounds
You need to firstly make sure that anything that has been working well, and received positive feedback in the past, is still working well. Hopefully this will be the case, but if performance drops, look at anything you've changed since the last round of feedback and see if it has caused a a drop in customer satisfaction in this area. Sometimes you'll make a change for one reason but inadvertently create a problem in another area. This is also a good sanity check to see if the changes you made to address unacceptable performance in a previous round has solved the problem.

9. Provide feedback to your customers on the results
Ok this is on par (in terms of pain) with actively seeking customer feedback in the first place. Firstly, everything must be de-identified, generalised and preferrably this feedback should be provided verbally (to minimise the possibility of this information getting into the 'wrong hands'). On the upside, it will demonstrate to any disgruntled customers that they are the exception rather than the rule. On the down-side, you will be openly presenting problems with your business. This actually demonstrates integrity and loyalty to your customers. They will thank-you for it with their loyalty in return. As long as you move on to 10 (below).

10. Change the way you do business as a result
The whole concept of seeking customer feedback is to improve your business for the purpose of strengthening current customer loyalty, improving customer retention and improving your ability to transform leads into sales. This means that you will actually have to change some aspects of your business to get any return on investment from the customer feedback process (which can be quite time consuming = costly for you). Hopefully you're generally doing ok but just need to work on some aspects. Alternatively, if the outcome is a general consensus that you're hopeless, perhaps its time to review your business in more detail.

11. Do it on an ad hoc basis as well
Here's an example why. I recently hired a lawn-mower-guy to mow the grass, trim the hedges, do the weeding, etc. He had a pretty good service model whereby you pay a fixed monthly fee and you received 2 mows, 1 hedge trim, 1 weeding and 1 fertilising each month. The first month was fantastic. The yard never looked better. However, in the second month, he only mowed once and I didn't see him again that month. Yet, sure enough I received the standard full monthly fee. I immediately called and said that I didn't need him anymore, however he didn't ask why, and I didn't explain. If only he'd asked, perhaps he would have realised that he'd lost me as a customer as a direct result of his inability to deliver on his brand promise. I wonder how many other customers he's lost as a result of the same thing? He'll never know.

In general, I find that I expect worse feedback that we actually get. As I know how the 'machine' is operating behind the scenes, I think the customers will see through our customer service approach. This is always a pleasant surprise. However, without fail, I learn something about my business that I didn't know before. Sometimes it is an area for future growth (eg. a new product or service that my customers are crying out for) and sometimes it is an unexpected acceptance by my customers of something I'd thought they'd all hate (eg. increased pricing, or reduced services to remote customers). But the point is that I'd never had known if I hadn't asked.

I hope this has helped you understand the importance of implementing and maintaining a formal customer feedback process within your company. If it has, please drop me a quick note. If not, please let me know why and feel free to disagree with post.