Customer Service

Warrantech Corporation

Guide to Managing Customer Relationships

Increase revenue by caring for your existing customers
By Donna Fenn

Your best source of additional revenue is the customers who are already doing business with you. Learn how to better serve them and you'll spare yourself the trouble and expense of constantly trolling for new prospects. Manage these relationships wisely and you'll be able to:

1. Track the buying habits of your customers
2. Detect trends so that you can tweak your products or services accordingly
3. Decrease sales and marketing costs
4. Increase customer retention

Action Steps

The best contacts and resources to help you get it done

Invest in technology to help manage your customer database CRM software can help you keep track of customer buying habits, cross sell more effectively, and target your marketing dollars. And costs have come down in recent years as more vendors focus on the small- and midsize-business market.

I recommend:  Comparison shop with this list of the top 12 CRM software packages. See destinationCRM for some guidelines on choosing the right system. For a CRM software primer, got to SmallBizCRM and read up on the difference between hosted and traditional CRM software. At BuyerZone, you can get free software quotes. Finally, click here for a list of free CRM software (for single users).

Create a loyalty program to reward your best customers All customers are not created equal. Once you've identified your best customers, pamper them with special offers, exclusive discounts and personal communication.

I recommend:  For ideas on how to create specific kinds of programs, go to Microsoft's Small Business Center and Business Know-How.

Communicate frequently and meaningfully with customers Keep your company's name on your customers' radar screens by sending out newsy emails or newsletters about your company. Selling is secondary here; the main goal is to keep in touch.

I recommend:  If you can't manage frequent email blasts in house, check out Constant Contact, an email marketing company that caters to small businesses. For $15 a month, you can send out unlimited emails to up to 500 contacts. Or visit Vertical Response, another email marketing company that boasts low prices.

Develop a consistent policy for solving customers' problems You can have the best customer service policies in the world, but once in a while, you're going to make mistakes. How you deal with them is the true test of your mettle.

I recommend:  Create a written "service recovery" policy and distribute it to all employees, empowering them to assuage angry customers in a consistent and predictable way. For some good guidelines, go to The Small Business Advocate and The CEO Refresher.

Teach your employees about the lifetime value of a customer All of your CRM efforts will be for naught if you aren't also teaching your employees about the value of great service and empowering them to deliver it.

I recommend:  Go to CRMGuru to read about the employee/service connection.

Measure the effect of customer relationship management You need to know which efforts are generating increased revenue, motivating employees, and delighting customers.

I recommend:  For tips on measuring CRM, read these articles on CRM Guru and CRM Knowledge Base.

Tips & Tactics

Helpful advice for making the most of this Guide

• When you invest in CRM software, don't overspend on technology you don't need, but make sure that whatever system you choose is scalable as your business grows.
• When communicating with customers, don't always default to email; there's also huge value in a hand-written note.
• Keep all customer information you gather absolutely confidential and make sure customers know you're protecting their privacy.
• Remember that you can't expect your employees to treat your customers any better than you treat them!