The recruitment of a customer is one thing; the retention of that same customer is another. To regain a customer lost through poor service, product, or account management is, yet, another thing. In general terms, how we treat a customer is very much tied to how profitable that customer is for us in the long term. Insofar as this concerns the connectivity between vendors and their clients, Customer Relationship Management (CRM) is the strategic business and manufacturing practice today that can make or break the loyalty of a customer.

Most CRM in modern manufacturing businesses, large and small, is handled by dedicated software applications, or is a part of larger enterprise resource planning software systems (ERP). When a company does decide that it wants to implement a CRM strategy, it usually takes its direction based upon a conceptual need in customer relations—either general relationship operational management or production/sales force automation.

In either case, there are several specific approaches to CRM that are specific to the type of customer served and their needs as customers. Here are two of the dozens of approaches to CRM in manufacturing:

1) Operational Management: Depending upon the size of the manufacturer, front office people may know the companies they service, and their contact people there, very, very well. If they are astute at CRM, then it’s certain that they do indeed know their customers beyond the basics. Operational CRM supports front office activities including sales generation and orders, customer service (including contact history), certification document processing, and database maintenance.

In short: these are the relationship operations of the business relative to its customers, and vice-versa. Whether the same person in the manufacturing sales/service operation interacts with the same person in the customer office over time, or different employees service the customer in each interaction, the customer information dossier is always and instantly retrievable, giving a more personal impression.

2) Production and Sales Force Automation: Unlike retail operations, where there is more often an indirect route between company purchasing activities and customer activities (i.e., purchasing is a factor strictly of forecasting), job shop and make-to-order manufacturing is driven by the direct sales order. Close tracking processes from sales order generation to work order creation, production, purchasing, quality, and shipping enhances the ability to respond to customer inquiries about status, engineering changes, and delivery.

A robust CRM module in an ERP system should be able to bring all areas of manufacturing operations together in real time data analysis in order to answer customer questions. To automate these CRM processes means to automatically and routinely communicate with customers, hopefully in a proactive modality that anticipates questions and addresses status before it is even asked.

Again, there are several applications of CRM practice; however, some (such as campaign management and analytical CRM) are more closely aligned with marketing than with manufacturing front office and floor operations. No matter the application, the ultimate objectives for CRM are still to gather, store, and disseminate the most comprehensive, detailed, and easily accessible database of new and long-term customer information.

With this, manufacturers can maximize their ability to know their customers, while at the same time formulating marketing approaches taking advantage that relationship. This is the best purpose and use of CRM data, and developing the manufacturer’s knowledge in areas such as identifying customer segments, improving product offerings (by better knowing customer needs), and delivering quality goods on time, will enhance strategic bottomline profits through customer retention.

And, as we all know, it’s much cheaper to retain a loyal customer than it is to regain them once they are lost because of bad service or products.

This entry was posted on Monday, May 26th, 2008 at 9:00 am and is filed under CRM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.