With more than half of U.S. manufacturers adding services to their business portfolios, it may seem like a no-brainer for your company to do the same and capture downstream opportunities for additional revenue. However, before you take the plunge, make sure your company is positioned to meet the new customer expectations and demands that will result from your service offerings; and that you can capture the data needed to truly understand what services add value for customers.
Why services, why now?
Manufacturers are adding services to their portfolios for additional revenue, protection against seasonality, higher profitability, brand differentiation and customer demand. But, becoming a service provider can be tricky for manufacturers. For example, the service business is more complex than product manufacturing, with more unpredictable and varied demands. The speed at which it operates also is faster, with customers expecting more immediate responses and higher levels of customer service.
One area where some manufacturers make mistakes in adding services is failing to take a customer-centric approach. In this context, customer-centric, means taking an outside-in approach to business and basing business decisions on the wants and needs of customers, rather than the wants and needs of the business. This viewpoint is critical for manufacturers to succeed with services, because not only must they understand where service opportunities occur in the product/customer lifecycle, but also what is the perceived value of these services to the customer — not to the CEO or the head of sales.
To engender a more customer service-focused organization, a shift needs to happen culturally, organizationally, and technologically. It’s not an easy change, and it typically involves employee training, perhaps reorganization of departments, and also investment in technology to provide employees with the information they need to better support customers.
How CRM supports the transition to a service business model
Customer relationship management technology (CRM) is critical for manufacturers that want to add services. When it’s used company-wide, CRM makes it possible to collect customer data from all channels and touch points, so that a manufacturer can better understand its customers and the customer lifecycle. A manufacturer can then use this data to help shape its development of services. CRM also links sales, marketing and customer service teams, so manufacturers can serve customers better, faster and more consistently over the span of the customer relationship.
Most importantly, using CRM to collect customer data can help manufacturers anticipate customers’ needs, creating selling opportunities for products and services, as well as opportunities to provide insights and information that are key to nurturing long-term customer relationships and growing customer lifetime value.
However, in today’s market, not all CRM systems are created equal, and manufacturers need to be as informed as possible when selecting a new solution. Below five factors to keep in mind when narrowing down the search and picking the right partner to help you better connect:
- Mobile is a priority. Check available mobile features, integration capabilities with your systems and applications and social networking services and systems. Compare features vs. pricing to ensure you are getting the most usable solution for your money. Being able to access information from anywhere, at any time, is non-negotiable in this day and age.
- Avoid flashy features. Surprisingly, a CRM system with too many features is actually a bad thing. Most salespeople don’t want to be overwhelmed by their tools, they want easy access to usable tools and information that gets them closer to the sale faster.
- Who is this going to benefit? Is it good for your company, or good for the customer? It should be good for both. A CRM system's purpose is to improve the work lives of your employees through simplification and automation, while improving the customer experience through better, faster service.
- Make sure your CRM strategy aligns with company goals. This important project needs to be implemented like an ongoing journey, with a highly experienced IT leader at the helm, executive buy in and alignment with company strategy. It’s a good idea for all the groups that will be using the system to outline its near-term and long-term goals so that the most important of them can be addressed. Ideally, the solution you choose will be with your company for the long haul, scaling with your growth and expanding with your needs.
- Always keep your users in mind. Your CRM capabilities and employee training should change as your customer needs change, and as technology advances. Internal promotion with executive backing will help with employee buy in. Also, make sure the new system is modern and user friendly to keep people engaged.
Jason Rushforth is Vice President & General Manager of Infor’s Marketing and CRM Group.