Not fit for purpose

Posted on 8 Feb 2011 by The Manufacturer

A survey of British manufacturers highlights worrying shortcomings in critical aspects of sales and marketing. But it doesn’t have to be that way, says Malcolm Wheatley

As Britain’s manufacturers struggle to recover from the worst recession in 60 years, many of them show disturbing deficiencies in how they interact with their customers.

That’s the worrying conclusion to emerge from a survey undertaken by The Manufacturer in conjunction with Customer Relationship Management (CRM) specialists ConsultCRM.

The bottom line? Customer-specific data that is stored and maintained in a bewildering variety of systems — ranging from spreadsheets to homebrew databases — is acting as a brake on sales and marketing functions.

And as a result, they are operating inefficiently: multiple-rekeying of data is common, senior management time is wasted, and customer issues aren’t being adequately addressed. What’s more, the lack of CRM systems is holding businesses back from proactively marketing themselves to both existing customers and new prospects.

We see more manufacturers harnessing the automation facilities in CRM. A simple example is driving more after-sales revenue through automated email prompts when equipment needs servicing or renewing. Most companies fail on this as they are relying on inadequate manual systems.

Poor performance
In four out of ten manufacturers, for instance — 43%, to be precise — survey respondents considered that inefficiencies in their marketing, sales or customer service functions impaired their business’s effectiveness. Almost two thirds of respondents — 64% — reckoned that senior management within their businesses needed to spend more than a minimal amount of time collating sales forecast information. Worse, almost one in five businesses — 18% — spent what was described as a ‘considerable’ amount of time on the activity.

Likewise, over half of the respondents — 52% — admitted that their companies spent an unacceptable amount of time and effort duplicating data entry, when updating customer records and processing sales/quotes/orders. Just 48% were able to say that the time taken on this was ‘minimal’. In one in ten companies — 10% — the time spent was declared to be ‘a considerable amount’.

Similarly, in only a third of companies — 32% — was the sales team able to spend only a minimal amount of time maintaining the pipeline. In two thirds of companies, the amount was either ‘fair’ or ‘considerable’. And in fully 15% of companies — one in seven — the amount was considerable.

And finally, in just 15% of companies were customer issues and complaints tracked inside a CRM system. Almost one in five companies — 20% — did so through multiple databases. Over half of respondents — 51% — used Excel spreadsheets or in house developed systems, a proportion of which can be assumed to be largely or partly manual in nature.

By far the largest proportion of respondents — 59% — used quality control or returns systems.

But while admittedly a significant step forward from spreadsheets and manual systems, quality and returns systems aren’t appropriate in all instances: not every customer issue is related to product quality, for instance, or involves a physical return.


Opportunity ahead
So what might explain this state of affairs? One clue comes from the fact that just 16% of respondents stored their customer data in a CRM system.

Disturbingly, 25% stored their customer data in either Excel spreadsheets or multiple databases, with a further 18% using in house developed systems. And of the 41% of respondents who replied ‘other’, one third of these said that they actually stored their customer data in a combination of Excel spreadsheets, multiple databases, and in house developed systems — massive duplication, in other words.

“We see a lot of silos of customer information: these findings are worryingly typical,” says Karl Newman, managing director of ConsultCRM. “The result is that each function has its own view of the customer — yet no function has a single, holistic view of the customer.” CRM changes that paradigm — and forcefully so, he adds: “Think of CRM as a customer portal, where every piece of customer-specific data comes together in one place, offering a single view of the customer.” Efficiency is an obvious win. 70% of survey respondents with a CRM system, for instance, reported spending only a minimal amount of time of data entry when processing orders and quotes. Similarly, 70% of survey respondents with a CRM system were able to report that inefficiencies in their marketing, sales or customer service functions were not impacting their business’s effectiveness.

But the real gains lie elsewhere, suggests Newman. “The relationship with the customer is transformed,” he enthuses.

“You’re able to serve customers better — but also offer them products and services that they haven’t bought, but which they might need.” “Marketing through e-mails, letters or targeted phone calls is enhanced by an ability to automatically tailor the offering to individual customer profiles, which is something that marketing departments have found tricky in the past. But with CRM, it’s straightforward.”


That said, CRM is still relatively new, notes Newman. Around for just over a decade, it’s yet to become mainstream, especially with small to midsize manufacturers. But a growing number of ERP systems — including Microsoft Dynamics AX — now offer sophisticated CRM capabilities, and offer them fully integrated with every other relevant aspect of an ERP suite — sales administration, finance, logistics and quality, for example.

“We tend to spend a lot of time educating manufacturers as to what exactly CRM is, and how it can help them,” he sums up.

“When they find out, it’s often quite a revelation.” And a free Microsoft seminar — CRM for Manufacturers — aims to continue that education process. It’s being held on March 16th 2011 at the National Motorcycle Museum in Birmingham.