By 2020, customer experience will outweigh the importance of price and product. Are you investing enough in building relationship with a customer?
This is the first in a new blog series on the role of customer relationships and how Relationship Analytics can improve your key sales and business metrics.
Complex B2B Sales and Customer Relationship
There is a common notion that once you have developed a superior product or service with a strong value prop, you don’t need to invest a whole lot in the sales process. It’s the whole “good products sell themselves” fallacy. Top performing B2B sales leaders and reps don’t buy into this myth, they know very well that going into a deal and simply showcasing a badass demo or offering lower prices than the competition are not good enough to close. This is true especially for B2Bs with a complex sales model.
B2Bs win by building relationships. A relationship based sales approach is not easy, but it is what sets winning companies apart from competitors. In fact, a Gallup study shows that a typical B2B company has optimal relationship with just one in five of its customers. But those fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth.
Let us look at sales scenarios where relationship building has far better returns than other commonly used sales approaches and tactics; or even worse, the absence of sales systems and process.
Often, sales reps rely on cold calling. But stats from various studies clearly suggest that this may not be effective use of the sales leader’s budget or the sales rep’s time. Consider that only 1% of cold calls result in meetings. Or that a staggering 90% of B2B decision makers don’t respond to cold sales outreach. 84% of B2B leaders start their individual buying journeys with referrals. Nearly 3 out of 4 business execs say that they prefer to work with sales professionals who were referred by someone they know.
These stats all mean that sales teams must evolve how they engage with prospects. On the flip side, buyers expect consistent engagement during their journey.
Relationships play a crucial role even with your existing customers. A concerted effort to build relationships improves the lifetime value of your customers – better subscription renewal rates, more referrals, customer advocacy and higher conversions in upsell or cross-sell scenarios.
CRM and Relationship Analytics
Now that we have reiterated the value of customer relationships, you may be asking, “isn’t my CRM meant to help me with relationship building? Especially, when the CRM acronym stands for Customer Relationship Management!” (A fair point).
As a sales leader, you know the effectiveness of a CRM system depends on the quality, accuracy and integrity of your prospect and customer data. At the same time, you want your sales members to focus on sales activities and spend minimal time on CRM data entry or CRM administrative tasks. As a result, CRM data can become incomplete from time-to-time.
Enter a Relationship Analytics solution. Imagine having a software app that will dig out the relationships between your employees in the entire organization and your customers. It doesn’t stop there. The software then automatically enters that relationship data and insights into the CRM system. We will share more details in the next post of the “Building Solid Relationships with Customers” blog series.
CRM is a foundation tool for sales. A Relationship Analytics solution will extend and enhance your core CRM system.
In this post, we talked about why you need to invest in building customer relationships and a sneak preview of Relationship Analytics. In our future posts, we will share more details of an out-of-the-box Relationship Analytics solution for Sugar.