CRM for manufacturing companies
If the much trumpeted “March of the makers” is to play its part in driving economic recovery, then finding buyers for manufactured product is essential. Making on its own will not drive economic growth –it will only come when those goods are sold. Customer Relationship Management for manufacturing (CRM) could be the difference between success and failure,but manufacturing companies are very different to other industries. What works in the financial services sector doesn’t always work for the engineers, fabricators and component suppliers that drive manufacturing.
Growing Manufacturing Sales
Following the recession, confidence is returning to certain sectors. Consumers are once again hitting the high street and low interest rates are encouraging some growth in capital projects. After some lean years, demand in the economy is building. If, as a manufacturer, you want to claim your “bit of the pie” then now is the time. Unfortunately, others are looking at the same customers you are. They will do everything in their power to take your business – and to take your customers.
Fighting back is not just about the cost of goods. A race to the bottom will not drive growth. Before dropping your prices to compete, look at the other weapons in your arsenal. Low cost foreign imports rarely come with the customer service that a local provider can give. Often they are ill equipped to provide Just In Time (JIT) delivery services. Essentially, they rarely have the local feet on the street. Customer relationships are a key determinant of why the customer buys. CRM systems can give you an unfair advantage.
Manufacturing Customer Relationships
Think of the process flows and production modelling techniques you use to drive your manufacturing processes. When was that amount of time, effort and brainpower applied to your sales processes? For most manufacturers, the answer is “never”. Sales are the forgotten department. Despite occasional complaints about the cost of the sales team, they don’t get the forensic attention that they need. KAIZAN and Lean manufacturing have revolutionised production, but sales are often doing the same things they did in bad old days of British manufacturing.Implementing a CRM system would mean exposing them to that same level of scrutiny.
Start with the basics
“Who is the customer?” Not just the list of companies you sell to, but who in those companies actually makes the purchasing decisions?
“What do they buy?” Beyond specifications, what motivates them to buy? Why would they buy one product over another?
“How do they buy?” What are the procurement processes? Can you help them with their procurement?
“How do they find out about new products?”
“How do they go from Never a Customer to Always a Customer?”
Just understanding these, and other key questions, will help you identify your customer and the relationships they need to have with their suppliers. CRM software then provides the tools to help you manage the relationship in ways that work for you and your customers.
Armed with this understanding you are in a better position to refine your processes for competitive advantage. With improved understanding, you can improve production forecasting. This potentially reduces your inventory costs and transport costs. It can improve cash flow and provide a timely warning of possible spikes in demand. CRM has been shown to improve profitability and reduce customer churn. Put like that – what’s not to like?
Taking the first step
Often, manufacturing companies will look to the provider of their ERP systems to provide a CRM solution. In some cases this makes good sense; however, in many cases it fails. The problem with ERP companies that implement CRM functionality is that they just don’t understand how sales people work. They attempt to apply analytic disciplines to processes that are intuitive, not structured.
Independent CRM vendors create products that meet these needs. Instead of bending your sales and marketing processes to fit with a model developed by an ERP vendor, they provide customisable off the shelf Manufacturing CRM's that builds a system that works - for you and the customer. They have the experience to help you understand sales processes. Often they provide experience gained in delivering successful CRM projects for other manufacturers.
CRM is a competitive market. Just as you have to earn your orders, look for CRM providers that are keen to earn your business. Will they come to your plant to demonstrate how they can help you? Do they have other customers in your sector? Are they of a size that means you will be able to manage them, or will they attempt to manage you? Selecting the right CRM partner is an important step to claiming your place on the “March of the makers.”
Paul Pitman has been a passionate advocate of CRM for over 20 years and currently works for the prestigious Independent CRM Consultancy, Collier Pickard. Today he uses that experience of implementing hundreds of CRM systems to help organisations avoid potentially expensive pitfalls. With an approach that is defiantly business focused, he believes technology needs to be refocused to drive customer satisfaction in new ways. His background as a Sales Director with major UK and international software companies helps him understand the issues faced by fellow sales and marketing professionals.