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Developing a Model of Your Customer Relationship

SFA/CRM applications are designed to improve the speed of acquiring new customers and to achieve the highest amount of revenue or profits from accounts, thereby raising the customer lifetime value. Before you start detailed planning for any SFA/CRM project, you need to develop a model for how your organization works, showing the basic organizational ownership for each stage of the customer cycle. Figure 1-1 depicts the customer cycle, showing how a company converts the initial investment in marketing and sales to a completed, invoiced order. In developing the customer cycle for your company, you’ll need to identify which groups are responsible for each of these stages. Make sure the relevant groups have basic agreement on “who does what” to double-check your model.

Figure 1-1

Figure 1-1 The customer cycle

Note the dashed lines at the qualifying, delivering/servicing, and upselling stages: these lines are meant to indicate where the current customer cycle “breaks”—where conversion or retention ratios tend to be too low, or where organizations squabble and opportunities fall through the cracks. It is very common to have breakage points in these three stages, but every organization is different and you should identify the perceived breakage points for your organization as early as possible in the project.

The right-hand side of the customer cycle is the sales cycle, in which sales and marketing activities generate all your company’s revenues. Because the sales cycle is the principal domain of an SFA/CRM system like SFDC, you’ll need to have a detailed model of what the sales cycle stages are, who “owns” them, how long they take, and what the conversion ratios at each step are expected to be. Figure 1-2 illustrates an example sales cycle for a business-to-business (B2B) direct sales operation.

Figure 1-2

Figure 1-2 The direct B2B sales cycle

(Source: DOTnet Consulting, Inc. and Serious Decisions, Inc.)

The sales cycle may be viewed as a “waterfall” showing the conversion steps for each stage of the cycle. The diagram shows who owns each stage, what the expected conversion ratios are, and how much time each stage takes. Make sure that both sales and marketing executives concur with the basic data and relationships within this waterfall early in the project. Find out which stages represent the biggest problems and where the executives believe the SFA/CRM can help them the most.

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