You've probably already heard of the Pareto principle (also known as the 80-20 rule), which states that 80% of your revenue comes from just 20% of your customers. Let’s face it, the vast majority of companies rely on a minority of their customers.
In fact, even within that large customer base of 80%, there are customers who are costing your company money. That’s why it’s important to use your CRM tool to determine the value of each customer. Based on the customer value You can decide how best to approach the customer next.
What does "customer value" mean?
Customer value is usually defined as the financial value, ”the net present value of a customer over the entire lifetime of the customer’s relationship with the company.” (from the book CRM in Practice, Sjors van Leeuwen)
But customer value obviously implies much more than just financial value. It’s also about customer satisfaction and loyalty of the customer. To what extent are they willing to recommend your company to family and friends? Do they share positive experiences with your services on social media? …
How do you track customer value in your CRM tool?
1. By identifying segments
You can have a perfectly decorated CRM Having a tool is only useful if you target the right customers and/or segments.
Curry's Pyramid is a simple tool for grouping your customers into categories based on customer value and segmenting your customer base by revenue. Jay Curry bases its customer pyramid on the Pareto principle (see above). The top 1% constitute the A customers; the next 4% constitute the B customers; the next 15% constitute the C customers; the remaining 80% are D customers or inactive customers.
Once the segmentation has been determined for each account, you can enter it in Microsoft Dynamics 365 (CRM). This allows you to tailor your approach to each customer category. For example, you can adjust the number of customer visits accordingly. You can choose to visit your A customers 10 times a year, your B customers 5 times, and so on. .
2. By gathering more than just business information
In addition to the business information, try to find out what the customer's interests and needs, and also whether he or she is satisfied with your products and services. You can do this, for example, by creating a customer satisfaction survey to implement. For example, Microsoft Dynamics 365 includes ‘’Voice of the Customer Surveys". This allows you to create and send surveys to your customers directly from your CRM environment. Based on the survey responses—which are automatically saved in the customer records within Dynamics 365—you can quickly and clearly see whether any specific actions need to be taken.
3. By identifying both revenues and costs
Companies usually know how much revenue a customer generates for them, but they don't always have a clear and detailed understanding of what the customer brings them cost. To a comprehensive view of customer value To have, you must ...and also identify the costs. This is the sum of the factors of production plus all costs associated with all activities performed.
With the profit and loss reports in Microsoft Dynamics 365 (CRM) or Power BI For example, you can clearly see how much revenue a customer generates for you and how much they cost you.
How can you optimize customer value?
If you know the value of each customer, you can tailor your approach to that customer based on that value. Furthermore, if you determine that you’re missing out on potential, you can take steps to optimize customer value. For example, by up-selling & cross-selling.
Optimizing the value of your customers means not only increasing revenue, but also analyzing customer behavior and explore ways to reduce costs. Take a look at the profiles of your top customers and find similar customers.
Of course, customer value is more than just revenue minus costs—especially in this age of social media, where everyone writes reviews, whether asked to or not, and either recommends or criticizes business partners. Word-of-mouth is one of the most effective lead generators in B2B.
By the way, this also comes into play here The Vitrine / Tartine Story. A customer who is willing to serve as a reference and who brings in new leads for you is, of course, also valuable. In Microsoft Dynamics 365 (CRM), you can track which business partner referred each lead.
Nissan, for example, estimates that every satisfied customer brings in five new customers. This illustrates how important it is to keep your customers satisfied.
How can you increase customer satisfaction?
First and foremost: by delivering quality (that’s the foundation), managing expectations, and then systematically exceeding them. Furthermore, by involving customers as much as possible in the development of your products and services. Engaging customers automatically increases their satisfaction.
