CRM takes another beating in the mid manufacturing market

Manufacturing enterprise (ERP) and supply chain software and services provider SSI has joined the league of those pronouncing big-icket CRM (customer relationship management) systems as inappropriate for the needs of most companies in the manufacturing sector. “The standard definition of CRM is ‘identifying, attracting, developing and retaining customers to generate sustainable and profitable growth,” says SSI director Neville Merritt. “For most manufacturers who have business customers rather than individual consumers, it’s the developing and retaining aspect that is most important – being able to create an intimate relationship with them, and then supporting them efficiently.” CRM systems are reputed to be one of the fastest-growing areas in enterprise IT but, says Merritt, this growth has primarily come about in large companies, especially in the service sector. “Banks, insurers, retailers and the like have seized upon CRM, because it enables them to duplicate, on a vast scale, the kind of personalised service that smaller companies give their customers,” he argues. “Smaller companies, especially in manufacturing, don’t have exactly the same needs, because their target market is generally smaller, and they usually already have a personal relationship with their customers and key prospects.” In manufacturing, Merritt reckons the challenge is more about improving revenue and customer retention through better service while simultaneously reducing cost. Merritt cites research from Insight Technology Group showing that less than a third of CRM initiatives have a significant effect on sales performance. He suggests that smaller firms need to think very carefully about which elements of the solution they implement. “Companies should focus on the experience of being a customer,” he says. “They should realise that not all customers are equal, and learn to identify those customers from which they make the most profit. They need to be able to segment customers, and tailor their offering to the needs of each segment, personalising communications such as direct mail and web portals to address the needs of particular customers. They need to be able to get detailed customer information – from one centralised database, so there is no danger of conflicting messages – in front of all members of staff who might have contact with the customer.”