This is an interesting one, because the term ‘customer’ actually can represent much more. In the context of CRM, this term is generally used to describe anyone that you may have a relationship with, including:    People who buy your products (eg – furniture)    People who you provide a service to (eg – lawnmowing)    Businesses who buy your products or services    Members of a group or society that you administer (eg – Australian Snake-charmers’ association)    Members of your sales distribution network (eg – a financial planner network)    Internal business customers of a business division (eg – “Ernst, Waterhouse & Partners” paralegal department may have ‘customers’ from across the organisation)

A 'customer relationship' is the term that is used to describe all of the interactions you have with a customer, and everything that your organisation has in common with the customer. Consider the example of Jeffery Jones, a customer of Ronaldson’s Real Estate:    Jeff rented a house for which Ronaldson’s was the agent    Jeff made a complaint about the quality of the carpeting in the house – the carpet was replaced    Jeff bought his first home through Ronaldson’s last year    Jeff has asked to be notified if a 3-bedroom house within the $500k-$600k range goes on the market in his suburb, but he has also asked to not receive general marketing material from Ronaldson's    Frank from sales made a phone call to Jeff last week about the Thompsons’ property that has recently been put on the market

Managing customer relationships is collecting useful information about the people who are, or could become, your customers. Wouldn’t it be great to have a single view of each customer based on every piece of information your company collects, all stored in a single location that is accessible across all parts of your organisation. This would mean that you could:    Say the right things at the right time (eg – "Congratulations on the birth of your third daughter Mrs Jones – if you’re interested in upgrading to a 4-bedroom house in the near future, remember that we’re here to help".)    Understand your customers better (eg – what proportion of my customers are over 45? Has this changed in recent years?)    Target specific customers through marketing (eg – a letter to all customers over 45 regarding your new golf clothing line)

Some businesses sell products such as lawn mowers, furniture, or toenail clippers. Others sell services such as mechanical repairs, lawn mowing, or accounting. So services are the ‘things’ that you provide to a customer if you are in the ‘services’ line of work.

Service management is breaking up your customers’ service requests into chunks with prices and requirements attached to them. For example, Joe’s lawn mowing services may offer the following:    Lawn mowing - $50 per 5m squared    Hedge trimming - $20 per hedge    Tree stump removal - $100 per stump Each of these service offerings will require a certain amount of time, will require certain tools, and maybe particular people. For example, Joe may be the only employee who knows how to use the tree-stump removal machine. Once you understand your service offerings, you will be able to schedule the work that your employees carry out for your customers on a daily basis. By doing this, you can make the most of the time you have available in the day, and service your customers’ needs more efficiently.

Most businesses that sell a product or service progress through various stages before they get their money. The sales process is the pattern that these stages follow. There could be a range of different stages in a business’s sales process, for example:    Sales lead > Customer contact > Sales prospect > Quote > Customer order > Invoice > Payment    Conference registration > Follow-up contact > Membership application > Application approval > Membership fee payment    Client lead > Consulting opportunity > Discovery session > Presentation of proposal > Signoff of proposal > Invoice > Payment

The "sales pipeline" is the sales process in action. As the analogy goes, customers progress through the pipeline and money falls out the end. Some sales-speakers talk of "blockages" in the pipeline (eg – "We’ve got 1,000 customers who’ve received quotes but have not been called back yet"). Others may refer to a "wide funnel" at the top of the pipeline, meaning that there are a lot of different sources of leads – lots of people who we can target for a sale.

The first step in managing the sales process is understanding that there is a process at play. Once you map out the steps that you go through to sell your products or services, you will be in a position to standardise what you do at each stage, and focus in on the process itself. This is process streamlining. Its purpose is twofold: 1. To reduce the amount of time that it takes for a potential customer to move from one stage to the next. This will reduce the amount of time from when you first call the customer to when you get your money. If it used to take you about a 6 months to sell an irrigation system, and you reduce this to 3 months, then each salesman can now sell 4 per year, instead of 2. 2. Improve the conversion rate from one stage to the next. If 20% of prospective customers used to ask for a quote, and this increases to 40%, then you end up with more sales.

Essentially, there are two sides to any business: The products that you sell (the product), and the people who might buy those products (the market). Marketing is all about bringing the product to the market. To do this, you need to break the market down into chunks that you can handle. So for example, if you own a car sales yard, and have recently added a “golf buggy” to your product range, how do you go about bringing that product to the market?    Who plays golf?    Who plays golf and can afford a golf buggy?    Where do these people live? How old are they? What jobs do they have? What car do they drive?    How should I advertise to them? Do they watch TV? Do they read newspapers or magazines?    Do they communicate through email, or would they rather receive a letter or a phone call? Once you answer questions like this, a good CRM will provide you with the information and the means to directly and easily target the people who are most likely to want to buy one of your golf buggies.