Sales & Marketing systems are not traditionally renowned for the role they can play to help manage business risk.  However, when customer service and the sales ordering processes are controlled within the context of a single integrated business system, with CRM at its heart, some commercial and operational risk factors can be mitigated.

CRM is recognised as a tool to increase sales and customer loyalty, which of course is what we all want, however we also want our customers to pay their bills on time, in full, and not take advantage of services for which they are not entitled.  As a finance man, my tendency is to focus on the ‘bottom line’ rather than the headline sales number, which excludes such costs as bad debts, interest payments on working capital and foreign currency losses.  Avoiding these costs as far as possible and maximizing the resources within any business in my view is as important as driving up the sales numbers.

Here are some issues you might like to consider:

  • When taking orders from either new or existing customers, understanding their credit status may be a simple case of checking your accounting system, however for those of you who have distributed sales and accounting processes (i.e. more than one of you!), this is never as simple as it sounds.  In addition to the credit issues, pre-existing customers may have been granted special payment terms which need to be considered when discounting or setting customer specific pricing.  With very tight margins, allowing customers extended payment periods may make a big dent in any anticipated profits.
  • If you deal with very large organisations or government agencies you will know getting paid can be, to say the least troublesome.  Very often even the invoice format and associated backing detail has to be a very specific format otherwise they simply will not pay.  The amount of management time worrying about this stuff just eats away at the margins.
  • With a globalised marketplace, small businesses now have to worry about foreign currency exchange rates.  When buying or selling products in any currency other than your own the exchange rate achieved on any given deal can sometimes be the difference between making a profit or not, not to mention the operational activity costs and associated costs importing and exporting.
  • CRM is about nurturing our prospects and retaining customers for as long as possible to maximise the return on the investment acquiring them.  That said we also need to recognise that we need to control any after-sales services provided within boundaries of what has been agreed.  ‘Revenue leakage’ can occur when we provide services which we can legitimately charge for but don’t because we either forget or are not clear whether they are entitled to these services under their contract agreement.  Whilst we might be making some customers very happy, receiving services for free, we probably will misappropriate resources away from paying unhappy customers.

There is no silver bullet to any of these problems; they are part of everyday business life, however with joined-up data and processes using integrated customer management systems, we can attempt to mitigate many of these risks and hopefully make more profit!

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