Pay attention to your customers and your business will thrive – it sounds simple, but for many companies this adage can be incredibly difficult to put into practice. Many firms are too busy focusing on sales and profits that they fail to prioritise the people who are buying their products or services, and therefore flounder or even go bust.

It's not just about what the customer wants either; proper consideration encompasses a number of areas. They range from pre-sale information right up to the transaction itself, follow-on customer care and possible future orders. Sometimes looking after customers can seem like a full-time job, and so it should be.

That does not mean however, that a company should devote resources it can't afford; staff time and capital, so that they're properly dealing with their customers. So how you do you it? Customer Relationship Management systems, or CRM - every firm should have one, no matter how large or small, to save time and money and help to drive up sales and profits.

What does CRM actually do?

CRM is all about analysing where your sales are coming from, both now and in the future. The only way to do that is to examine the people who are doing the buying and identifying the different types, as there can be all kinds, from frequent buyers to those who are no longer "active" and have lapsed. Not being aware of these essential aspects of business life can be perilous, if not ruinous, for companies. Already many firms have vast amounts of data on their customers – information generated during the sales process – but many are just not using it and are therefore losing out.

Today, sophisticated CRM software programs allow companies to track their customers and their purchasing habits in detail and discover valuable patterns that can be used to increase sales. Many other strands of CRM can be factored into such programs, from customer feedback to rewards programs.

We're all aware of supermarkets' rewards cards that offer various advantages to shoppers, from discounts to special offers – and this is, in fact, a form of CRM. That's because it allows the supermarkets to build up an enormous database of their customers' purchases and preferences, and this enables them to target items at them that they favour, so that there's more chance of them buying them – and boosting sales.

CRM: Every aspect of operations

For companies that manage to not only meet customers' expectations but exceed them, they've gone a long way towards achieving that holy grail of commerce: loyalty. It means when customers want a particular product or service, they're more likely to choose yours and so you get valuable repeat business that you may be able to rely on. The customer thinks – rightly – that you're doing your best for them, and more, and so they reward you with this business because they feel valued.

On the other hand, hardly meeting customer expectations at all can be disastrous, as they may swiftly go elsewhere. So every aspect of running a business and how it interacts with customers needs to be closely scrutinised. That starts with the amount of time it takes to deal with customers, whether in person or on the phone.

Keeping customers waiting is one of the biggest complaints received about businesses, and the quicker you can answer that phone or deal face-to-face with a customer the better. Swift, courteous, professional service will also get you that other precious business commodity: good word of mouth. It's priceless advertising.

Fitting in with your business

CRM should ideally be integrated across all parts of a business, in every department, to ensure maximum impact. That means everything from handling customers to marketing, deliveries and everything else should be incorporated into this vital business tool so that standards are improved right across the board and sales improve. Even simple exercises such as becoming a customer of your own company can provide valuable insights into parts of your business that may be lacking.

So in order for CRM to be fully effective, the entire business needs to be appraised – from how staff who are dealing with customers look and behave to how visits and meetings with suppliers go. You also want to be finding out why some customers are disappointed and actively working to resolve the issue. Disgruntled customers are deadly for companies, as they spread the word around family and friends to avoid a firm because of bad service they received.

One way of finding out how your customers feel about you is to carry out a satisfaction survey. When constructing your survey it's worth considering the KANO model as it will force you to think about what it is your customers have grown to expect from you and your competitors - see our article on understanding your customers. When it comes to surveys you can either do it yourself or hire a specialist firm to conduct one. Be prepared for the results, because there are likely to be highly critical comments that might cause upset – but that's good. You need to know about it now so you can remedy it, as well as letting your customers know what you've done to improve things.

Whatever you do, when you get survey results, don't just pat yourself on the back and leave it at that – take action to fix anything that's wrong, or the whole exercise will have been pointless. It's designed to unearth trouble that may be holding the company back.

The bottom line

No company can now afford to be without a good Customer Relationship Management system. Competition is so fierce and customer expectations of standards so high that if you don't implement a CRM, you're bound to lose out in a big way. It gives an overview of the workings of the business, from current sales to those of tomorrow while not eating into time that otherwise might be spent on lengthy administration.

One of the world's richest and most successful entrepreneurs, Bill Gates of Microsoft, said:

"How you gather, manage and use information will determine whether you win or lose"

It’s all about intelligent management, and CRM, properly executed, will certainly help get you there – increasing productivity and sales and pushing profits right up.

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