10 things you should know about customer relationship management (CRM)

CRM has become a key business paradigm for organizations seeking to cultivate and expand their customer relationships, but many implementations fail because of misconceptions and unrealistic expectations. Here are some factors to keep in mind as you begin to explore possible CRM solutions for your organization.

#1: CRM implementations focus on gaining and leveraging a keen understanding of the customer

The CRM approach involves capturing, managing, and leveraging all the information you have about your customers. With a stronger understanding of your customers, you should be able to better manage your relationship with them, keeping them happier, more loyal, and more likely to buy products and services from you.

#2: CRM is a mindset and a philosophy

CRM is not a tool, although many aspects of the customer relationship can be automated using packaged or customized software solutions. In fact, CRM software is only a small part of an equation that includes changing business practices to focus more on customer needs and reorienting databases so that customer data is more easily found.

#3: The implementation of CRM in your organization needs to be viewed as a culture change initiative

You're changing the way people do their jobs. To be truly successful will require a multifaceted and long-term focus. It is going to require new processes, training, templates, reporting relationships, metrics, templates, tools, etc.

The cultural impact of a CRM initiative can be tremendous, and organizations that underestimate the fallout often fail in their implementations. Imagine a department of longtime employees who have their routine down to a science. All of sudden, they have to learn an entirely new system, give up some of their "territory" to other departments, develop different skills sets, and share information that used to be their sole province. Now multiply those dynamics across the organization.

#4: CRM implementations don't happen overnight

Many organizations want to implement CRM in a short period of time. Usually what they mean is that they want to implement a CRM software solution in a short period of time. Although it is possible to estimate how long a software implementation may take, it is much harder to know how long the culture change will require to take hold. In other words, the length of time required for people to develop a CRM mindset will take much longer.

#5: A good CRM implementation provides a 360 degree view of the customer

The 360 degree view is sometimes called end-to-end customer management. Every place in your organization that touches your customer should be integrated. Many people think only of sales force automation. Although the sales function is certainly up front in the customer view, a 360 degree approach also takes into account areas such as:

* Executive management contact with key accounts
* Customer support functions, such as your help desk that customers may call for technical support
* Customer service functions, such as billing and accounts receivable
* Trade shows, marketing, advertising, press releases, etc.

#6: CRM requires customer analysis

In addition to the customer-touching functions, CRM includes the analytical aspects of understanding your customers, their buying habits, and the reasons why they make the decisions that they do. For instance, you may be able to identify certain types of customers who are more likely to buy add-on products. In the future, when you gain new customers with these same characteristics, you can try to up-sell these add-on products to them. A lot of your company marketing research takes place in this aspect of CRM.

#7: CRM solutions can be finely tuned to optimize the timing of sales

In some of the more sophisticated approaches to CRM, the sales cycle can be customized for each individual customer so that you have the best chance of making the sale. The customized sales cycle is flexible to meet the needs and motivations of the individual customer and is based on tracking the results of similar customers in the past.

#8: Functions across your entire organization may be candidates for CRM

If you think about CRM from a broad viewpoint, you might consider much of the company to fall under the overall CRM umbrella. After all, many businesses are providing services to customers, selling products to customers, manufacturing products for customers, billing the customers, collecting money from customers, etc. This is not to say that every aspect of the company falls under traditional CRM. However, if you wanted to take this high-level view, perhaps many of the functions in your entire company could be placed under CRM.

#9: Resistance to CRM culture change can mean failure

Most CRM initiatives are not totally successful, and many fail. This observation is not just about CRM. In fact, most culture change initiatives achieve only a fraction of the benefits that were originally proposed. If you don't take a long-term view and if you don't have strong executive sponsor support, you will probably not be successful.

Many sponsors think that when the CRM software is installed, they have successfully implemented CRM. What they don't understand is that the hard part of CRM is in the culture change. It's getting people to change how they do their jobs and to adopt a CRM culture. This can take 10 times as long as the software implementation (if it happens at all).

#10: You need to tread carefully when collecting customer data

Many people are wary of the data collection required to support sophisticated CRM solutions and feel that it's an invasion of privacy. These concerns should be taken into account when implementing a sophisticated CRM system. For example, you may want to tell customers that you are collecting certain data about their purchase and allow them to opt out of the program.

Source: http://articles.techrepublic.com.com/5100-10878-6119704.html

Small Business Should Embrace CRM in 2008

By Brent Leary

Customer relationship management providers have tailored their offerings for the small business market, providing software-as-a-service options, integration with other technologies, and an understanding of what small businesses want.

I’ve been involved in with customer relationship management (CRM) in some capacity for the past ten years. During the past five years, my focus has been on helping small and mid-sized businesses understand how CRM can help them in finding, catching, and keeping good customers. But CRM got slapped with a much deserved reputation as being too costly, too time consuming, too complex, and too disruptive to be successful. Even though most of the horror stories were at the enterprise level, most small businesses were scared away from even thinking about implementing CRM.

Over the last few years, however, thanks to software-as-a-service CRM providers like Salesforce.com and NetSuite, CRM has rehabilitated its tarnished image. Because of this, large enterprises along with mid-sized companies have opened up their arms and embraced CRM in its more affordable, easier, and accessible reincarnation. And while a growing number of small businesses have also turned to CRM, the vast majority have not as of yet. I think 2008 is shaping up to be the year when small businesses join the CRM party. Here are a few reasons why.

So that's what CRM is

Until recently many small business people still really didn’t know what CRM was and how it could help them. That shouldn’t come as a big surprise. Performing a Google search on the term “What is CRM?” returns close to two million definitions for customer relationship management. Formal definitions usually include the integration of people, process, and technology to maximize relationships and provide seamless coordination between all customer-facing functions. But the emphasis was always on technology, which typically meant buying software and servers, and having IT staff at the ready. This alone was enough to scare off the average small business with no internal IT staff.

So it was difficult in the past for small businesses to view CRM as anything other than technology. But thanks to SaaS erasing most of the IT requirements of the past, small businesses are able to focus on the impact CRM can have on the issues important to them -- like leveraging the Web to acquire new customers, selling more to current customers, analyzing the effectiveness of marketing activities, and providing better customer service to keep valuable customers happy. All in the name of building stronger, longer lasting business relationships. These are things any small business can understand if they can get past technology fears and industry jargon.

Inheriting the Web

Small businesses are looking to the Web to help them find, catch, and keep customers. They are buying into the power the Web has in creating opportunities to reach more people at the most important time: when they are looking for products and services to solve an issue. They are using e-mail marketing, search engine optimization, and even dabbling in social networking in order to build relationships with customers and prospects. And there are a number of CRM services on the market today that make it fairly easy to create landing pages, execute e-mail campaigns, and even manage search engine marketing campaigns. Infusion Software, an SaaS CRM provider focusing on small businesses, even includes affiliate tracking to allow companies to keep tabs of business coming in from partners. Concursive offers a suite that integrates CRM with website creation and content management. And both Salesforce.com and NetSuite allow you to manage Google AdWord campaigns from within their services.

Mobility is also important to small business people, as they spend less time in an office, but need to respond quickly and accurately to customers and prospects. Providers like Salesforce.com and SageCRM.com are making it easier than ever to access CRM data and functionality on devices like the BlackBerry. And NetSuite and other providers like EBSuite and HEAP have created interfaces specifically for the iPhone.

As our personal and professional lives converge and our dependence on the Web grows along with our need to do more while on the go, CRM providers have made it possible to for us to be respond quickly and meaningfully to customers.

The Microsoft factor

While it’s been around for years now, many small businesses have remained on the fence about both SaaS and CRM. Even with Salesforce.com grabbing headlines and bringing attention to the space, small businesses haven’t been too comfortable with the idea of having their customer information outside of their premises. But that may change with Microsoft’s upcoming Live CRM offering scheduled for release in the next couple of months. Microsoft has been offering CRM products for years now, but Live CRM is their first SaaS (or as they like to say Software and Services) offering. And to millions of small business people who run their businesses with software like Office, Outlook, and Windows, Microsoft joining the SaaS brigade validates the service option in ways the smaller, lesser known companies haven’t been able to do.

So expect to see more small businesses giving CRM a second look with a less skeptical eye than they have before. While Microsoft will bring in new customers because of their name, they will also bring more attention to the whole industry. Small businesses will find lots of great options out there from companies like Infusion, Zoho, Salesboom, and others that are focused on serving the small business community. Salesforce.com and NetSuite, of course, are still there leading the charge.

The time is now

With prices more affordable than ever and tools easier to use and accessible from anywhere, it looks like 2008 is the year small businesses move en masse towards CRM. However, it also appears that the industry has finally moved towards small businesses by creating the products and services they’ve needed all along: the tools they need to build meaningful relationships with those looking for the products and services they provide. That’s what small businesses have been waiting for all along.

Brent Leary is a small business technology analyst, advisor, speaker and award winning blogger. He’s the host of “Technology… for Business $ake”, a weekly radio program on www.BusinessTechnologyRadio.com. His popular blog can be found at www.brentleary.com.

Unlocking the Code: Open-Source CRM

Affordable, customizable and transparent — those are just a few of the perks of open-source CRM.

By Cindy Waxer on November 20, 2007

There have been countless attempts to deliver enterprise-grade CRM to the masses, but none as promising as open-source CRM. Open-source CRM thrusts software engineering out in the open, where developers can view source code and take control of the product-development process. And the perks are plentiful.

For starters, said Paul Greenberg, president of the CRM consultancy The 56 Group LLC, “Open-source CRM is cheaper. Plus, because the code is available, it gives companies the opportunity to customize.”

But that’s not all. “Because the development community is so large, technical issues don’t have to solved by a company’s internal staff,” said Greenberg. “They can be solved by the community, and that’s pretty significant.”
Open-Source Options

Given these benefits, it’s no surprise that an increasing number of vendors are peddling their own version of open-source CRM. Leading the pack is SugarCRM Inc. SugarCRM consists of sales-management, marketing-automation, customer-support and reporting tools. Deployment options include on-demand, appliance or on-site. And product modules range from lead tracking and contact management to account relationship and marketing campaigns.

Another open-source player is Centric CRM Inc., which offers its full downloadable source code at no cost. Centric CRM includes all common CRM modules and adds significant capabilities such as project and document management, customer surveys, and help-desk functions. The Centric Public License is simple and straightforward: It permits modification to the source code, and derivative works and modifications belong to their developers. (That said, most of the developers in the Centric CRM community submit their improvements for inclusion in the source code.)

Then there’s vtiger.com. Built over Linux/Windows, Apache, MySQL and PHP technologies, as well as other open-source projects, vtiger.com caters to small- and medium-sized businesses while offering enterprise features such as SFA (Sales Force Automation), customer support, marketing automation, inventory management, security management, product customization and email integration. Business productivity add-ons include Outlook Plug-in for Microsoft Outlook users, Office Plug-in for Microsoft Word users and Thunderbird Extension for Thunderbird email users.

And finally, SplendidCRM Software Inc. offers a Microsoft-centric open-source CRM application and supports many of the same features offered by SugarCRM.
Open-Source Gotchas

But for all of open-source CRM’s promises of cost savings and easy customization, Greenberg said that there are shortcomings as well.

“There’s no guarantee on code quality,” he warned, the consequences of which could be disastrous. Continued Greenberg, “The worst problems will take your systems down; the least dangerous will decrease the efficiency of your activities.” That’s why it’s crucial that companies turn to qualified IT professionals to examine and qualify an application’s code before diving in headfirst.

And while a huge development community can serve as a valuable resource, it simply can’t replace the support provided by an on-the-payroll vendor. Said Greenberg, “You’re dealing with an independent development community that doesn’t have to answer to you.”

Nor is there a single, universally agreed upon definition of “open source.” Consequently, the CRM market has recently witnessed the proliferation of a hodgepodge of vendors, each claiming to offer the latest and greatest open-source CRM solutions. In the meantime, giants such as Microsoft are even getting in on the game, revealing bits and pieces of code to the public as the open-source CRM trend gains mainstream traction.

Salesforce.com/GoogleApps v. Microsoft Dynamics CRM Online/Office Live? Whew. More Than That.

Interesting article from PGreenblog:

Salesforce.com/GoogleApps v. Microsoft Dynamics CRM Online/Office Live? Whew. More Than That.

As is everywhere you can imagine on the web today, the big discussion is the announcement today by salesforce.com and Google about the integration of Google Apps with salesforce.com's CRM services. Phil Wainwright wrote a whitepaper for the "event" that explains what's going on well:

Salesforce for Google Apps brings this effortless, non-invasive integration to life. The full suite of Google Apps – including Gmail, Google Calendar, Google Talk, Google Docs (word processing, spreadsheets, and presentations), and Google Start Page – is instantly available to any Salesforce customer that chooses this option. Once activated, every component of Google Apps becomes an integral feature of the Salesforce environment, available as a natural part of the user’s working routine. Despite this organic fusion at the user interface, each application remains programmatically autonomous and can add new features or upgrades – such as extensions to Google Apps’ recently introduced offline working capabilities – without requiring any modification to the integration. Compare this approach, for example, to integrating Salesforce with Microsoft Outlook, which requires separate installation of a software download that must be reinstalled every time Outlook is upgraded to a new version.

Wainwright does an excellent blog posting on this today though I don't totally agree. I still think that the functionality of Google apps is nowhere near the functionality of Microsoft Office and I agree with his colleagues - in particular Joshua Greenbaum - that Google apps terms of service aren't conducive to corporate living. In fact, if you think about today's announcement on the face of it, let me ask you this. If Microsoft announced that they were integrating Microsoft Dynamics CRM Online with Office 2007 today, how excited would you be? Not that excited since it already is - and this move is aimed squarely at Microsoft I would say, wouldn't you? But there is something on a bigger stage that is being done here that might be even more meaningful in the long run. I have a whitepaper that I did for salesforce.com too that might or might not be released for this event - its on the vendors that are contending for what I call the New Desktop. This is part of a much bigger whitepaper that I also did for salesforce.com on "The New Desktop" and how it is transforming the traditional desktop to something very different than we've ever seen. Imagine a desktop that is no longer the specific PC capabilities to improve your personal productivity but instead, the desktop as a social platform that is aimed at real time collaboration and communication which, as a corollary feature, improves personal productivity. The platform for the new desktop extends to multiple devices - could be the PC or laptop or other mobile device - as Yankee Group calls them the Anytime, Anytime Consumers or Enterprises.. There are no winners as of yet, but there are contenders for sure - among them salesforce.com. I'll let you go to salesforce's site to get the white papers when they appear there and I'll be writing on the concepts in the near future in detail. Suffice to say, the battle to take Microsoft's space is not for the title of "Lord of the Personal Productivity Universe" particularly especially because of the current weaknesses of Google Apps. I like the idea that Rebecca Wetteman of Nucleus Research (probably the first thing I've ever liked from Nucleus for that matter) has which is that companies should take a "tiered approach" - some can use Excel, others the Google Apps spreadsheet. Regardless of the apparent purpose of the team-up, I do like the idea of this alliance and think its a good thing if Google's arrogance doesn't trip the whole thing up. Over the long run this is an important fight because it is a fight for the hearts and mind of the social customer (which can only benefit that customer) and will reveal over time which tools people will be using to engage each other and their paramour company choices as the 21st century advances. The battle for the New Desktop begins. I'll be both watching and participating. Help me shape the whole battle because when push comes to shove, its us as customers who need to make the decisions here - not salesforce/Google or Microsoft/Microsoft.

The Manager's Cheat Sheet: 101 Common-Sense Rules for Leaders

This is an old article but worth reading. Maybe a good basis to recognize a good leader…


The Manager's Cheat Sheet: 101 Common-Sense Rules for Leaders

Boost your management skills by getting back to the basics — here are some common sense tips for leading an effective team.
By Inside CRM Editors
on August 22, 2007

Management is all about connecting with the people on your team. So how do you effectively manage a team? With common knowledge, of course. These are a few back-to-basics rules that will help you develop management skills that really matter.

Like it or not, your body speaks volumes, even when you are silent. Here's how to express an attitude that's appropriate for a leader.

1. Stand tall. Keeping your shoulders back and holding yourself up to your full height will give you an air of confidence.
2. Take your hands out of your pockets. Putting your hands in your pockets is often seen as a sign that you have something to hide.
3. Stand with your arms crossed behind your back. This will help you adjust your posture, and it leaves your hands in a position that is open and not intimidating.
4. Make eye contact. Always look directly into the eyes of the people you are speaking with. This shows you're interested and also gives you a sense of confidence.
5. Sit up straight. Even if you're at an 8 a.m.meeting and feeling tired, it's important to sit up straight in your chair. Slouching makes you look disinterested and can give off an unwanted air of laziness.
6. Face the person you're talking to. This shows you are interested and engaged in the conversation.
7. Shake hands firmly. For many, a handshake is a reflection of the person you're shaking hands with. You don't want to come across as unsure or overbearing, so make sure yours is professional and confident.
8. Always smile. Smiles are contagious and will make others feel positive when you're around.
9. Look your best. You don't have to be model perfect every day, but you should dress appropriately and neatly. Clothes can have a big impact on the way you're perceived.
10. Walk confidently. Keep your head up and take even strides.
Meeting Deadlines

No one will be happy if your team has to rush around at the last minute to complete a project. Follow these tips to make deadlines less stressful for everyone.

11. Only promise what you can realistically deliver. Don't create deadlines that you know you can't meet. By only promising what you know you can do, you'll be able to finish on time.
12. Set clear goals. Once you know what you need to accomplish, it helps to know how and when you want to do it. Put your goals down on paper and make sure everyone on your team gets a copy.
13. Organize a team. Many of your employees will have unique strengths and training that can make them great assets to certain projects. Pick a team that has the right skills to carry out the job.
14. Delegate tasks. Spread work among your employees in a way that doesn't leave anyone overburdened while also allowing the project work smoothly.
15. Create milestones. Creating milestones for you and your team will help you keep track of your progress and also give you a sense of accomplishment as you reach each milestone.
16. Keep communication open. Keeping everyone in touch with the status of the project is key to making sure it's completed on time.
17. Do it right the first time. Planning ahead will help prevent you from delivering a substandard product. Having to redo something for a client costs money, and, more than likely, future business opportunities.
18. Stay organized. Staying organized will help keep you from wasting time chasing down important documents and information.
19. Make sure expectations are clear. Be sure that each member of your team knows what their specific responsibilities are. This will save time and prevent tasks from being overlooked.
20. Create a plan. Compile your goals and milestones into a comprehensive plan for attacking any project you are given. This way, you can make sure you're staying on schedule and that all of your employees will be clear about how and when things should be done.
Getting Along with Employees

A happy office is a productive one. Everyone will be more cheerful if you follow these simple rules.

21. Don't make your employees come in on days they're normally not scheduled to work or call them while they're on vacation. A surefire way to make employees resent you is to invade their personal time for nonpressing work. Unless you have something that absolutely has to be done, let time away from work stay that way.
22. Don't play favorites. Playing favorites can bias your judgment and impair your leadership abilities. Treat your employees equally.
23. Give credit when it's due. Don't take credit for your employees' ideas or hog their limelight. This action not only fosters resentment but also makes you seem untrustworthy.
24. Don't micromanage. While it's fine to keep up with what your employees are working on, don't constantly look over their shoulders.
25. Never discuss employee matters with their co-workers. This kind of gossip always gets back to the person and will make you look unprofessional.
26. Don't interfere with employees' work. If your employees are getting work done, don't stress about how it gets done. Even if it's not being done they way you'd do it, it's best to let employees use their best judgment.
27. Don't push unreasonable deadlines. You don't want to spend all of your time at the office, and neither do your employees.
28. Keep your promises. Barring some catastrophic event, you should always keep promises you make to employees, especially about pay and benefits.
29. Keep work about work. Don't require employees to run your personal errands. Take care of your own personal business or hire an assistant.
30. Reward hard work. Make sure your employees feel valued for the work that they do. Employees will be more willing to put in extra effort if they know it's noted and appreciated.
31. Provide motivation. Sometimes employees need a morale boost. Provide them with encouragement to get a project rolling.
Manage Yourself

Being a good manager isn't just about what you can encourage other people to do, it's also about managing your own performance.

32. Be accessible. Don't hole up in your office all day — come out and visit with your employees. Let them know that they can always come to you with problems and concerns.
33. Be open to constructive criticism. It may not always be what you want to hear, but listening to constructive criticism gives you the chance to learn and grow from your mistakes.
34. Accept responsibility. Part of being the boss is accepting responsibility for the mistakes of all that you manage, not just your own.
35. Know there's always room for improvement. No matter how good you think you are, your job can always be done better. Always be willing to learn.
36. Improve your skills. Learning is a lifelong process. You're never too old to take a class or ask a co-worker to help you improve your knowledge.
37. Explain things simply. Don't use big words or technical jargon just to sound smart and impress others. Your employees will understand and perform better if you explain simply and clearly what you need.
38. Instruct rather than order. You may be the boss, but you don't have to be bossy. You'll have more success if your requests are more tactfully delivered.
39. Include your staff in your plans. Don't make your work top secret; let your employees know what's going on and how they are expected to contribute.
40. Know your subordinates' jobs. You don't want to be caught with inferior job knowledge.
41. Be flexible. It's fine to be firm in what you expect, but allow for flexibility in how it gets done.
42. Get regular feedback. Your employees and superiors can give you valuable feedback on how to improve your performance. Use this to your advantage.
43. Know your limitations. You can't be everywhere doing everything all at once. Know the limits of your time and abilities and say no to things you know you can't do.
Boosting Productivity

Getting the most out of your day can be difficult with a busy schedule, but you can use these tips to help you maximize your time in order to be better available to employees.

44. Get the most out of meetings. Be organized and prepared for meetings to increase effectiveness and time savings.
45. Focus your energy on things that matter. Don't let trivial tasks take time away from things that are really important.
46. Identify your time-stealers. Everyone has little things that detract their attention and make them lose focus. Figure out what these are and work to eliminate them, if only for a few hours a day.
47. Be punctual. Being on time is a big deal. Never keep people waiting for appointments or meetings if you can help it.
48. Respond to your correspondence within a reasonable amount of time. You don't have to be chained to your inbox, but make sure you respond to emails within a few hours whenever possible.
49. Do only what is necessary. There are times when going above and beyond works, but doing so on a daily basis can derail your progress on more important issues. Get the key things done first, then see if you have time for additional things.
50. Stick to schedules and routines. While they may not be the most exciting things, schedules and routines can help streamline and improve your productivity.
51. Organize and manage your schedule. Use any tools and utilities you have at your disposal to prioritize your day and keep track of what you need to get done.
52. Plan more than you think you can do. While this may sound stressful, it can actually be a great motivator. If you manage to get everything done, you'll enjoy a great sense of achievement.
53. Get to work early on occasion. Sometimes an uninterrupted half hour in an unoccupied office can help you get key things done or allow you to plan your day before there are any distractions to slow you down.
54. Know that sometimes stress is good. While too much of anything, especially stress, can be bad, sometimes a little stress can be the motivation to get you moving, allowing you to get more done.
55. Do your least favorite tasks first. Get your most tedious and least desirable tasks out of the way earlier in the day. After that, everything else will be a breeze.
Managing Finances and Resources

Whether you're a business owner or a manager, staying on top of tangible items is vital to success. These tips can help you keep track.

56. Set up a realistic budget. While it's good to be optimistic, don't plan for more spending than you know you can afford. Make sure you plan for emergencies and contingencies as well.
57. Save costs where they matter the most. Don't just pinch pennies for the present. Make sure your savings will pay off in the long run. Compromising on quality might cost you later on in repairs and replacements.
58. Spend only when it's necessary. Don't spend if you don't need to. Every bit you save goes toward your profit.
59. Find alternative sources of finance. Sometimes even successful businesses need a little help. Business loans and investors can help you through leaner times.
60. Stay true to your contracts. Not only will you gain the respect of your clients, you'll also avoid legal battles that can be a serious financial drain.
61. Make sure employees are well compensated. Employees deserve to be rewarded for hard work. Make sure yours are well compensated for their time and they'll be more productive and happier to come to work.
62. Learn to do more with less. Quality is much more important than quantity, so make what you have count.
63. Assign equipment wisely. While it might be nice for every employee to have a PDA, budgets often don't allow for such conveniences. Make sure the employees that need tools the most have access to them.
64. Invest in solid technology. This doesn't always mean the latest technology, but what your office needs to do work effectively.
65. Update when necessary. Using obsolete equipment and programs can really slow you down. Update when it makes sense so you won't get left behind by competitors.
66. Don't be wasteful. Every sheet of paper, paper clip and pen is a cost on your budget. Use materials wisely and don't waste them out of haste or carelessness.
Communicating with Clients

Whether you're a business owner or a manager carrying out a project, one thing is always the same: The client is dominant voice in decision-making. Learn to communicate with them effectively and you'll set a good example for the people you supervise.

67. Remember that the customer is the boss. At the end of the day, your job is to make the customer happy. Act accordingly.
68. Differentiate your products. Don't get lost in a sea of products and services like yours. Make sure you stand out from your competitors.
69. Retain customers as much as you recruit new ones. While you always want to bring in new business, it's very important to maintain relationships with loyal customers.
70. Provide effective channels of communication. Make sure your clients can contact you easily and quickly if they have a problem, concern or question. They can also provide a valuable source of feedback.
71. Maintain customer data. Use this data to make your customers feel special by remembering occasions like birthdays and anniversaries. It's also helpful for keeping track of purchasing preferences.
72. Segment your customers. Not all customers are alike. Divide your customers into groups that allow you to provide attention and services that meet each customer's unique needs.
73. Provide effective after-sales services. Don't let contact fall off after the work is complete. Make sure your client stays happy.
74. Listen attentively. Pay attention to exactly what clients are asking for to help you better meet their needs.
75. Don't be afraid to say you don't know. It's OK not to know the answer to every question. It's better to say you don't know and get back to a customer than to try to bluff your way through a conversation and have to backtrack later.
Keep Up with Change

There is no way to stop the world from changing, so follow these tips to keep up and ahead of the game.

76. Don't fight change. You can't stop markets, trends and technology from changing, so learn to go with the flow.
77. Adopt a predictive managerial style. Don't wait for things to happen to make a move. Anticipate problems and provide contingency plans.
78. Test your contingency plans. Waiting for disaster to strike is a dangerous way to find out if your emergency plans will hold. Test them out from time to time to fine-tune them and make sure they're still relevant.
79. Identify the positives. Even the most negative changes can have positive aspects to them. Being able to identify and maximize them can help make adapting less painful.
80. Be quick to adapt. Learn to adapt to changing situations quickly and be able to change plans on the spur of the moment if the situation requires it.
81. Stay tuned to external factors. Your business is affected in many ways by outside factors. Keep abreast of these so you can anticipate any sudden market changes that would affect how you need to manage.
82. Put in place a Research and Development plan. Encourage innovation and creativity to stay ahead of the demand for newer and better products and services.
83. Keep an eye on the competition. Don't let the competition get the best of you. Keep up-to-date with what they're doing and use it to your advantage in managing your business.
Resolving Problems

Whether problems are internal or external, they can make your management duties a nightmare if you don't handle them correctly. Here's how to stay on top of them.

84. Stand up for employees. If other departments or managers are bearing down hard on your employees, stand up for them.
85. Fix what's broken. Don't waste time placing blame. Take care of fixing the problem before dealing with any possible repercussions.
86. Manage and control your emotions. Don't let anger or frustration affect your problem resolution. If you are emotionally invested in a situation, cool down before discussing it or bring in an outside mediator.
87. Learn when to step in. Some problems might resolve themselves if you just let them be, but you need to be aware of times where you'll need to step in and take control of a situation.
88. Take the blame. If you've made a mistake, fess up. It'll give you more time to work on fixing the problem instead of talking your way out of taking the rap.
89. Get the facts first. Before you pass judgment on a situation, make sure you have the whole story. Listen to employees and refrain from questioning anyone's integrity without first ensuring that you've gathered all the data.
90. Rise above the crisis. Learn to separate yourself from the problem and rise above the fray. You'll be able to think more clearly and make a better decision on how to rectify the issue.
91. Don't ignore problems. A small problem can easily snowball and become something much more difficult to fix.
92. Try to depersonalize problems. Let employees know that the problem isn't with them but with their actions. Don't make it personal.
Go Above and Beyond

Managing people isn't just about getting the job done. To truly be a great leader, sometimes you need to go above and beyond what the job calls for.

93. Lead by example. You can talk until you're blue in the face, but the best way to get a point across is to be the model to emulate. Let employees follow your lead.
94. Get your hands dirty. Sometimes you need to show your employees that no one's above doing unattractive tasks.
95. Make a difference to your employees. Don't just be a generic manager — stand out as a leader and role model for your employees.
96. Gain your employees' trust and respect. You'll have a much easier time managing employees when they respect your rules and boundaries and trust your leadership.
97. Be empathetic to personal problems. Whether it should or not, what happens outside of work can have a big affect on the quality of work produced. Be sensitive if employees have personal issues that keep them from concentrating on work.
98. Be unique as a manager. Every position demands something different and you should be proud to be adept at your particular role rather than trying to emulate other managers.
99. Remember that ethics matter above all. Be honest and reliable in all of your business and personal relationships.
100. Be on the lookout for new ideas. You never know where your next great inspiration will come from.
101. Get to know your employees. Learn more than just their names. Get to know your employees' family backgrounds, likes and dislikes. Doing so will make you more personable.

Seven steps to remarkable customer service

By Joel Spolsky
Monday, February 19, 2007

As a bootstrapped software company, Fog Creek couldn’t afford to hire customer service people for the first couple of years, so Michael and I did it ourselves. The time we spent helping customers took away from improving our software, but we learned a lot and now we have a much better customer service operation.

Here are seven things we learned about providing remarkable customer service. I’m using the word remarkable literally—the goal is to provide customer service so good that people remark.
1. Fix everything two ways

Almost every tech support problem has two solutions. The superficial and immediate solution is just to solve the customer’s problem. But when you think a little harder you can usually find a deeper solution: a way to prevent this particular problem from ever happening again.

Sometimes that means adding more intelligence to the software or the SETUP program; by now, our SETUP program is loaded with special case checks. Sometimes you just need to improve the wording of an error message. Sometimes the best you can come up with is a knowledge base article.

We treat each tech support call like the NTSB treats airliner crashes. Every time a plane crashes, they send out investigators, figure out what happened, and then figure out a new policy to prevent that particular problem from ever happening again. It’s worked so well for aviation safety that the very, very rare airliner crashes we still get in the US are always very unusual, one-off situations.

This has two implications.

One: it’s crucial that tech support have access to the development team. This means that you can’t outsource tech support: they have to be right there at the same street address as the developers, with a way to get things fixed. Many software companies still think that it’s “economical” to run tech support in Bangalore or the Philippines, or to outsource it to another company altogether. Yes, the cost of a single incident might be $10 instead of $50, but you’re going to have to pay $10 again and again.

When we handle a tech support incident with a well-qualified person here in New York, chances are that’s the last time we’re ever going to see that particular incident. So with one $50 incident we’ve eliminated an entire class of problems.

Somehow, the phone companies and the cable companies and the ISPs just don’t understand this equation. They outsource their tech support to the cheapest possible provider and end up paying $10 again and again and again fixing the same problem again and again and again instead of fixing it once and for all in the source code. The cheap call centers have no mechanism for getting problems fixed; indeed, they have no incentive to get problems fixed because their income depends on repeat business, and there’s nothing they like better than being able to give the same answer to the same question again and again.

The second implication of fixing everything two ways is that eventually, all the common and simple problems are solved, and what you’re left with is very weird uncommon problems. That’s fine, because there are far fewer of them, and you’re saving a fortune not doing any rote tech support, but the downside is that there’s no rote tech support left: only serious debugging and problem solving. You can’t just teach new support people ten common solutions: you have to teach them to debug.

For us, the “fix everything two ways” religion has really paid off. We were able to increase our sales tenfold while only doubling the cost of providing tech support.
2. Suggest blowing out the dust

Microsoft’s Raymond Chen tells the story of a customer who complains that the keyboard isn’t working. Of course, it’s unplugged. If you try asking them if it’s plugged in, “they will get all insulted and say indignantly, ‘Of course it is! Do I look like an idiot?’ without actually checking.”

“Instead,” Chen suggests, “say ‘Okay, sometimes the connection gets a little dusty and the connection gets weak. Could you unplug the connector, blow into it to get the dust out, then plug it back in?’

“They will then crawl under the desk, find that they forgot to plug it in (or plugged it into the wrong port), blow out the dust, plug it in, and reply, ‘Um, yeah, that fixed it, thanks.’”

Many requests for a customer to check something can be phrased this way. Instead of telling them to check a setting, tell them to change the setting and then change it back “just to make sure that the software writes out its settings.”
3. Make customers into fans

Every time we need to buy logo gear here at Fog Creek, I get it from Lands’ End.

Why?

Let me tell you a story. We needed some shirts for a trade show. I called up Lands’ End and ordered two dozen, using the same logo design we had used for some knapsacks we bought earlier.

When the shirts arrived, to our dismay, you couldn’t read the logo.

It turns out that the knapsacks were brighter than the polo shirts. The thread color that looked good on the knapsacks was too dark to read on the shirts.

I called up Lands’ End. As usual, a human answered the phone even before it started ringing. I’m pretty sure that they have a system where the next agent in the queue is told to standby, so customers don’t even have to wait one ringy-dingy before they’re talking to a human.

I explained that I screwed up.

They said, “Don’t worry. You can return those for a full credit, and we’ll redo the shirts with a different color thread.”

I said, “The trade show is in two days.”

They said they would Fedex me a new box of shirts and I’d have it tomorrow. I could return the old shirts at my convenience.

They paid shipping both ways. I wasn’t out a cent. Even though they had no possible use for a bunch of Fog Creek logo shirts with an illegible logo, they ate the cost.

And now I tell this story to everyone who needs swag. In fact I tell this story every time we’re talking about telephone menu systems. Or customer service. By providing remarkable customer service, they’ve gotten me to remark about it.

When customers have a problem and you fix it, they’re actually going to be even more satisfied than if they never had a problem in the first place.

It has to do with expectations. Most people’s experience with tech support and customer service comes from airlines, telephone companies, cable companies, and ISPs, all of whom provide generally awful customer service. It’s so bad you don’t even bother calling any more, do you? So when someone calls Fog Creek, and immediately gets through to a human, with no voice mail or phone menus, and that person turns out to be nice and friendly and actually solves their problem, they’re apt to think even more highly of us than someone who never had the opportunity to interact with us and just assumes that we’re average.

Now, I wouldn’t go so far as to actually make something go wrong, just so we have a chance to demonstrate our superior customer service. Many customers just won’t call; they’ll fume quietly.

But when someone does call, look at it as a great opportunity to create fanatically devoted customer, one who will prattle on and on about what a great job you did.
4. Take the blame

One morning I needed an extra set of keys to my apartment, so on the way to work, I went to the locksmith around the corner.

13 years living in an apartment in New York City has taught me never to trust a locksmith; half of the time their copies don’t work. So I went home to test the new keys, and, lo and behold, one didn’t work.

I took it back to the locksmith.

He made it again.

I went back home and tested the new copy.

It still didn’t work.

Now I was fuming. Squiggly lines were coming up out of my head. I was a half hour late to work and had to go to the locksmith for a third time. I was tempted just to give up on him. But I decided to give this loser one more chance.

I stomped into the store, ready to unleash my fury.

“It still doesn’t work?” he asked. “Let me see.”

He looked at it.

I was sputtering, trying to figure out how best to express my rage at being forced to spend the morning going back and forth.

“Ah. It’s my fault,” he said.

And suddenly, I wasn’t mad at all.

Mysteriously, the words “it’s my fault” completely defused me. That was all it took.

He made the key a third time. I wasn’t mad any more. The key worked.

And, here I was, on this planet for forty years, and I couldn’t believe how much the three words “it’s my fault” had completely changed my emotions in a matter of seconds.

Most locksmiths in New York are not the kinds of guys to admit that they’re wrong. Saying “it’s my fault” was completely out of character. But he did it anyway.
5. Memorize awkward phrases

I figured, OK, since the morning is shot anyway, I might as well go to the diner for some breakfast.

It’s one of those classic New York diners, like the one on Seinfeld. There’s a thirty page menu and a kitchen the size of a phone booth. It doesn’t make sense. They must have Star Trek technology to get all those ingredients into such a small space. Maybe they rearrange atoms on the spot.

I was sitting by the cash register.

An older woman came up to pay her check. As she was paying, she said to the owner, “you know, I’ve been coming here for years and years, and that waiter was really rather rude to me.”

The owner was furious.

“What do you mean? No he wasn’t! He’s a good waiter! I never had a complaint!’

The customer couldn’t believe it. Here she was, a loyal customer, and she wanted to help out the owner by letting him know that one of his waiters needed a little bit of help in the manners department, but the owner was arguing with her!

“Well, that’s fine, but I’ve been coming here for years, and everybody is always very nice to me, but that guy was rude to me,” she explained, patiently.

“I don’t care if you’ve been coming here forever. My waiters are not rude.” The owner proceeded to yell at her. “I never had no problems. Why are you making problems?”

“Look, if you’re going to treat me this way I won’t come back.”

“I don’t care!” said the owner. One of the great things about owning a diner in New York is that there are so many people in the city that you can offend every single customer who ever comes into your diner and you’ll still have a lot of customers. “Don’t come back! I don’t want you as a customer!”

Good for you, I thought. Here’s a 60-something year old man, owner of a diner, and you won some big moral victory against a little old lady. Are you proud of yourself? How macho do you have to be? Does the moral victory make you feel better? Did you really have to lose a repeat customer?

Would it have made you feel totally emasculated to say, “I’m so sorry. I’ll have a word with him?”

It’s easy to get caught up in the emotional heat of the moment when someone is complaining.

The solution is to memorize some key phrases, and practice saying them, so that when you need to say them, you can forget your testosterone and make a customer happy.

“I’m sorry, it’s my fault.”

“I’m sorry, I can’t accept your money. The meal’s on me.”

“That’s terrible, please tell me what happened so I can make sure it never happens again.”

It’s completely natural to have trouble saying “It’s my fault.” That’s human. But those three words are going to make your angry customers much happier. So you’re going to have to say them. And you’re going to have to sound like you mean it.

So start practicing.

Say “It’s my fault” a hundred times one morning in the shower, until it starts to sound like syllabic nonsense. Then you’ll be able to say it on demand.

One more point. You may think that admitting fault is a strict no-no that can get you sued. This is nonsense. The way to avoid getting sued is not to have people who are mad at you. The best way to do this is to admit fault and fix the damn problem.
6. Practice puppetry

The angry diner owner clearly took things very personally, in a way that the locksmith didn’t. When an irate customer is complaining, or venting, it’s easy to get defensive.

You can never win these arguments, and if you take them personally, it’s going to be a million times worse. This is when you start to hear business owners saying, “I don’t want an asshole like you for a customer!” They get excited about their Pyrrhic victory. Wow, isn’t it great? When you’re a small business owner you get to fire your customers. Charming.

The bottom line is that this is not good for business, and it’s not even good for your emotional well-being. When you win a victory with a customer by firing them, you still end up feeling riled up and angry, they’ll get their money back from the credit card company anyway, and they’ll tell a dozen friends. As Patrick McKenzie writes, “You will never win an argument with your customer.”

There is only one way to survive angry customers emotionally: you have to realize that they’re not angry at you; they’re angry at your business, and you just happen to be a convenient representative of that business.

And since they’re treating you like a puppet, an iconic stand-in for the real business, you need to treat yourself as a puppet, too.

Pretend you’re a puppeteer. The customer is yelling at the puppet. They’re not yelling at you. They’re angry with the puppet.

Your job is to figure out, “gosh, what can I make the puppet say that will make this person a happy customer?”

You’re just a puppeteer. You’re not a party to the argument. When the customer says, “what the hell is wrong with you people,” they’re just playing a role (in this case, they’re quoting Tom Smykowski in the movie Office Space). You, too, get to play a role. “I’m sorry. It’s my fault.” Figure out what to make the puppet do that will make them happy and stop taking it so dang personally.
7. Greed will get you nowhere

Recently I was talking with the people who have been doing most of the customer service for Fog Creek over the last year, and I asked what methods they found most effective for dealing with angry customers.

“Frankly,” they said, “we have pretty nice customers. We haven’t really had any angry customers.”

Well, OK, we do have nice customers, but it seems rather unusual that in a year of answering the phones, nobody was angry. I thought the nature of working at a call center was dealing with angry people all day long.

“Nope. Our customers are nice.”

Here’s what I think. I think that our customers are nice because they’re not worried. They’re not worried because we have a ridiculously liberal return policy: “We don’t want your money if you’re not amazingly happy.”

Customers know that they have nothing to fear. They have the power in the relationship. So they don’t get abusive.

The no-questions-asked 90-day money back guarantee was one of the best decisions we ever made at Fog Creek. Try this: use Fog Creek Copilot for a full 24 hours, call up three months later and say, “hey guys, I need $5 for a cup of coffee. Give me back my money from that Copilot day pass,” and we’ll give it back to you. Try calling on the 91st or 92nd or 203rd day. You’ll still get it back. We really don’t want your money if you’re not satisfied. I’m pretty sure we’re running the only job listing service around that will refund your money just because your ad didn’t work. This is unheard of, but it means we get a lot more ad listings, because there’s nothing to lose.

Over the last six years or so, letting people return software has cost us 2%.

2%.

And you know what? Most customers pay with credit cards, and if we didn’t refund their money, a bunch of them would have called their bank. This is called a chargeback. They get their money back, we pay a chargeback fee, and if this happens too often, our processing fees go up.

Know what our chargeback rate is at Fog Creek?

0%.

I’m not kidding.

If we were tougher about offering refunds, the only thing we would possibly have done is pissed a few customers off, customers who would have ranted and whined on their blogs. We wouldn’t even have kept more of their money.

I know of software companies who are very explicit on their web site that you are not entitled to a refund under any circumstances, but the truth is, if you call them up, they will eventually return your money because they know that if they don’t, your credit card company will. This is the worst of both worlds. You end up refunding the money anyway, and you don’t get to give potential customers the warm and fuzzy feeling of knowing Nothing Can Possibly Go Wrong, so they hesitate before buying. Or they don’t buy at all.
8. (Bonus!) Give customer service people a career path

The last important lesson we learned here at Fog Creek is that you need very highly qualified people talking to customers. A salesperson at Fog Creek needs to have significant experience with the software development process and needs to be able to explain why FogBugz works the way it does, and why it makes software development teams function better. A tech support person at Fog Creek can’t get by on canned answers to common questions, because we’ve eliminated the common questions by fixing the software, so tech support here has to actually troubleshoot which often means debugging.

Many qualified people get bored with front line customer service, and I’m OK with that. To compensate for this, I don’t hire people into those positions without an explicit career path. Here at Fog Creek, customer support is just the first year of a three-year management training program that includes a master’s degree in technology management at Columbia University. This allows us to get ambitious, smart geeks on a terrific career path talking to customers and solving their problems. We end up paying quite a bit more than average for these positions (especially when you consider $25,000 a year in tuition), but we get far more value out of them, too.