This article appeared on ConnectingIndustry.com

Rakesh Kumar, global industry product director of manufacturing for Microsoft Dynamics ERP, looks at how manufacturers can derive competitive advantages using customer relationship management (CRM). Customer relationship management (CRM) means different things to different companies and to individuals within the company. Companies in different industries also perceive CRM in avariety of different ways. The consumer banking industry, for example, has widely different CRM perspectives in comparison to those in the manufacturing sector. Without a doubt, CRM provides a combination of business strategies and information technology systems across all industries that deliver real-time customer intelligence to employees and help boost sales, streamline services and optimise the marketing mix. However, the manufacturing industry can take advantage of CRM in ways that are tailored to its own industry needs. Done right, CRM can help manufacturers develop the right relationships, guard against making the wrong ones and help the business to be more profitable in today’s global economy.

Empower customers

Leveraging the power of CRM, the manufacturing industry is leading a strong trend in empowering its customers. For example, customers engaging with consumer electronics manufacturers can configure their end products prior to ordering through the manufacturers’ websites. Likewise, many automotive service companies these days allow their customers to make appointments through their websites. In fact, customers can not only make appointments, but can also view their past vehicle maintenance records. It is a win-win situation for both parties. These types of interactions not only empower customers but also provide real time visibility. Manufacturers, on the other hand, are also able to capture vital customer data through this process, enabling them to offer better choices to their customers.

Become a trusted partner

CRM is helping the manufacturing industry to understand customer requirements better. In many situations, it is important for manufacturers to know not only the requirements of their customers but also the customers’ customers. A good example of this is semiconductor chip manufacturers who supply chips to mobile phone manufacturers, who in turn sell the mobile phones to the customers via distribution channels. The first signs of any potential problems in the quality of the mobile phone chips come from end customers and in order to provide a rapid response, a number of chip manufacturers are deriving significant competitive advantages through a tighter integration of their CRM systems with those of the mobile phone manufacturers and their distributers.

Likewise, similar steps are also being taken by manufacturers producing products which have safety or product recall implications such as food products, pharmaceuticals and auto components. In cases of product safety/recall, manufacturers can reach the affected consumers directly in a very short time. These proactive actions are only possible through the strong functionalities in the CRM/Enterprise Resource Planning (ERP) systems and are expected to be a significant competitive differentiator for manufacturers.

Centralise customer information

Start simple. Ask yourself a single question, “Where do I go to find the most up-to-date information about our customers?” If your answer begins with the phrase “It depends”, you are not alone.

It is not uncommon for manufacturers today to have customer information stored within 10, 20 and even 30 applications. From spreadsheets to contact databases to billing systems, customer data can be stored just about everywhere and manufacturers are investing significantly towards building a centralised view of this information to manage right relationships. CRM solutions are designed for the unification of customer information, but by themselves they do not solve the problem. Manufacturers are therefore increasingly realising that CRM needs to integrate well with other business systems, especially ERP, to ensure there is an overall business strategy approach to managing customers based on the products and services sold.

Multi-mode customer service

Traditionally, customer service related requirements for customers of the manufacturing industry are more complex than those in other industries mainly due to the fact that there are simply too many variables.

In order to address these challenges, manufacturers continue to adopt various options. While smaller manufacturers tend to have a centralised customer service operation, larger ones are exploring service models whereby multiple service centres are created across times zones. A unified customer service operation providing a 360 degree view of customers is still evolving, even though individual business/technical components supporting IM, voice, email, business intelligence, portals, knowledge base and product quality data already exist. For most manufacturers, this continues to be a significant area of investment as it not only improves customer satisfaction, but also provides additional opportunities for cross-sell or upsell. Newer CRM versions are also emerging that leverage behavioral as well as business intelligence based on transactional data.

Find more high-value customers

The key to business success today is the same as it was five years ago – do more of what you are good at, less of what you are not good at. With CRM/ERP as a strong backbone, manufacturers can amplify the impact of sales and marketing operations by simply showing customers what ‘good’ looks like.

Enabling sales teams to spend time with the right type of customer and equipping marketing with a target prospect profile all help to streamline the focus and simplify the targeting exercise within each line of business.