CRM in Manufacturing: Vertical Markets Spotlight
Manufacturing is one of the world’s largest and most established sectors. Worldwide manufacturing revenue grew by 4 percent in 2022 and reached $44.5 trillion, more than two times the U.S. gross domestic product. But despite the huge amount of money generated, product manufacturers have been at the back of the pack in adopting CRM solutions.
“Traditionally, few manufacturers have used CRM to automate and streamline their business processes,” says Colin Crowley, a CX adviser at Freshworks. “In fact, many manufacturers had nothing like a CRM in place.”
The market has always been cost-conscious, which made it a bit of a technology laggard.
One reason is the manufacturing market is well established, mature, and growing at a modest pace, usually low single digits. Consequently, finding funding for CRM projects has been challenging.
Data inconsistency is another problem, particularly as many departments engage with customers. Marketing teams rely on one set of solutions to create interest in company products. Sales solutions help track prospects and leads throughout the buying journey. Contact centers provide a number of support tools.
And that is not all for manufacturers. Many suppliers rely instead on back-office systems, like enterprise resource planning, to keep them functioning. A complex web of machine applications creates the products, while a series of supply chain solutions ensure that materials and goods flow as desired.
Compounding these challenges, each supplier has unique information, such as complex product catalogs that are hard to digitize, according to Crowley.
The end result is customer data scattered across the enterprise. Therefore, employees have only a limited view of clients’ histories whenever they interact with them.
THE NEED FOR A CENTRAL SOURCE OF TRUTH BECOMES CLEAR
A dramatic change in customer buying considerations is forcing suppliers to consolidate their customer information. In the past, low costs or interesting features drove purchase decisions. Now, clients, including B2B businesses, focus more on their experiences when dealing with their suppliers. Are they flexible? Do they respond quickly when support is needed? Historically, manufacturers scored low in such areas, so now they are looking more closely at technology to improve their performance.
Suppliers need a hub so team members can access and share information no matter which application the employee uses. Increasingly, CRM is becoming that place. Therefore, often the early (sometimes the first) step in deploying a CRM system is to consolidate customer information. The solution keeps track of data, like customer phone numbers, addresses, order information, sales history, complaints, demographics, service calls, and feedback. The goal is to collect it all in a central, convenient, and easy-to-access location.
The process of creating such a repository has always been difficult. “Manufacturers watch every nickel and dime, so they need a CRM system with a low upfront cost,” Crowley says.
Recent technical advances have simplified the process, though. The cloud offloads the task of running the software infrastructure from product producers to their vendors. Low-code/no-code tools reduce the time spent configuring and integrating disparate manufacturing and business applications.
Manufacturers typically have three ways to integrate customer data:
- Native integration. CRM vendors connect their systems to other applications to make them attractive to potential customers.
- Third-party tools. Independent channel partners and software vendors design solutions that connect different pieces of software.
- Application programming interface integration. Application vendors publish specifics about how their solutions work so others can more easily connect to them.
In manufacturing, the potential to connect different systems is vast. Consequently, suppliers have to establish clear parameters and not try to do too much, too quickly. “Manufacturers need to demonstrate patience with their integration work,” explains Nick Parmar, global vice president of collaboration services and business unit head at Tata Communications. “The process presents a lot of potential gotchas.”
And then, after suppliers successfully link their different systems, the next step is using CRM to improve manufacturing operations.
The central location ideally enables every transaction from every channel to become accessible to anyone who needs that information. Consequently, employees find customer information faster and more easily. Suppliers have added reporting tools and automation on top of their systems to do the following:
- schedule appointments more effectively;
- add notes relevant to each prospect for others to see;
- provide a summary of past engagements that informs staff about clients’ preferred communication channels—email, phone, chat, social media, or a face-to-face or virtual meetings;
- examine past purchases to more clearly understand the buying process;
- monitor progress and follow up on production runs; and
- conduct a deep dive into support tickets to recognize how well the contact center is functioning.
The manufacturers’ sales departments benefit from the change. Manually tracking leads and potential deals through spreadsheets is inefficient, especially as businesses grow. Often, this approach leads to communication delays, mistakes, and lost opportunities.
Manufacturing CRM systems centralize all sales conversations but still offer flexibility. Sales personnel organize customer data to their comfort levels. The modern views enable them to have spreadsheet-like, intuitive experiences. Having customer information centralized and well-documented builds customer relationships based on trust and respect; increases the chances of closing on new leads because more information is available; improves retention because staff responds to existing customers more appropriately; delivers access to historical customer data and determines when customers will order more of a certain kind of product; and identifies which customers are candidates for upselling or cross-selling.
CRM software becomes a valuable marketing and sales tool, helping suppliers gain more followers that turn into customers. CRM enables marketing, sales, and support departments to examine detailed reports illustrating customer behavior. The new insights gained lead to better outcomes. Marketing and sales operations become more efficient and effective, so the price per lead and closed deal drops.
CRM vendors have been honing their solutions so they offer manufacturers actionable data. Real-time sales and marketing reports identify bottlenecks and point to why the company wins or loses potential deals. They tell employees which sources produce the most leads; which content is producing the leads; how long the sales cycle takes; which products are selling the best and which ones they need to stop manufacturing; which distributors/dealers are high-paying; how many contracts they are winning; and which regions or industries are producing the best results.
Manufacturers examine the information and make adjustments to enhance performance. They can identify, prioritize, and qualify the most interested prospects using predictive contact scoring.
CRM solutions provide automation that streamlines business processes. Manually doing repetitive tasks slows down employees and hinders productivity. With new artificial intelligence capabilities, CRMs have the ability to automate many tasks.
For example, manufacturers can create an ad campaign based on web form submissions. Once leads fill in their details, the CRM creates a profile for each lead with their contact information. Their details are collected without manual entry. The solution also automates territory management by having the system auto-assign leads to relevant salespeople in a round-robin manner. The system then sends an email to them and generates subsequent responses, such as follow-up emails and webinar invitations, that are part of the campaign. The solution notifies team members when leads hit milestones or clients move toward possible purchases. Sales and marketing personnel create more and manage less.
And yet one more important benefit for manufacturers is CRM’s ability to add intelligence to the supply chain. For manufacturers, understanding where goods are in the supply chain is the top priority for everyone involved in product creation and delivery: employees, customers, and partners. Traditionally, visibility was quite limited because information was stored in many systems that did not talk to one another.
As businesses integrate customer information via a CRM, the pieces of the picture fit together. Knowledge is power, and employees gain more of it. Deploying a manufacturing CRM provides everyone with detailed and useful insights about inventory, order processing, warehousing, and distribution chains. Having an intelligent supply chain enables individuals and the company to manage production schedules proactively. Rather than waiting until after a problem occurs, such as a parts shortage, personnel can address the issue in real time or even beforehand. Moreover, it provides insight into material supplies, so suppliers adjust as needed and create products faster.
Nowadays, suppliers rely on many others to build their products. CRM design enables them to strengthen partner relationships and carry out these critical objectives:
- Improve rebate program attainment and visibility.
- Automate rebate calculations, accruals, and payouts, and offer greater visibility into threshold attainment for sales teams and channel partners.
- Boost ROI with intelligent analytics.
- Manage both monetary and behavioral incentives on a single platform.
- Tie actions to partner attainment, sales performance, and the bottom line.
Global competitive pressure is forcing manufacturing enterprises to reexamine their operations. Customer interactions have been a weakness for them. Deploying a CRM system provides employees with valuable insights that help the business improve product quality and manufacturing processes. With it, they streamline operations, lower costs, and increase profits.
Paul Korzeniowski is a freelance writer who specializes in technology issues. He has been covering speech technology and CRM for more than two decades, is based in Sudbury, Mass., and can be reached at paulkorzen@aol.com or on Twitter @PaulKorzeniowski.