CRM - Customer Relationship Management

"How To Choose and Implement A Solution For Your Business"

Introduction

CRM, or customer relationship management, is a date and information management system that integrates planning, scheduling and the control of pre-sale and post-sale activities within businesses. It helps combine technology and business strategy to support business and customer relationships, and to help businesses develop and implement go-to-market strategies.

CRM systems can store information related to customer's habits, history, and behaviors that can give you insight into:

• Ways to increase efficiencies
• Productivity improvements
• Enhance relationships
• Market share gains
• Review of financial situations
• Operational improvement

History of CRM

Before the introduction of CRM systems, customers would buy from a company and little was done to track the engagement, maintain ongoing customer records, or enhance the customer relationship. Many companies didn't understand the benefit of the data they were collecting and how it could help them better cater to their customer's needs.

With the introduction of the information age in the late 1980's, customers were given new capabilities to make better decisions about which companies they would most like to buy from. At the same time, global competition made it easier for companies to switch suppliers if they were not happy.

For these reasons and others, companies started to look at the data they had collected about their customers. They looked for ways to turn it into information they could use in a consistent way for a competitive advantage. Initially, it was referred to as database marketing or data mining.

Some of the first attempts lead to the creation of customer focus groups. These focus groups would gather occasionally to give feedback to companies about what was working well, and what issues and concerns the customers and users had.

Even though companies were collecting data and information through user groups and surveys, they did not have an efficient method of processing and analyzing it. Companies wanted to see the following data points on a real time basis:

• What customers had purchased from them
• How much they had spent
• What they did with the products they purchased
• Who had been contacted within the customer
• What new opportunities were available and being competed for
• What the customer satisfaction concerns were

In the early 1990s, a number of software functionality advances were created that gave companies the capability to better analyze their data and create better reporting. It was during this time the term customer relationship management came into being. This new software functionality allowed companies to gather information for their own benefit, and to provide additional value to their customers. This new information capability gave companies improved views of their customers. They were able to better communicate with and penetrate accounts, enhance customer satisfaction, and build loyalty with their customers.

Along with these new capabilities came increased complexity. Numerous implementation considerations, and higher costs came with the advances. Initially systems were designed for large in-house server based applications. Next came more personalized and smaller systems. Both the large systems and smaller systems are now available in both Internet-based, and client-based formats.

With the new economy of scales, fully functional packages are now available for small businesses.

Potential Benefits of CRM

Implementing a customer relationship management solution might involve considerable expense and time. There are however many potential benefits:

• Development of better relationships with your customers
• Increased sales
• Understanding of historical trends
• Better understanding of customer requirements
• Increased profitability
• Cross selling of products and services
• More effective marketing communications
• More personal approach in dealing with customers
• Increased customer satisfaction and retention
• Reduced costs associated with support and service
• Increased efficiencies and effectiveness

Not all of these benefits will be realized immediately, but strive to continually make your CRM system more valuable to your company each year. Once you start looking after your existing customers more effectively it will give you time to find new customers and expand your market. The more you know about your current customers, the easier it will be to identify new prospects and new potential customers.

Selecting a CRM

Selecting a solution for your company involves much more than just evaluating the feature and function set. You should consider the following:

• Data input and retrieval
• Integration with your current systems and processes
• Ease-of-use
• Analytics
• Reporting
• Back end data management
• Flexibility

In addition, pay attention to the following business impact issues:

• Integration into your company's business strategy
• Integration with partners and other stakeholders
• Market presence of the supplier
• Your expected productivity improvements
• The impact on your operations
• Projected profitability and ROI
• The impact it will have on your company's culture, and philosophy

Make certain your goals for the system are realistic. Involve employees who will be using the system. Their input and buy-in is critical. Avoid systems that have too many unnecessary features. Try to get a solution that functions best for the way you do business and the way you support your customers.

Partner Considerations - PRM

There are additional considerations if you are planning to use the package with your channel partners. Partner relationship management systems (PRM) must take into account multiple sources of information and input. Customer ownership, system access and report generation all require additional considerations. These can be further complicated if you are engaged in two tier distribution.

Most of the better applications in the marketplace today take into account the unique nature of PRM. Make certain you explore this aspect of the solution if you plan to use it with third party channels. Even with a PRM application built in, it can mean added complexity and effort.

Implementation and Usage

Proper implementation and usage of your system is critical for both small and large businesses. The vision of what a CRM package can do for your company can be intoxicating. But the reality of unforeseen startup risks, negative consequences, and administrative impact can be disastrous and bring a business to a halt.

One strategy is to talk to companies who have purchased and implemented your system already. Make certain they are successful using the package. Ask them for their satisfaction level and advice to make your implementation go smoothly.

Whatever system you choose, the chances are high that you will need to do some customization and modification to make it right for your business. Try and do as few modifications as possible. They will cost you additional money and make your system harder to document and support.

You might decide to use a company to help you integrate the solution. Interview several companies expert in the solution you are considering, before you select one to help you. Check their referrals and do your due diligence. Ask both other users and integrators for strengths and pitfalls of the solution you are considering. Getting the correct system and a professional integration into your business can be a good investment.

Diagram your workflow and data input. Minimize unnecessary touch points and usage, by prioritizing the critical data and information for your business. Do not try to capture every piece of information that is available. Doing this will help your system become more user friendly and employees will be more willing to use the system properly.

Plan to roll out your system usage gradually with partial functionality to start with. Decide what critical information is needed initially. Focus on getting those areas up and running first. Start small so you don't overwhelm the people using the application.

Remember, if the CRM system is not used correctly, the data input will be lacking in content and accuracy, and the value delivered will be greatly diminished. Add functionality once you have the initial modules working properly.

Training is a big factor in the success of your system roll out. Use proper change management techniques when bringing the program online in your company. Going from no CRM system, to using one, is a big step and a big change for most companies. Train and inform your people both on the technical and functional aspects of the system, as well as the business reasons for using it, and the resulting benefits expected.

Conclusion

In conclusion, a good CRM can be a real benefit to your company. Your CRM systems not a static system. It is dynamic. It will change and grow over time and with usage.

Use the information in this article to get started. Then continually review, revise and refine to make certain you are servicing your customers and your business.

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