CRM – Customer Relationship Management
CRM is rapidly becoming a buzzword again, over the years it seems to go in and out of style.
One of the most important aspects to the success of any business, or organisation is how it utilises its most precious resource Clients. We all know that it takes around 10x the effort to sell to a new customer than it does to sell to someone that has already bought from you Why? Its obvious, the risk that the existing customer perceives is lower because they already know what they are going to get hopefully a good thing!
What should they do?
So onto the subject of this essay, CRM systems. What should they do?
Firstly lets look at what they wont do for you. Over the years I have seen many organisations that just assume that once they have a CRM system in place, all of their problems will be solved, The thinking is inevitably that customer satisfaction will increase and as a result sales will improve. These companies tend to purchase CRM systems on the feature list, optimistically believing that all their employee's will 'see the corporate vision' and will immediately change their working practices to improve the performance of the company. I think of this as Praying to the God of CRM through the Commandments of the Feature List. Its a Faith based activity in which Marketing Acolytes of the particular CRM would have you believe.
Whilst I'm sure that this can sometimes work, particularly with small companies up to 5 or 6 people, its is always best to understand what the CRM is going to do for you before you purchase.
Real Time Information
My view on CRMs is that it is all about real-time information for the organisation and how it will be used in your business process flows. These process flows don't necessarily have to be formal but you really should understand how it is you do 'your thing'. If you don't understand your process flows and outcomes then all you can do is buy a CRM based on its features and cross your fingers.
Manual Intervention Costs Money
This is because every single time there is a manual intervention in the management of your data, it costs you dearly. Let me give an example, it's extreme but it should get you thinking. A company of approximately 70 people had a fantastic CRM system and also a fantastic stock and accounting system. The sales team and sales management loved the CRM as they could instantly figure out what was going on in with their customers and the finance team loved the accounting and stock package 栢ecause it allowed them to effectively manage the financial health of the company.
However the two systems were interfaced through a team of data entry clerks, re-keying data from one system to another. Before you ask this was in the 21st century! Aside from the cost of the team which including office space must have been in excess of £100,000 a year this caused massive issues for the company. Firstly the head of the data entry clerks was the company data Czar but in the worst sense of the word. That person had control over the data that finance team 'saw' and the data that the sales team entered. Pricing and ordering and invoicing in that company was a political activity and not a slick business process – I estimate in political time and 'opportunity lost' cost to have added another £100,000 to bill – Ouch!
CRMs don't tell your staff what to do!
You and your employees should be able to understand what is going on with your customers instantly when you need it. This means that the CRM system doesn't tell your employees what to do, it makes the things that should be happening, happen easily. I think of a good CRM system like fuel, you can put fuel in cars, buses, trains, boats and aeroplanes, all different but essentially doing the same thing albeit in a different way with slightly different outcomes. In this metaphor the fuel is the CRM system, the vehicle is your business processes.
Process Outcomes
When selecting a CRM you need to be thinking about your organisations process outcomes, and how the CRM can help you achieve these outcomes - Not what you currently do in order to get a outcome. Concentrating on process methodology rather than considering process outcomes is like selecting a holiday on the basis of the route rather than the destination. Here lies the next CRM trap that so many organisations fall into. Many purchasers have a CRM 'customised' because 'it doesn't suit their business'. For people selling CRMs the customisation is the 'Holy Grail' of sales opportunities because the sale repeats every-time a new version of the software is released. You end up buying the customisations over and over again or sticking with an old out-dated system.
A good CRM provides you with timely information about the important interactions with your clients. It interfaces with your email marketing system, tracks visits to your website by the seamless interface to your CMS. Integrates with your Accounting system and works with your sales management system and business workflow system.
Why should it do this? - because every-time you manually touch your data it costs you in time and money. Putting aside the fact that the data is never up to date, think about the number of manual touches of data if you have to translate data between each of the 5 systems in the previous paragraph. 5 Systems doesn't mean 5 touches of data - it's potentially 25 (5x5) because each system will probably need information from every other. In any reasonably sized organisation with 5 different systems you soon have 5 islands of data, and probably more than one data Czar, and numerous applications that attempt to move data from one system to the next. You might as well stand in your garden and barbecue fifty pound notes because that can be the cost of the wasted time and effort.
In Summary
So in summary: integrated, real-time CRM is where the money is, understand the difference between your process outcomes and the methods you use to get these outcomes and make sure that every-time you 'touch' your data it adds value, if you do all of this then rather than hindering you, your CRM can be the quintessential element of your business success.