Mar 1, 2009

What is CRM? (Contact Relationship Management)

Good customer relationships are at the heart of business success. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers to the business.  If it works as hoped, a business can:

• provide better customer service
• make call centers more efficient
• cross sell products more effectively
• help sales staff close deals faster
• simplify marketing and sales processes
• discover new customers
• increase customer revenues

That sounds Great, but how does it happen?
It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate financial and banking products like mortgages or IRAs to them at the right time to fit their needs.

Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, websites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts.

Solid CRM systems link up each of these points (like BestFit Business Manager with GoldMine). This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better, or more, services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each and every time it has any contact with him or her by any person in the orginization.

Are there any indications of the need for a CRM project?
Not really. But one way to assess the need for a CRM project is to count the channels a customer can use to access the company. The more channels you have, the greater need there is for the type of single centralized customer view a CRM system can provide.

How long will it take to get CRM in place?
A bit longer than many software sales people will lead you to think. Some vendors even claim their CRM "solutions" can be installed and working in less than a week. Packages like those are not very helpful in the long run because they don't provide the cross-divisional and holistic customer view needed. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components.

If a company is just starting with a CRM project, what should they do?
If you're just starting out, you want to build you're requirements first.
Define the problem, understand what's going to solve that problem and understand the functionality of that solution.

In other words, in order to increase your number of marketing campaigns this year, you are going to need individual customer profiles. That's just one example, but once you understand that it's a requirement, you can find the technologies that support that particular functionality.

That's the right way to do it:  the requirement,  the functionality,  then the tool.

Contact BestFit Solutions today to see how we can assist you in getting off on the correct path.

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