Introduction

Every organization no matter the size can benefit from Customer Relationship Management. Customer Relationship Management (CRM) is class of software that encompasses all interactions an enterprise will have with its customers from lead acquisition to client retention. CRM typically produces an wholistic view of a customer including sales, service and marketing information. CRM will manage a customer through its entire life cycle including lead generation, prospect qualification, opportunity management, client conversion, and customer satisfaction. There are many excellent CRM systems in the market for every size organization. Many of these CRM systems are focused on specific industries such automotive, financial, healthcare, and home builders. These vertical CRM systems are already customized to fit the specific processes of these industries.

Here are some typical reasons an organization might think about implementing CRM.

• To make the customer experience better and improve satisfaction.
• To provide the same view of a customer across the organization.
• To make it easier to sell additional products and services to current customers.
• To create a consistent and measurable sales process with insight for management

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Top Reasons for CRM

Reason 1: Improve Customer Experience and Raise Customer Satisfaction
This relates directly to the fact that it is costs significantly less to keep a customer than it does to find new customers. It can also be stated that it is cheaper to extract more value from a customer than to acquire new clients. Companies want their customers to be happy for obvious reasons. Companies realize that this is not an easy task with so many different client interactions and complexities in processes.

Reason 2: Centralize Customer Information
Having information about your customers in several different systems makes it difficult for the entire organization. It makes it especially burdensome for anyone on the phone with a client dealing with an immediate need. There are also inherent problems with keeping information updated, if it is scattered throughout the organization. Having centralized information also reduces errors and removes the need for unnecessary integrations.

Reason 3: Identify Opportunities to Sell More
As mentioned, it is easier to extract more business from current clients than to create new clients. By maintaining a whole view of customers and their interactions, a company should be able to look at buying behaviors, product gaps, and consistent service issues. All of this information should allow a company to sell more to their clients. Additionally, if company representatives have immediate access to customer information, they should be able to make decisions while interacting with customers about additional products or services to pitch.

Reason 4: Create a Measurable Sales Process
Company management needs to be able to effectively measure the success of their sales processes. This will allow decisions to be made about money being spent on marketing campaigns as well as how to handle sales compensation. These are nearly impossible to achieve if that information is not captured in a consistent manner.

 

Customer Retention The Real Value of CRM

Keeping Clients
It is a fairly common fact that it is significantly less expensive to keep a client than it is to replace that client through marketing and lead development. Because of its central focus on the customer, CRM naturally protects the customer relationship. For example, if a customer service call comes in from a client the rep can quickly obtain a complete history of that client and better respond to the issue. Additionally, follow ups and workflows can be put set that will keep the customer from falling of the radar.

Expanding Customer Relationships
Typically, when you go to the doctor's office for a physical, the doctor needs to have a fairly complete history of your health in order to properly evaluate and make recommendations. A good CRM system will provide this type of information for each of your customers. This will not only allow you to track and diagnose issues, but also to proactively look for recommendations to expand the relationship. Another name for this viewpoint is Customer Lifetime Value.

 

Sales Pipeline An Area of Focus

Sales Process 101
Even though customer retention is cheaper than customer acquisition, an organization cannot ignore the need to continually get new leads. There are many different ways that a company can structure its sales process to capture leads, qualify them, then eventually convert them into satisfied customers. This process can also be called the Sales Pipeline. A good CRM will allow a company to flexibly structure its sales process through natural workflows in the system.

The Need for a Forecast
Too often the focus of a CRM is either about how many prospects are converting or how many total leads a marketing campaign is generating. These views are too limited and cannot properly gauge the success of the sales process. These events must be looked at as a continuum where they are connected. By viewing the entire process as the Sale Pipeline, management can accurately judge how the business is doing and quickly adjust if there are issues. One of the key measurements is the Sales Forecast, or simply how much new business should occur in the next several months. By knowing this information, decisions can be made as to staffing, resource availability, and project scheduling.

How Accurate Is the Forecast?
Weather forecasts are not 100% accurate and get better the closer the date is. It is the same with Sales Forecasts. This does not make them any less valuable for an organization. CRM should enable a company to continually refine the sales process so the forecast constantly gets more accurate. By maintaining historical information related to the sales cycle, CRM allows a company to see the typical patterns and time frames for leads to qualify then convert.

 

Complete Insight Into Your Business

Direct Benefit for Management
Because of the focus on frontline processes and workflow improvements, many CRM implementations miss one of most important direct benefits for management at a company. This is their ability to see a complete picture of their business. All of that rich data about key metrics like customer satisfaction, marketing campaign effectiveness, conversion rates, and customer lifetime value are all natural results of a good CRM.

Garbage In = Garbage Out: The Quick Road to CRM Failure
There is one major note of caution. CRM is one of those systems where, if only half the people are using it properly, then all the system is ineffective. If key salespeople are keeping valuable information about customers in other places such as spreadsheets or their personal email, then the rest of the organization suffers. If someone is handling a service issue for a customer but is unaware of a pending deal, the results could be disastrous. Management should make CRM compliance and data quality part of their performance management measurements.

 

CRM Done Properly

While CRM is a necessary tool for today's business environment, each enterprise must take special care when implementing or utilizing a CRM. CRM is a comprehensive system with numerous dimensions that impact every part of an organization. Organizations should first identify what business outcomes they are trying to achieve before starting or continuing with a CRM system. Once these goals have been clarified, each stakeholder in the organization must be engaged. This will ensure that all the processes are properly represented in the CRM system and that the eventual users of the system buy into it at an early stage.

The first question for each functional area manager is "What reporting will you look to get out of the system." This information will inform the process while allowing the system to capture the relevant data for these measurements.

Look for easy gains in areas such as centralized contact management, marketing campaign management and service desk automation. By moving these features ahead, user adoption of the system will continue to expand.

Social networking is becoming a more integral part of CRM. When implementing a CRM, consider how information like what is found in Linked-In, Twitter and Facebook affect your interactions with customers.

 

Summary

Customer Relationship Management is a comprehensive solution that addresses many of the needs companies face in the current business environment. As the name states CRM focuses on the relationship with the customer. This is accomplished by maintaining all interactions with the customer in a central place that everyone can access. This not only enables a company to better service customers, CRM also makes it easier to identify additional sales opportunities. Organizations will be able to better see how all the aspects of the business are performing and predict where business is going. The bottom line is that companies with more than one client need view CRM as a fundamental component of their business.