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Do You Need CRM?
Among the many new buzz words to spring into
the business lexicon over the past few years is CRM, which stands for Customer
Relationship Management.
CRM can be described as a business philosophy, a software product, or as both.
As a business philosophy, CRM is the process of learning more about customers
with each interaction, and using that knowledge to ensure they are satisfied and
will continue to do business with you.
As a software product, CRM is essentially a database which gathers information
about customers and shares it throughout a company.
If we take the view that all businesses – regardless of size or type – need to
understand their customers and ensure their satisfaction, then all businesses
need to practice CRM as a philosophy.
Whether or not your business needs dedicated CRM software is another question
again.
If you’re a sole trader with, say, half a dozen regular customers whose needs,
likes and dislikes are well known to you, and you’re having no trouble keeping
up with your various interactions with them, then you probably don’t need CRM
software.
If, on the other hand, you have many potential new customers walking through the
door every day – literally in your reception area or through your sales people
on the road - then you probably do need CRM software to keep abreast of the
various customer interactions.
CRM software creates links between sales, marketing, and customer service
departments to provide a single view of each customer to all departments.
Each time anyone in your company deals with a customer, they enter the details
of that interaction into the CRM system. Those details can then be accessed by
anyone else in the company at any time so the “right hand” always knows what the
“left hand” is doing.
Here is one example of a situation where CRM software is definitely needed. The
marketing manager of a video store sends a price list to local video production
companies offering various brands of tape stock at reduced prices.
A customer calls the store to purchase stock at the reduced prices and finds out
that the people in front office know nothing about the offer - they are actually
skeptical that such an offer has been made and ask the customer for proof of the
offer. This, of course, does not go down well with the customer, who
subsequently decides never to do business with the company again.
Had the marketing manager entered the names of the companies to whom he had sent
the special price lists into a CRM system, the people in front office could have
checked this information on their screens, and the customer would have received
prompt and courteous service instead of skepticism. The result would have been a
happy customer instead of a lost one.
Even if the above misunderstanding had still taken place, timely utilization of
a CRM database might have limited the damage. An entry into a CRM system at the
store could have alerted all employees that front office had just had an unhappy
encounter with a customer, so “follow up with special offers” and “handle with
care” are recommended.
CRM software can also help improve sales by contrasting new opportunities
against deals already done so you can determine which prospects have higher
potential. Managers can check the details of each customer interaction to see
what sales representatives did in certain situations, and suggest improvements
for future dealings.
Which CRM system is best for your company? Unfortunately there are no easy
answers. Pat Nestiuk of US-based Saratoga Systems says the best way to choose a
CRM system is to ask yourself exactly what you want from it.
“Are you looking to increase sales? Have more effective support resolutions?
Obtain higher customer satisfaction - or all of the above?” he asks. “Decide
what you want to achieve then look for the system which will best help you
achieve it.”
IT experts from Gartner, the Meta Group, and Emerging Market Technologies (EMT)
suggest hiring a consultant to match your existing company processes with the
correct software. All agree that once you’ve chosen a CRM system, it’s important
to allow sufficient time for training your team members and to make sure
everyone understands the benefits of using the system.
Nestiuk says one of the main reasons why many CRM projects fail is because
participants don’t fully understand the company-wide benefits that can result
from them.
“Successful CRM is founded on excelling in two areas – understanding your
customers and focusing your operations to serve them through all points of
contact,” he says.
Useful Web resources include:
CRM Forum
CRM Daily
CRM Guru
CRM Magazine
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