The True Meaning of CRM:
CRM, or Customer Relationship Management means many things to many people, and therefore it is hard to explain it in one fashion to everybody.
Throughout my many years of experience working with different companies implementing different CRM strategies and CRM software
solutions, I have come up with few ideas that should be the basis for any company considering CRM.
While industry analysts and professionals are often saying the correct thing about CRM, they still make it harder for the average person to grasp.
So, to answer the question of what CRM is? Lets look at business realities, and conditions:
1) Every business must have customers to generate revenues.
2) Each customer costs the company an average amount of money to acquire and sustain.
3) Customers need to get their money's worth before they buy again.
4) Customers can move to other competitors if the offering is right or if they are not happy.
5) a Repeat customer costs less, since you don't have to spend the marketing money again.
From the above, we learn that the customer is the most important part of any business, competition can steel your customers if you are not proactive, and the cost of keeping current customers happy is less than the cost of acquiring new ones.
If you also consider that customers, are people and they like to be treated like ones, then you can understand the Relationship in CRM (Customer Relationship Management).
So we know the Customer, and the Relationship. The Management is your company's attitude, rules and solutions that manage the process of selling to and making customers happy.
Before you start investigating CRM software solutions, you must first understand your customers, and plan the strategies that you think will make them happy and make them repeat business. Once your strategies are in place, then you must rally your troops so your employees understand your customer centric goals. After all if your employees don't embrace the strategy, they will not embrace the system.
Once this is done, you should look for a CRM software solution that can be customized to fit with your business processes, not the other way around.
CRM software. Who needs it anyways?
In the past 20 years I have heard every argument in the book about why a company does not need a CRM system to manage customer expectations and experiences.
In many large enterprises, some departments still depend on paper-trail and excel sheets to manage customers and sales, and in many ways than one; employees are always fighting the need to change and are normally the obstacle facing management members implementing CRM strategies.
Some companies or departments within, have to deal with a handful of customers only, and maybe that explains why they believe a CRM package might not be needed.
But if you believe CRM is a database of customers, then I don't blame you for thinking your company will not require it to manage a handful of them. CRM software solutions are a platform where you keep your customers happy. A CRM system, can keep you customer information, all previous sales, service and support incidents, emails and other correspondence, interactions, issues, complaints, braises, referrals, preferences, etc.
A CRM system will give you a 360 degree view of each customer and compare it to others to create corporate knowledge and business insight. A CRM system will provide your customers with the means to collaboratively discuss their needs, goals, requirements and issues without feeling left out or neglected. A CRM system will provide the means for your customers to self-service themselves anytime, anywhere.
Every successful company is managing customers, and the resources required to accomplish such strategies will indeed cost the company many man hours, human resources and time.
If your business have customers, then you need a CRM software solution customized and configured to manage your efforts to market, sell to and support them. If your business does not have customers, then it is a hobby and therefore; no, you do not need a CRM solution!
Which CRM software is best for my business?
In most situations, companies depend on CRM consultants to find the best suitable CRM package for their business. The CRM selection process changes dramatically for each business, and what's best for one company is not necessarily the best for another.
As a CRM consultant; over the years I have learned that the winning CRM package is not the one with the most features nor is it the one with the best price. Features and prices simply don't matter anymore.
But this contradicts most situations I have dealt with, where features and prices did matter in the selection process! Hmm, let me explain.
First, a company should never set a budget for CRM, because that might restrict them from getting the CRM package that has the features they most need in a CRM. I would delay setting up a budget once I do my needs analysis.
Second, the CRM with the most features, might miss that one or tow features that are also needed the most.
The simple answer is: lets focus first on your business processes and the tools that are required to handle them. Once these requirements are established, then I would investigate many CRM vendors and request proposals.
Once you know which CRM companies have the features you need, we then create a list of features that we might or would like to have in the future. This further reduces the list of vendors to select from.
At this point, and only now your CRM budget would or should matter. Go Ahead select the best priced product.
Also before you begin the selection process you must first determine :
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CRM software-as-a-service, or on-premise?
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Do I need to integrate CRM with other in-house or web based applications?
The answers to these questions will determine which CRM company to include in your initial selection list.
On-demand CRM or traditional?
I remember a televesion advertisement for IBM, where the director was asking questions to the board. The questions were all IT related, and the answer was no, we have no issues in IT. So he said: “Why are we meeting then?”, his assistance reminded him: “We sell shirts sir!”
This ad illustrates how most companies are focusing 60% or more of their efforts on things other than their products; IT chaos for example!
If your company has a large IT team, company resources and deep pockets, then you should purchase expensive traditional on-premises (installed) CRM from ORACLE or SAP
If your company is a small or a medium size company with 500 employees or less and is eager to use a user friendly web based CRM solution for the fraction of the cost of what SAP or ORACLE will charge you, then your choices should include: Salesforce.com, Salesboom.com , Netsuite and RightNow.
Do I need to integrate CRM with other in-house or web based applications?
If you need now or in the future to integrate your CRM data with other enterprise solutions such as Accounting, Invoicing, Inventory Management, Human Resource Management, etc, then you must only select CRM software vendors that offer an API. In the case of on-demand CRM players, a web services API is always a good indication of the company's ability to integrate bi-directionally with other solutions, in-house or web based.
What is the definition of CRM 2.0?
In recent months, the buzz word “WEB 2.0” has been circulating heavily in the IT industry. This term is typically used to describe any online product or service that is being offered in a totally new fashion than before.
For Instance, in the Web 1.0 era, people used to have personal web pages, now they have BLOGS. In web 1.0, customers used to rely on forums to review products; with a web 2.0 mindset, you let them review your products on your web site.
In WEB 1.0, we used to edit our excel sheets on our desktops then upload them to a document management system online, now we use an online Spreadsheet tool, where we create, edit and share documents with anyone anywhere.
But since CRM already went online 5 years before we invented the term web 2.0, it is no longer CRM 2.0 we are talking about or is it? It's CRM 3.0!
Lets just stick with CRM 2.0 for a second though. How could you define the term CRM 2.0?
CRM 2.0
In my opinion, AJAX-style GUIs are your first hint a CRM system is 2.0 compliant. AJAX stands for Asynchronous Java Script, and is a newly coined term to describe a technology that is at least 9 years old. Anyways; basically when you are using a web based application; you don't need to refresh the pages in order to update the content.
What this means, is a lot less clicks to accomplish the same job. It also means your web based app will act more like a desktop one without the usual annoying page refreshes.
Other elements of a CRM 2.0 compliant CRM software tool is collaboration. If the CRM system offers an integrated instant messenger that facilitates communication amongst employees, customers and partners then it is sealed CRM 2.0 Compliant.
Enterprise Mashups:
If a CRM system offers a web services API and point-and-click tools to build mashups, then it is CRM 2.0 Compliant. For example, when I view a customer Account in the CRM system, I could also view a Google Map of their location, as well as a Stock chart of their public company, weather information, etc.
If an on demand CRM system uses COMET style real time messaging in the workflow engine then it is CRM 2.0 Compliant. COMET is a new term for another old technology where the online user would keep a constant connection with the server; allowing the server to send real time alerts and messages without depending on users to click or refresh the pages to see alerts.
I could go on and on, but I think this is a good work frame for CRM 2.0
How customizable is your CRM software?
While most CRM vendors offer solutions that follow industry best practices, each company's situation and processes are different.
For most vendors, customization of the CRM solution are done via complicated programming-methods to alter the CRM specifications according to the business needs.
The advent of the Internet, and the rich Internet applications brought a new level of customizations to CRM. Many on demand CRM vendors offer point-and-click configuration-based approach to customizing the CRM software solution.
The CRM system must allow system administrators to create new custom objects and tabs, rename existing tabs, add custom fields, customize the views, search and reports; customize business charts and dashboards, be able to customize the workflow engine, user login preferences, calculated fields (formula fields), custom layouts, custom user profiles, record and field level security and other customizations.
While on-demand CRM is a lot more cost effective than on-premise solutions; it is a lot easier and cheaper to customize as well.
Some of the on demand vendors will restrict customization tools to the most expensive editions such as Salesforce.com, some will not allow you to turn some TABS off like Netsuite, and others will provide an AJAX tool to configure the entire CRM system in real time like Salesboom.com
Most of these vendors offer a time-sensitive free web tiral, and some customizations can be tested live. Make sure you, your team and your CRM consultant is aware of this.
March, 2007
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