What is CRM?

The Who, Why and What of CRM

This article is designed for people who are new to CRM or who are considering using CRM Software for the first time. It explains what CRM is, how CRM helps companies, and how to choose the right CRM for your business. We hope you find it useful.

What is ‘CRM’?

Let’s start with the basics: what does CRM mean? Well, CRM stands for Customer Relationship Management. It’s the process of managing the relationship between your business and the various companies and contacts that you deal with.

When people talk about CRM they usually mean CRM Software rather than the actual process or strategy of managing business relationships.

What is CRM Software?

CRM Software is an application used to track and manage the interactions between your business and the companies and contacts that you deal with.

At the core of a CRM system is a Contact Management database containing details of all your companies, contacts and communications.

The difference between CRM and Contact Management is that CRM provides additional functionality to manage specific types of processes within your organisation, for example to manage sales opportunities or respond to customer service enquiries.

What companies use CRM?

Organisations of all shapes and sizes use CRM software, from small businesses through to large multinationals. CRMs are primarily used with the Sales and Support teams of a business. CRMs may also be deployed within internal departments such as an HR Service Desk, Facilities Management or IT Helpdesk where the ‘customers’ are your own employees.

CRMs are also widely used in the Public Sector and other Not For Profit organisations. In this scenario, the customer includes local citizens and businesses as well as other organisations, such as the Police or Health Trusts. The Public Sector is under increasing pressure to provide high quality services with limited resources and CRMs can help drive up efficiency and overall productivity.

Why use CRM?

For a commercial organisation the ultimate purpose of CRM Software is to increase profits. This is achieved by increasing sales revenues whilst driving down costs.

Costs are driven down because a company can handle more enquiries, more efficiently with less people. Inbound email management and outbound transactional emails are a good example of a CRM technology that speeds up the day-to-day handling of enquiries, reducing errors and ensuring a consistent quality of response.

Sales revenues can be increased through effective sales lead management which can drive up new business sales. Indeed, many people only think of Sales Force Automation (SFA) tools and Lead Management when considering the scope of a CRM project.

For many companies, however, a significant proportion of sales revenue comes from cross-selling into existing accounts and through repeat business and contract renewals. Good customer service and high levels of customer satisfaction are therefore a vital factor in maximising revenue from existing customers.

Service management is often overlooked in the scope of a CRM project and it is not uncommon to find the sales team and customer service teams using separate systems. Without visibility of important customer service issues, the sales team may lose vital repeat business or miss opportunities to cross-sell additional services, such as training.

Why do we need a CRM?

Most people start by managing their customer data and processes with a combination of spreadsheets and emails. For a sales person or customer service representative working in isolation, this is fine.

Problems arise, however, once the data needs to be shared within the organisation or accessed remotely. Spreadsheets cannot be updated by more than one person at a time. This causes people to maintain their own individual copy of the spreadsheet, which in turn leads to duplication, inconsistencies and errors. Producing management reports in turn becomes time consuming and a burden as data is consolidated into the Sales Manager’s or Service Desk Manager’s own master spreadsheet.

Sharing data is not just required for reporting purposes but also for the day-to-day management of customers. Problems arise and customer satisfaction can drop if your teams are not aware of one another’s actions. A customer’s perception of a company quickly drops if for example they receive a sales call from one sales person and then receive the same call days later from another sales person. More tangible problems can occur however, if, for example, a sales person is unaware of customer support issues that may be affecting future repeat business or renewals.

As the volume of sales or support enquiries increases so does the risk of missing or forgetting an enquiry. CRMs can help by ensuring that emails and web forms received are automatically logged in the system and assigned to an appropriate team member. This, combined with an audit trail ensures accountability for all interactions with your customers. CRMs help to ensure a sense of ownership of the customer and enquiries that, in turn ensures a high level of customer service.

How to choose the best CRM for your business?

The best course of action is to test some products. Most CRM vendors offer free trial software. This gives you the opportunity to try the software in the normal situations that you might use the software (e.g. office PC, home laptop, on the road) and check that the performance and accessibility is ok.

We recommend that you try to enter some real life data into the system e.g. some new sales leads and support enquiries. If the system doesn’t quite allow you to enter the data as you wish then check with your vendor to see if the product can be easily customised to meet your requirements.

If your company deals with a high volume of email or web enquiries then it is important that you test the product’s capability to process such enquiries. Managing enquiries efficiently can lead to big productivity gains and reduce errors and omissions. Speak to your vendor if you need assistance with website integration – they should be happy to help.
You will most likely have existing data in the form of spreadsheets or emails. Check with your vendor whether this data can be imported and ask for a sample to be uploaded so you can see for yourself. It is important that you don’t lose your historical information.

Once you have some data in the system you should verify that the system is easy to use on a day-to-day basis and that you have the reports that you need. Again, your vendor should be able to help you with any questions you may have. Finally, it is important that your system is adopted by all users and branding the system with your company logo and colours can help increase a sense of ownership amongst your team.

Date: 16th May 2013

Author: Duncan Gillingwater





Posted in CRM