Are you ready for CRM? 7 ways to
Knowing your customers and their
needs as thoroughly as possible is central to any business. And
that's the very point of customer-relationship management
software, which is sophisticated business software commonly
known as CRM.
For those unfamiliar with the term,
CRM gathers significant points of information about customers,
including sales data, shopping preferences, contact information and
other data, for use in better serving them. As a clearinghouse,
Microsoft Business Solutions CRM and its various competitors are
designed to make that information easier to manage and as useful as
But, is CRM for everyone? How can
you tell if your business is ready to move up to a CRM system or if
the time and expense might be misdirected?
Here are seven issues that may hone
How different are your customers?
Consider the people who buy your product or service. Are they spread
across a wide geographic area or are they relatively confined to one
spot? How about age range, average size purchase and other factors?
If your customers are fairly uniform, CRM may not be critical simply
because there's not a lot of demographic data that mandates
organization. On the other hand, if they're across the board, CRM
may be the answer to a data management prayer. "The purpose of the
software is to manage what can't be managed well otherwise," says
Jeff Tanner, professor of marketing at Baylor University's Hankamer
School of Business. "That implies a certain level of complexity.
How often do they buy something?
If so, what? This addresses
two additional elements of the complexity of your customer data. If
yours is a business that sells only a limited number of items, or
items that tend to last, tracking buying habits may not be much of a
headache. An example is a home heating store with furnaces that last
20 years or longer. But, if customers buy on a fairly frequent basis
¡X or buy a variety of products ¡X CRM can be essential in knowing
who's buying what, how often and those times of year when those
purchases are likely to occur.
Do you need help in watching
overall trends? When
considering CRM software, many businesses simply are unsure whether
they're doing a good job keeping track of their customers or not. A
good way to gauge that is the big picture. Are your average
transactions going up and down? How about customer satisfaction? Are
your marketing campaigns effective or off-target? There may be any
number of reasons, but one may be customer information that's become
too unwieldy to handle effectively. "Those things will tell you if
the customer thinks you're doing a good job of managing information
well," Tanner says.
Need help watching for internal
competition or needless duplication?
One reliable sign that CRM software may make sense is a company that
repeatedly trips over its own feet. For instance, a sales prospect
will likely be put off by calls from two salespeople within the same
company. That kind of needless competition and duplication can be
all too common in firms with multiple locations ¡X a headache that
can be better coordinated with CRM software. "Manufacturing and
semiconductor companies end up competing for the same jobs because
they have national and international branches," says Elaine Bailey,
chairwoman and chief executive officer of Escend, a Mountain View,
Calif., company that helps businesses in those sectors implement CRM
How do you communicate with
customers? Many would argue
that a certain threshold in number of customers mandates a CRM
system, be it 500, 1000 or whatever. But arbitrary levels like this
are generally meaningless. For one thing, different companies and
people will have a different feel for what's really manageable. Far
more important is how you keep in touch with customers. If it's
simple, then CRM may be unnecessary. But, if it's through varied
means, ranging from face-to-face conversation to phone or Internet
contact, a CRM system may be invaluable in keeping customer
communications focused and organized. "If you have multiple
channels, CRM enables you to cross-talk ¡X manage conversations even
though the customer may be communicating through several different
channels," Tanner says.
Can you and will you (and your
employees) use it? If CRM
software seems a good bet, first make certain that it will
coordinate with existing software. Nothing can prove a bigger
headache than CRM software that can't access sales data from another
program. And, be sure all employees know how to use the system and
value its importance. CRM's varied advantages ring hollow if no one
takes the time to enter the necessary information. "It's important
that you communicate how important it is for all affected employees
to use the application and share data," says Gordon Bridge,
president of CM IT Solutions, an Austin, Texas, company that helps
small businesses with technology solutions. "It should be made part
of all new employee training."
Will it enhance your customer
relationships ¡X and not change them?
You can never assume that using CRM software is the end all to
relationships with customers. Granted, it can prove valuable in
knowing who your customers are and how to better address their
needs, but you can't toss aside age-old principles of getting to
know your customers personally and offering a one-on-one commitment
to top-flight service. "While software can make it easier as it
relates to purchase trends, it can never replace the warm caring
smile and a personal familiarity with a customer's needs," says
author, marketing expert and consultant Shel Horowitz. "That's the
willingness to go the extra mile."