Relationship Management Systems (CRM) for
Smaller Businesses - Theres
more to choosing CRM software than system compatibility
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New York Enterprise Report
by Edward Solomon
New York (April 1, 2004) - Customer relationship management (CRM)
is more than software and processesits about finding, winning,
and keeping the right customers. A good CRM solution opens up communication
channels and creates a clientfocused information base that enables your
staff to better serve your clients. By integrating your marketing, sales,
and customer service functions, a good CRM system makes it easier for
everyone inside your company to work together and share critical information.
CRM software doesnt create this culture, but enables.
CRM software is quickly becoming a mainstream business application. CRM
software vendors see the small- and medium-size business sector as particularly
attractive since there are so many of them. That means theres growing
competition among vendors for your CRM dollar, and that translates into
improved products that can do more to make your business better. With
the variety of products now available, its critical that you make
an informed decision about what can and cannot work for your business
when investing in CRM.
Practically any company that has customers can benefit. CRM makes salespeople
more efficient, gives all staff that deal with client matters access to
information to serve customers better, and gives marketing staff the tools
to manage campaigns to their greatest potential.
Choosing a System
CRM is really a group of applications, from simple contact managers to
tools for sales force automation (SFA), marketing automation, and customer
service. You can choose to use some or all of them, depending on your
business and your budget.
A contact manager, such as ACT! and Outlook, is the most basic CRM. It
enables you to share contact information among all departments of your
companysort of an electronic Rolodex.
For the vast majority of small- to midsize businesses, products like ACCPAC
CRM, SalesLogix, Onyx, and Microsoft CRM are good because they offer all
of the applications beyond a simple contact manager. One of the most important
functions is sales force automation. SFA enables management to analyze
the entire sales cycle, from first contact to final sale. It also helps
the salespeople keep track of each prospect and at what stage they are
in the sale. Or the system can perform analysis to determine which lead
is the most promising so that you can put more resources toward those
There are also "hosted" CRM applications such as Salesforce.com,
which manages CRM online. The upside of this solution is cost: you can
try it for three months to see if it is right for your company instead
of spending thousands of dollars on software licenses. The downside is
the recurring cost. Prices range from a few hundred dollars for basic
contact managers to hundreds of thousands for enterprise level CRM, such
as PeopleSoft or SAP. Good small-business CRM can be had for as little
as $69 per user per month, even less if you just focus on the SFA component,
which may be a good strategy for companies just entering into CRM for
the first time.
Succeeding at CRM
A critical requirement to guarantee success is the designation of a "CRM
Champion" within the organization. The champions first job
is to sell the
concept internally and assure a smooth adoption. Without adoption, CRM
Also, we recommend phasing in implementation of functionality so that
returns, while smaller, are more immediate.
When Etronics.com, an online electronics retailer based in Brooklyn,
implemented a CRM system, management held weekly CRM seminars aimed
at educating the department managers that sustainable growth could be
achieved only by corporate processes designed to increase service.
Management made it clear that the system only enables outstanding
customer care; its up to the staff to create it.
Its important to understand the big picture of how CRM affects so
many elements of your business, which too can be the greatest benefit
of a successful implementation. With CRM, all customer information is
centralized instead of managed in remote islands of technology that some
can access and others can't. When all employees work from the same page,
they can quickly respond to customer inquiries, quote new prospects accurately,
follow up in a productive way, and earn customers loyalty. The net
result is increased efficiency in all elements of the business.
Since it implemented CRM, Etronics has an audit trail of the interactions
between reps and customers, which has introduced the concept of accountability.
As a result they have a system to determine employee productivity, have
seen a 30% decrease in product returns, increased level of customer service,
and the average duration of service calls decreased by 45%. In addition,
they have measurable results on marketing campaigns, and by providing
automated answers to most FAQs, there has been a decrease mundane
tasks resulting in more time to focus on selling. Etronics now experiences
a significantly higher inquiry-to-sale conversion rate. In closing, remember
that CRM is not just about software. CRM software affects so many elements
of the business. For that reason its important to work with a consultant
who has worked with many clients on CRM implementations. A consultant
with this experience brings a cross-section of process knowledge, perhaps
from multiple industries and brings insights on best practices that your
internal IT staff would be hard pressed to match. There are many other
considerations when it comes to CRM. By taking a broad view of the most
critical issues first, you will be prepared to make CRM a winning component
of your business plan.
Edward Solomon is Co-President/Founder of Net@Work