by Edward Solomon

New York (April 1, 2004) - Customer relationship management (CRM) is more than software and processes—it’s 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 doesn’t 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 there’s 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, it’s 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 company—sort 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 contacts.

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 champion’s first job is to sell the
concept internally and assure a smooth adoption. Without adoption, CRM fails.
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; it’s up to the staff to create it.

It’s 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 FAQ’s, 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 it’s 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