How to Implement a CRM System

by Nowshade Kabir

Published on this site: November 25th, 2005 - See more articles from this month

There is no doubt that in order to stay competitive companies have to invest in technology based solutions. When a small company has a limited number of buyers and suppliers, and the business is managed by one or two people, it is capable of delivering quality services. It is also able to keep its various business processes efficient enough. But for a company with several clearly identifiable departments, it is necessary to put extra efforts to keep productivity high. Naturally, in their endeavor of better performance companies at one point start to look at various technological solutions. Apart from accounting, which is by this time already fairly computerized, the question arise what is the next priority? Is it a Customer Relationship Management Solution?

What is CRM?

CRM stands for Customer Relationship Management. CRM is about better understanding of customer's behavior and needs, and developing and implementing business strategies and supporting technologies that close the gaps between an enterprise's current and potential performance in customer acquisition, growth, and retention. Its center of attention is managing and optimizing customer life cycle and building proper relationship among company departments, sales forces, and customers which in turn helps increasing company productivity.

Customer Relationship Management has increasingly started to become an important business approach. Its goal is to return to one-to-one personal marketing. The idea is to create a customer oriented marketing and sales approach based on cumulative vital information about a customer such as his/her previous purchasing trend, preferences and needs.

By implementing a CRM solution a company may expect to:

• Increase the company's ability to retain and acquire customers
  
• Maximize customer life cycle
  
• Personalize and improve customer service without increasing cost of service

In order to receive these benefits from a CRM system a company has to clearly understand its need. CRM is not a technological miracle that will bring dramatic change in company productivity. CRM is about sweeping change of mindset across the company and make it a customer-oriented enterprise. That's why before installing a CRM system the company should understand what it wants to achieve. Does the company want to make selling process more efficient? Is it trying to target and acquire the right customer segment or the goal is to improve customer service?

CRM includes following customer related applications:

Sales Force Automation

• Contact Management: Helps maintaining, tracking and managing customer information and contact histories for present customers.
  
• Activity Management: A combination of calendar, task and scheduling management solution for sales people.
  
• Communication Management: Uses for eMails and messaging management
  
• Sales forecasting: Helps analyzing and projecting future sales goals and targets
  
• Lead Management: Helps managing leads and potential business opportunity
  
• Document Management: Helps creating, storing and managing documents
  
• Pipeline Management: Uses for managing and analyzing sales pipeline;
  
• Product eCatalog: Necessary for accurate product specification and prices Customer Service
  
• Call Center Management: Provides automated, end-to-end call routing and tracking Captures customer feedback information for performance measurement, quality control, and product development
  
• Field Service Management: Allocates, schedules, and dispatches people, parts and time Tracks materials, expenses, and time associated with service orders
  
• Help Desk Management: Solves a problem by searching the existing knowledge base Keeps logs of problem reports

Why a company needs to adopt a CRM solution?

A CRM solution is capable of providing real-time access to the stored data about a customer and related matters. Sales force by analyzing the data can create sales forecast, manage interaction with the customer more effectively, develop and manage sales pipeline. Support team thanks to the information available at their fingertips manages to give personalized customer care. According to Pareto principle 20 percent of customers are responsible for 80 percent of company profit. It is absolutely necessary to do everything possible to retain loyalty of these customers. Why retaining an existing customer is so important?

• It takes in average 7 to 8 calls in order to close a deal with a new customer and only two to three in the case of an existing customer.
  
• According to Boston Consulting Group cost of selling to an existing web customer is around 6 US$ and cost of acquiring a new web customer is around 34 US$
  
• A five percent increase in expenses in keeping existing customers translates into 25 percent or more increase in profitability.

Other clear advantages of a CMR solution include its ability to:

• Provide improved customer service
• Increase revenues per customer
• Manage sales efficiently
• Sell products more effectively
• Help sales staff close deals faster
• Make call centers more efficient
• Streamline marketing and sales processes

What should a company know before adopting a CRM solution?

As mentioned earlier CRM is not a panacea to company productivity improvement. In order to get maximum result, the company must learly understand its requirement and then only adopt a CRM system. No matter how good the CRM solution the company chooses if the solution does not correspondent to the staff mindset i.e. if they don't receive required training and don't clearly understand the changes in business processes, the risk of good technology going bad is pretty high!

Often, senior management due to natural fear towards new technology does not get involved in the process of CRM implementation. This is a big mistake! If management does not take advantage of the CRM, it's very likely that common staff will not take the system seriously too.

The present customer related information that is going to be integrated with the CRM system also should be carefully analyzed, consolidated, structured and cleaned up prior to adoption. Bad data are capable of creating a mess even in the best CRM solution.

How should a company adopt a CRM system?

The best option is to adopt a CRM system phase by phase. The company needs to identify the areas where the return on investment would be highest and adopt CRM technology there. Another good approach is to automate one of the key departments with inexpensive CRM solution and if the project becomes successful adopt a cross-company CRM solution.

Nowshade Kabir is the CEO of Rusbiz.com. Companies can optimize and handle some of their vital business processes such as supply chain management with the features available on Rusbiz.com http://www.rusbiz.com . Read more articles related to online business at http://ezine.rusbiz.com