Customer Relationship Management (CRM): Benefits and Implementation

Rick Henkin

What is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) is a broad term used to describe the methods that a company uses to learn more about it's customers and their needs, with the goal of building a stronger relationship with them.

According to Wikipedia , in its overview of CRM , "...customers interacting with a company perceive the business as a single entity, despite often interacting with a number of employees in different roles and departments. CRM is is a combination of policies, processes and strategies implemented by an organization to unify its customer's interactions and provide a means to track customer information."

While technology is used to track and organize information about customers, it only represents a portion of what's involved in CRM. A holistic approach is necessary so that everyone who comes into contact with the customer, whether it's sales, marketing or support, can make informed decisions on what would be the best way to further the relationship and serve the customer's needs.

How does it benefit me?

By using technology and human resources to better understand the needs and lifetime value of your customers, CRM can help you increase your revenues.

What difference do you think it would make to your bottom line if you:

knew exactly what products and services your customers want (not you think they want)?

knew exactly where your customer service needs improvement?

knew exactly which up sell or cross sell products or services would best benefit a specific customer?

knew exactly what the "sales moment" was that convinced your customer to purchase from you in the first place? Do you think you could use that in your future advertising and marketing?

Do you think that knowing the answers to any of the above questions and acting on them would:

help your sales team close more deals, more quickly?

create loyalty among your customers?

help you increase the lifetime value of each customer?

encourage your customers to refer you to others?

How do I implement a CRM solution in my business?

Businesslink, a partnership between UK government experts and relevant business support organizations suggests the following six step process for implementing CRM:

Collect information- decide on the information you need to identify your customers and categorize their behavior

Store information- use a centralized, relational customer database (a database that allows you to sort based on any field and generate reports that include only certain fields from each record). Run all your systems from this source so that everyone has access to the most current information

Access information- make the information available to all staff

Analyze customer behavior- using spreadsheet programs, begin to profile your customers to create sales and marketing strategies

Market more effectively- by understanding your customer's needs, you can target and reward your most valuable customers

Create a better customer experience

Example of a CRM solution

I belong to Kaiser Permanente, an HMO. They use a centralized relational database for all of their patients. Consequently, no matter which health professional I visit, he or she has access to all the visits, tests, x-rays and other medical information gathered by every other health professional I've visited in their system. This means that they can make a more informed recommendation regarding any treatment. It also means that I don't have to wait for records to be transfered or repeat any processes that have already been completed.

In addition to the above, Kaiser's centralized database allows me to go online to make appointments, email my doctor or review my results. It even sends me a questionnaire after each visit, inquiring as to my satisfaction with the doctor and the treatment received.

What about software?

You have 2 choices:

A packaged system which you purchase and install on your own hardware. This might give you more flexibility to customize. In some cases packaged systems integrate more easily with email clients as well, i.e. Microsoft Outlook with Business Contact Manager

A web-based service that you access over the Internet. While this choice eliminates the need for backups and software updates (which are done automatically), you do need to make sure that you've chosen a reliable vendor. You certainly don't want their system going down or compromising your data.

Conclusion

Whether your business is small or large, established or just starting out, there are many benefits to using CRM as means of connecting to your customers and ultimately increasing your revenues. Remember that CRM is not just a software or technology approach to customer relations but rather a holistic approach so that everyone on your team who comes into contact with the customer can make informed decisions on what would be the best way to further the relationship and serve the customer's needs.

ARTICLE DATE: 2009-05-26
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