October 24, 2013 9.48 am This story is over 98 months old

To CRM or not to CRM – that is the question

Customer management: In her latest column, Susan Marot talks about CRM and if your business really needs it.

I wonder how many people reading this article will actually know what CRM is. If you can say yes to that question, I bet you are thinking “very expensive IT system”. Wrong!

CRM stands for Customer Relationship Management. It is your business’ way of keeping in contact with new and existing customers in order to maintain strong relationships, so they keep buying from you. All IT does is enable that strategy. You don’t necessarily need the IT system, but you do need the CRM strategy.

So what can an effective CRM do?

  • Record all customer data including contact and buying history
  • Track and measure marketing campaigns
  • Create, assign and manage requests made by customers
  • Capture your sales pipeline for forecasting purposes
  • Act as an appointment making tool
  • Be your management tool to review performance across the whole sales function

The list doesn’t end there, but I don’t want to bore you with all the wonderful benefits of CRM as I have a point to make. My point is that as CRM has the potential to deliver a lot, many businesses think that by buying a system then it will. Again, wrong!

Has anyone heard the phrase “Put rubbish in, you will get rubbish out”? Well, it is the same with CRM. You can’t just chuck a load of data in it and expect a stack of sales to spit out. You need to agree what the CRM strategy is for the business and who is responsible for making it happen, which essentially is anyone who touches a customer.

All too often, I am invited in by a client who is complaining that no one is using their CRM system. “We have spent thousands and we still haven’t seen an increase in sales, yet alone a return on our investment! Why?” The answer is simple. They didn’t agree first how they need to communicate with their new and existing customers, before going out to buy one.

In 2003, well-respected ICT analysts Gartner produced a report stating that more than $2 billion had been spent on CRM software that was not being used. A 2007 survey of UK senior executives stated that their biggest challenge was getting staff to use the systems they had installed. Gartner’s current prediction is that the CRM software market will reach $36.5 billion by 2017.

If those figures are any where near correct, then my guess is that many businesses are flushing more than half that spend down the drain. What a frightening waste of money!

So do I think you need to implement CRM in your business? You might be surprised, but the answer has still got to be yes. However, think carefully about what your CRM strategy is before going out to buy a CRM system to enable that strategy.

I started selling in the mid eighties with a CRM strategy supported by an A4 diary, a map of Lincolnshire and a box of 6” x 4” record cards. Coupled with an effective CRM strategy these simple tools helped me to communicate so successfully with my clients, that within six months I had saved the deposit for my first home. I put all my success over the years down to delivering an effective CRM strategy, which has been enabled by either the simplest of systems right up to solutions costing millions to buy and implement.

The secret to successfully benefiting from Customer Relationship Management is getting the strategy right first, before you get your wallet out.

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Lincolnshire-bred business woman Susan Marot runs Marot Associates Ltd, which helps businesses sell more by improving their sales process. Susan works with them to design, improve or even deliver the sales the company needs. A sales person for almost 30 years, Susan is often engaged to speak at events on selling and has regular articles published by the Institute of Sales and Marketing Management in "Winning Edge".