Technology: November 2007 Archives

By: Edward Solomon, Net@Work

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 client-focused 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.

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 mid-size 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.

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.

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Edward Solomon is Co-President/Founder of New York–based Net@Work (www.netatwork.com), a technology services and solutions provider specializing in CRM, Accounting, and Business Management software. He can be reached at esolomon@netatwork.com