Let's take a quick pop quiz. CRM is a) customer relationship management, b) a type of software program, c) a philosophy and way of doing business, or d) all of the above.
If you chose "d," congratulations. Customer relationship management (CRM) isn't just a software package; it's a way of business life. We don't mean to sound like a new age guru, but it really helps to take a holistic approach to CRM if you expect to find success and avoid the pitfalls so many companies have experienced with it.
Like so many newer technologies and techniques, the term CRM has been tarnished by reports of underwhelming results and high failure rates. But the question should be: Can you afford not to have a CRM strategy?
"Nothing should be simpler than deciding that serving your customers better is important. CRM shouldn't be so damn difficult," says Chris Selland, founder and managing director of technology consulting firm Reservoir Partners. If it hurts that bad, you're probably going about it wrong. Selland says that most of the failures stem from businesses approaching CRM as a software project rather than a business process.
"CRM is not a technology; it's not an application," explains Joe Outlaw, former research director and small- and midsize-business CRM specialist at Gartner Inc. "It's a business strategy around interacting with your customers in a way that brings them more value and is more profitable to you." Now who can argue with that?
Once you decide to search for a CRM solution, where do you start? First off, don't even think about software. We'll get to that part later. Your first step is to develop a CRM vision for your business. Some common goals are making your customer service easier to access, gaining a greater understanding of customer needs, reducing sales or support costs, retaining customers longer and getting new customers. Determine where you would like to end up, and then develop a strategy around what it will take to get there. Selland recommends gathering as many high-level people in your business as you can to start a discussion and including your customers as well.
"Put yourself in your customers' shoes," says Outlaw. "What do you need to do to make your company easier to do business with?" Once you know what issues need to be addressed in your company, it's time to lay down the requirements and functional elements for the software application that will address them. Whatever you choose needs to work with your existing setup, whether it's a server, an e-mail program or other software.
Some entrepreneurs go it alone when putting a CRM strategy together. Others look for outside help from consultants or value-added resellers. A reseller you've worked with before can be helpful if he or she is already familiar with your hardware, software and systems. The downside is, most have ties to only a few CRM options, and they'll try to steer you in that direction.
When you do get around to the software component of your CRM strategy, there are a myriad of choices to explore, different approaches of varying cost and scale. The chart on page 40 features some of the available options; it's up to you to decide which one fits your business. We differentiate between enterprise-style CRM applications, on-premises applications and those hosted online. The features listed just scratch the surface of what these programs do. You won't see street prices listed, because these systems aren't sold on the street, and price tags vary widely with the number of users and level of customization.
Although we could sit around for weeks discussing what CRM is and how to go about it, nothing beats just jumping in and taking care of business. What follows are the stories of three very different entrepreneurs and their adventures with CRM solutions.