What is CRM?

CRM stands for Customer Relationship Management. It is a strategy used to learn more about
customers' needs and behaviors in order to develop stronger relationships with them. After all, good
customer relationships are at the heart of business success. There are many technological
components to CRM, but thining about CRM in primarily technological terms is a mistae. The
more useful way to thin about CRM is as a process that will help bring together lots of pieces of
information about customers, sales, mareting effectiveness, responsiveness and maret trends.
What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight
into the behavior of customers and the value of those customers. If it wors as hoped, a business
can!
provide better customer service
make call centers more efficient
cross sell products more effectively
help sales staff close deals faster
simplify marketing and sales processes
discover new customers
increase customer revenues
That sounds rosy. How does it happen?
It doesn't happen by simply buying software and installing it. "or CRM to be truly effective, an
organi#ation must first decide what ind of customer information it is looing for and it must decide
what it intends to do with that information. "or e$ample, many financial institutions eep trac of
customers' life stages in order to maret appropriate baning products lie mortgages or IRAs to
them at the right time to fit their needs.
%e$t, the organi#ation must loo into all of the different ways information about customers comes
into a business, where and how this data is stored and how it is currently used. &ne company, for
instance, may interact with customers in a myriad of different ways including mail campaigns, 'eb
sites, bric(and(mortar stores, call centers, mobile sales force staff and mareting and advertising
efforts. )olid CRM systems lin up each of these points. This collected data flows between
operational systems *lie sales and inventory systems+ and analytical systems that can help sort
through these records for patterns. Company analysts can then comb through the data to obtain a
holistic view of each customer and pinpoint areas where better services are needed. "or e$ample, if
someone has a mortgage, a business loan, an IRA and a large commercial checing account with
one ban, it behooves the ban to treat this person well each time it has any contact with him or her.
Are there any indications of the need for a CRM project?
%ot really. ,ut one way to assess the need for a CRM pro-ect is to count the channels a customer
can use to access the company. The more channels you have, the greater need there is for the type
of single centrali#ed customer view a CRM system can provide.
How long will it take to get CRM in place?
A bit longer than many software salespeople will lead you to thin. )ome vendors even claim their
CRM .solutions. can be installed and woring in less than a wee. /acages lie those are not very
helpful in the long run because they don't provide the cross(divisional and holistic customer view
needed. The time it taes to put together a well(conceived CRM pro-ect depends on the comple$ity
of the pro-ect and its components.
How much does CRM cost?
A recent *0112+ survey of more than 2,311 business and IT professionals, conducted by The 4ata
'arehousing Institute found that close to 516 had CRM pro-ect budgets of less than 7511,111.
That would appear to indicate that CRM doesn't have to be a budget(buster. 8owever, the same
survey showed a handful of respondents with CRM pro-ect budgets of over 721 million.
What are some eamples of the types of data CRM projects should !e collecting?
Responses to campaigns
Shipping and fulfillment dates
Sales and purchase data
Account information
Web registration data
Service and support records
Demographic data
Web sales data
What are the keys to successful CRM implentation?
Break your CRM proect down into manageable pieces by setting up pilot programs and short!term
milestones" Starting with a pilot proect that incorporates all the necessary departments and groups that
gets proects rolling #uickly but is small enough and fle$ible enough to allow tinkering along the way"
Make sure your CRM plans include a scalable architecture framework"
Don%t underestimate how much data you might collect &there will be '()S* and make sure that if you
need to e$pand systems you%ll be able to"
Be thoughtful about what data is collected and stored" )he impulse will be to grab and then store
+,+R- piece of data you can. but there is often no reason to store data" Storing useless data wastes
time and money"
Recogni/e the individuality of customers and respond appropriately" A CRM system should. for
e$ample. have built!in pricing fle$ibility"
Which di"ision should run the CRM project?
The biggest returns come from aligning business, CRM and IT strategies across all departments
and not -ust leaving it for one group to run.
What causes CRM projects to fail?
Many things. "rom the beginning, lac of a communication between everyone in the customer
relationship chain can lead to an incomplete picture of the customer. /oor communication can lead
to technology being implemented without proper support or buy(in from users. "or e$ample, if the
sales force isn't completely sold on the system's benefits, they may not input the ind of
demographic data that is essential to the program's success. &ne "ortune 511 company is on its
fourth try at a CRM implementation, primarily because its sale force resisted all the previous efforts
to share customer data.
As the largest health insurance provider in %ew 9or, :mpire manages more than 0;,111 corporate
employer accounts, of which about 03,<11 are small to midsi#e companies employing 51 people or
fewer. :mpire services these .community rated. employers via some 2,=11 registered independent
sales broers. ,ecause each customer's needs are different, broers must produce customi#ed
coverage estimates for each one. "or e$ample, some companies want preferred provider plans, and
some want health maintenance plans. :ach plan has different .riders,. or options, attached, such as
vision care or prescription coverage.
In the past, a broer would call :mpire's broer relations department, pass along the customer's
specs and then wait for :mpire to calculate a price >uote. The broer then relayed the >uote bac to
the customer, who would either accept it or as for modifications?in which case the broer had to
contact :mpire again and re>uest a revised >uote. 'hen a >uote was finally accepted, the broer
filled out and filed one set of paperwor while the customer filled out a group application and sent it
directly to :mpire. 'henever :mpire revised its plan structure, broers found themselves with
outdated enrollment forms.
The company then made 31 copies of the enrollment paperwor, filing it within 22 departments at
:mpire. :ven then, fully 3< percent of the forms had to be returned or double(checed by phone
with the broers because of errors or omissions.
)ince they couldn't generate >uotes themselves or process the paperwor, the broers were
completely dependent on :mpire's broer relations staff, who were around only during normal
business hours. As a result, it too about 0< days to shepherd a new customer through the sales
and enrollment process. Then employees had to wait another wee to 21 days to get their I4 cards.
The #uest to $treamline
In late 2;;=, )tephen ,ell, vice president of e(business operations, and @enneth &. @lepper, senior
vice president of systems, technology and infrastructure, began developing a .print on demand.
system to reduce the vast mountains of >uicly outdated benefits brochures and contracts that sat in
storage rooms.
"irst, )now and his team too a hard loo at the e$isting paper(based process. They too over a
conference room and created a color(coded map of the sales processA no one had ever before
traced it from start to finish. .It was lie a grapevine,. ,ell says of the process map. .It -ust got
bigger and bigger. "or the first time, we reali#ed that there were BB redundancy audit checs?
where we go over information to mae sure it's correct?built into the process. 'e had created this
nightmare..
They began by eliminating all the loops and unnecessary steps, such as the need for broers to
eep calling the company for revised >uotes. .'herever there were repeats, we tried to eliminate
them,. ,ell says. The team managed to cut the essential steps from =1 to C1. That was the easy
part, he saysA then came the daunting tas of finding an application to mae the streamlined map a
reality.
,ecause :mpire's sales channel was so comple$, ,ell decided that :mpire couldn't go with an off(
the(shelf application. And he >uicly saw the value of moving the process to the 'eb. ,ell and
@lepper hired "irepond of 'altham, Mass., to customi#e its proposal configurator and develop a
>uote engine and group enrollment process for :mpire. ,ecause :mpire laced in(house
e$perience and resources for handling an enterprisewide application, they ept the IT department
close to the pro-ect so that staffers could learn from the e$perience. The department also had to
integrate the application with :mpire's legacy mainframes, a process that was tedious but critical,
according to ,ell.
%mpowered &rokers
:mpire's ,roer )ervices Application, which includes the >uote engine and proposal configurator
and enables online group enrollment, went live in &ctober 0111. The browser(based >uote engine
frees broers from having to call :mpire to crunch numbers every time they need a >uote. Instead,
they can now enter the relevant customer data themselves online, and an automated formula
generates a >uote in a matter of seconds.
If the client isn't satisfied with a particular >uote, the broer can go bac online and change the
specifications. Dpon maing a sale, a broer no longer has to wade through piles and piles of paper,
but can go online to enroll a new account. The password(protected system also lets agents maintain
customer information online, where it's accessible around the cloc.
,y &ct. B2, 0112, all of :mpire's 2,=11 independent broers had registered on the site, ,ell says.
'hen the site went live, :mpire aimed for getting 25 percent of the broers to use its self(service
functionality. As of &ctober, more than C5 percent were regularly generating their own >uotes
online.
:mpire agents using the site now handle an average of C5 percent more >uotesA broers who used
to process 01 >uotes a day, now handle 51. Most important, the enrollment process that once
dragged out over 0< days now taes -ust two to three days to complete online.
'( Tips for implementing customer self)ser"ice
E Fearn everything about your customers.
E Conduct focus groups to ensure that they want self(service.
E 4efine clear business goals.
E :valuate the technology for its technical and financial merits.
E 4oes it match your customer baseG 'ill it boost profitabilityG
E 'or as a team. 8ave customer support, IT and other departments involved every step of the
way.
E &ffer training to employees.
E :$pect this to be an iterative process that re>uires maing changes as you learn more about
your customers.
E 4evelop an effective way to measure results.
E Dnderpromise and overdeliver.
*f a company is just starting with a CRM project+ what should they do?
If you're -ust starting out, you want to build you're re>uirements first. 4efine the problem, understand
what's going to solve that problem and understand the functionality of that solution.
In other words, in order to increase your number of mareting campaigns this year, you are going to
need individual customer profiles. That's -ust one e$ample, but once you understand that it's a
re>uirement, you can find the technologies that support that particular functionality. That's the right
way to do it! the re>uirement, the functionality, then the tool.
CRM is a business approach that integrates People,
Processes and Technology to maximize the relations of an
organization with all types of customers.
The true value of CRM is to transform strategy, operational
processes and business functions in order to retain
customers and increase customer loyalty and profitability.
Aris Pantazopoulos - Founder, CRM Today
Liz Shahnam, CRM analyst with the META Group, says CRM is "a
buzzword that's really not so new !hat's new is the te"hnolo#y is
allowin# us to do what we "ould do at the turn o$ the "entury with the
nei#hborhood #ro"er %e had $ew enou#h "ustomers and enou#h
brainpower to &eep tra"& o$ e'eryone's pre$eren"es
Te"hnolo#y has allowed us to #o ba"& to the $uture to this model"
(roperly understood, CRM is "a philosophy that puts the "ustomer at the
desi#n point, it's #ettin# intimate with the "ustomer," in Shahnam's
words
The Peppers and Rogers roup sur'eyed a number o$ business leaders
$rom "ompanies that are at the $ore$ront o$ CRM )ne o$ the *uestions was
"%ow do you de$ine CRM+"
)'er hal$ o$ the respondents ,-. per"ent/ said CRM is mo'in# a "ompany $rom
a produ"t0"entri" $o"us to a "ustomer0"entri" one 1i$ty0one per"ent $elt CRM is
usin# 2T tools to a"hie'e in"remental business impro'ements, and 34 per"ent
'iew CRM as ma&in# "ustomer in$ormation a'ailable to all "ustomer "onta"t
personnel
The sur'ey *uestion and its three answers raise a #ood point5 CRM is not all
thin#s to all people 2t's many di$$erent ways o$ arri'in# at the same #oal5
Rea"hin# the "ustomer and #eneratin# lon#0term pro$it $rom that relationship
CRM is a "omprehensi'e approa"h whi"h pro'ides seamless inte#ration
o$ e'ery area o$ business that tou"hes the "ustomer 0 namely mar&etin#,
sales, "ustomer ser'i"e and $ield support0throu#h the inte#ration o$
people, pro"ess and te"hnolo#y, ta&in# ad'anta#e o$ the re'olutionary
impa"t o$ the 2nternet
Customer relationship mana#ement ,CRM/ is a business strate#y that
aims to understand, anti"ipate and mana#e the needs o$ an
or#anization's "urrent and potential "ustomers 2t is a 6ourney o$
strate#i", pro"ess, or#anizational and te"hni"al "han#e whereby a
"ompany see&s to better mana#e its own enterprise around "ustomer
beha'iors 2t entails a"*uirin# and deployin# &nowled#e about one's
"ustomers and usin# this in$ormation a"ross the 'arious tou"h points to
balan"e re'enue and pro$its with ma7imum "ustomer satis$a"tion
Rank Definition Implications
4 "Customer
needs"
2denti$yin# and meetin# "ustomer needs is seen
as the primary #oal o$ relationship mar&etin#
8espite this hi#h ran&in#, "ustomer needs
tra"&in# has the lowest le'el o$ usa#e amon#
measurement tools
9 "(artnership" !or&in# in partnership with suppliers and
"ustomers is the &ey $o"us, both in "onsumer
and business0to0business mar&ets
: "2n"reasin#
pro$its"
Ma7imisin# "ustomer retention and 'alue, and
so dri'in# up pro$itability, is the #oal This
seems to re$le"t the popularity o$ the $indin#s
propounded by 1rederi"& Rei"hheld that
in"reased retention e*uals substantially
in"reased pro$its
3 "Loyalty" ;uildin# loyalty with "ustomers, usually de$ined
as maintainin# repeat sales, is the "entral role
o$ relationship mar&etin#
. "<alue" Mana#in# and enhan"in# the 'alue to both
"ustomer and "ompany within the relationship
- "Satis$a"tion" The $o"us on satis$a"tion re"ei'ed a relati'ely
low le'el o$ mentions, yet this is the most
popular "ustomer measure
,Sour"e5 Measurin# and 'aluin# "ustomer relationships,
;usiness 2ntelli#en"e/
8r Robert Shaw, Shaw Consultin# and author o$ Measurin# and <aluin#
Customer Relationships
The $ollowin# de$inition o$ CRM is intended to be both pra"ti"al, in the
sense o$ bein# pro"ess0based, and a"tionable, in re$le"tin# what #oes on
in the real world 2t also $o"uses on the business si#ni$i"an"e o$ the
a"ti'ity
"Customer relationship mana#ement is an intera"ti'e pro"ess $or
a"hie'in# the optimum balan"e between "orporate in'estments and the
satis$a"tion o$ "ustomer needs to #enerate the ma7imum pro$it CRM
in'ol'es5
measurin# both inputs a"ross all $un"tions in"ludin# mar&etin#,
sales and ser'i"e "osts and outputs in terms o$ "ustomer re'enue, pro$it
and 'alue
a"*uirin# and "ontinuously updatin# &nowled#e about "ustomer needs,
moti'ation and beha'iour o'er the li$etime o$ the relationship
applyin# "ustomer &nowled#e to "ontinuously impro'e
per$orman"e throu#h a pro"ess o$ learnin# $rom su""esses and $ailures
inte#ratin# the a"ti'ities o$ mar&etin#, sales and ser'i"e to
a"hie'e a "ommon #oal
the implementation o$ appropriate systems to support "ustomer
&nowled#e
a"*uisition, sharin# and the measurement o$ CRM e$$e"ti'eness
"onstantly $le7in# the balan"e between mar&etin#, sales and ser'i"e
inputs
a#ainst "han#in# "ustomer needs to ma7imize pro$its"
'hat Is a Customer Relationship Management *CRM+ )ystemG
%"en if you think you know the answer+ the ,uestion has changed.
B RA!D "ARRI#
IT$# IMP%##IB&' T% state pre"isely what "ustomer relationship mana#ement ,CRM/ means to e'eryone The
term has been applied to almost e'ery element o$ business that e'en remotely intera"ts with a "ustomer 2n its
in$an"y, CRM systems were a series o$ main$rame or ser'er0based appli"ations spe"i$i" to sales, mar&etin# and
support business $un"tions The appli"ations were li#htwei#ht by today's standards and did little more than
"apture and $ile "riti"al data ;ut as "ultural boundaries within or#anizations wea&ened, indi'idual $ie$doms o$
in$ormation #a'e way to sophisti"ated appli"ations that "ould span business $un"tions ;y doin# so, these
appli"ations "reated the 'ision o$ a sin#le 'iew o$ the "ustomer 1or the $irst time, or#anizations "ould tra"& and
analyze shi$tin# "ustomer needs, lin& mar&etin# "ampai#ns to sales
results, and monitor sales a"ti'ities $or impro'ed $ore"astin# a""ura"y and
manu$a"turin# demand
CRM's :volution
CRM has e'ol'ed sin"e its earliest in"arnation, ori#inally dri'en by an inside0out $o"us, throu#h three phases o$
e'olution5 te"hnolo#y, inte#ration and pro"ess Re"ently ha'e we seen a ma6or leap $orward to a $ourth phase5
"ustomer0dri'en CRM = an outside0in approa"h that has intri#uin# $inan"ial promise
4 Technology: 2n its earliest in"arnation, CRM meant applyin# automation to e7istin# sales, mar&etin#,
support and "hannel pro"esses as or#anizations attempted to impro'e "ommuni"ations, plannin#,
opportunity and "ampai#n mana#ement, $ore"astin#, problem sol'in#, and to share best pra"ti"es To
some de#ree, it wor&ed %owe'er, automatin# poorly per$ormin# a"ti'ities or pro"esses rarely impro'es
the *uality o$ the out"ome So, $or the most part, the *uality o$ the return on in'estment ,R)2/ was
mea#er = i$ measurable at all The promise o$ the te"hnolo#y was there, but $ew or#anizations were
realizin# the pinna"le o$ per$orman"e The metri" o$ su""ess was in"reased e$$i"ien"y in sales, mar&etin#,
support and "hannel pro"esses
ad(ertisers
9 Integration: ;y de'elopin# "ross0$un"tional inte#ration, supported by data warehousin# and shared roles
and responsibilities, or#anizations be#an to "reate a "ustomized 'iew o$ the "ustomer Support issues,
!eb hits, sales "alls and mar&etin# in*uiries started buildin# a deeper understandin# o$ ea"h "ustomer
and allowed a##ressi'e or#anizations to adapt their ta"ti"s to $it indi'idual needs 2nte#ration $o"used
around two primary "omponents5
o Make it easier to do business with the seller: 2nstead o$ operational silos that inhibited superior
"ustomer relationships, the or#anization as a whole too& ownership and responsibility $or "ustomer
satis$a"tion !ith a sin#le 'iew o$ the "ustomer, it was mu"h easier $or anyone to respond to sales
opportunities or impendin# support issues and ta&e appropriate steps E7pe"ted bene$its are to
impro'e retention and lower support "osts
o Predictive modeling: 8ata minin# o$ an a##re#ate o$ "orporate &nowled#e and the "ustomer
"onta"t e7perien"e was used to impro'e operational and sales per$orman"e ;y applyin# "omple7
al#orithms to a history o$ pur"hasin# or in*uiry "hara"teristi"s, it be"ame pra"ti"al to predi"t the
demands o$ indi'idual "ustomers >p0sellin#, "ross0sellin#, e'en the ability to preempt potential
problems, was now possible $or all "ustomer0$a"in# representati'es E7pe"ted bene$its are to ha'e
better "ross0sellin#?up0sellin# and impro'ed produ"t o$$erin#s or deli'ery
: Process: ;y rethin&in# the *uality and e$$e"ti'eness o$ "ustomer0related pro"esses, many or#anizations
be#an to eliminate unne"essary a"ti'ities, impro'e outdated pro"esses, and redesi#n a"ti'ities that had
$ailed to deli'er the desired out"omes Then, by re0"reatin# the pro"ess throu#h an understandin# o$ the
"apabilities o$ the te"hnolo#y, the out"omes were more predi"table and the promises $or a meanin#$ul
R)2 more substantial and realisti" The metri"s $or su""ess be"ame the impro'ed e$$e"ti'eness in ser'in#
the "ustomer
Thus $ar, almost e'erythin# about CRM has $o"used on impro'in# the e$$e"ti'eness and e$$i"ien"y o$ the seller's
or#anization )r#anizations ha'e e'ol'ed $rom sales representati'es wor&in# $rom paper noteboo&s, or a "ard
system, to a ti#htly inte#rated networ& that sees mo'ement in sales a"ti'ity, predi"ts produ"t demand on
manu$a"turin#, and mana#es the lo#isti"s o$ "omple7 teams to ser'e the buyer and seller Mar&etin#, support
ser'i"es, "hannel mana#ement, re'enue mana#ement, resour"e allo"ation?mana#ement, $ore"astin#,
manu$a"turin#, lo#isti"s and e'en resear"h and de'elopment ha'e all seen the bene$its o$ a well0desi#ned CRM
strate#y
%owe'er, the past de"ade o$ CRM and its asso"iated impro'ements ha'e been based on three assumptions5
4 The past would be a lo#i"al $oundation to predi"t $uture "ustomer needs and pro$itability
9 8emand $or traditional 'alue propositions would remain "onstant
: ;etter "ustomer relationships would deter attrition
All three o$ these assumptions ha'e $ailed = or at least be"ome unstable = in a post0September 44
en'ironment %istori"al pur"hases or in*uiries are not a "lear indi"ation o$ $uture needs as buyers are rapidly
rede$inin# re*uirements to satis$y their "urrent business, mar&et or shareholder demands <alue propositions are
"han#in# in hi#hly "ompetiti'e mar&ets as sellers are wor&in# a##ressi'ely to reestablish stru"tural bonds And,
dri'en by sensiti'e $inan"ial mar&ets, buyers mo'e to whi"he'er supplier "an pro'ide the best ali#ned, most "ost
e$$e"ti'e solution that promises to stabilize, or impro'e, their business per$orman"e These $a"tors are dri'in#
CRM into a $ourth phase
Customer(4riven CRM ? The "ourth /hase
Today, re'enue per$orman"e has be"ome the "entral theme $or CRM as or#anizations see& to a"hie'e and
maintain e7pe"ted $inan"ial results Leadin# e7e"uti'es are as&in#5
!hi"h o$ my "ustomers ha'e the potential $or a hi#h0pro$it, sustainable relationship+
!hat de$ines pro$itable and unpro$itable "ustomer se#ments+
!hat must "han#e to realize that optimal potential+
!here's my opportunity $or #rowth+
!here's my ris& $or loss+
Am 2 ma&in# the ri#ht de"isions related to balan"in# a"*uisition, "ross0sellin# and upsellin# = and $or the
ri#ht "ustomer #roups+
The epiphany isn't in the *uestions themsel'es, but in the $a"t that we're as&in# them a$ter a de"ade o$ CRM
in'estments = in'estments intended to pro'ide 6ust those 'ery answers
2t is important to understand that a disrupti'e "han#e has o""urred "ausin# lar#e se#ments o$ "ustomer
or#anizations to reassess many o$ their basi" needs, 'alues and assumptions Resear"h indi"ates that this e'ent
was tri##ered by the un"ertain "omple7ities o$ the post0September 44th world )r#anizations are now
"hallen#in# e'erythin# $rom how they "reate 'alue, to how they ser'e their mar&ets, to how they meet
shareholder e7pe"tations 2t is the answers to these *uestions that "reate the $ramewor& $or phase $our CRM
!ithout a deep understandin# o$ what's #oin# on in the "ustomer's head = spe"i$i"ally what will in$luen"e buyin#
beha'ior = it is di$$i"ult to establish "ustomer strate#ies that mutually ser'e the needs and e7pe"tations o$ the
buyer and seller "ommunities
Dnderstanding the 4ifference
2n the past, CRM has $ollowed a basi" balan"ed s"ore"ard te"hni*ue in'ol'in# $our "ate#ories5 "ustomer,
$inan"ial, operations, and people ,See !hat 2s a ;alan"ed S"ore"ard+/ 1rom an inside0out perspe"ti'e,
or#anizations $irst analyzed the needs and "apabilities o$ operations and their people to determine what "ould be
deli'ered to the customer 1rom that, they drew "on"lusions and predi"tions to determine the impa"t on the
financial "ate#ory
As this has "han#ed, so ha'e the priorities @ow the $o"us is $irst on the "ustomers5
!hat will they buy, when, why and $or how mu"h+
!hat "reates 'alue $or them, and does this "reate a stru"tural bond+
!hat ser'i"es "an we per$orm that merit premium mar#ins+
Can we establish a new mar&et se#mentation strate#y $o"used on potential pro$itability and willin#ness to
pur"hase+
8o we understand their business dri'ers, $inan"ial metri"s, buyin# pro"ess and de"ision "riteria+
Customer dri'en CRM means that or#anizations $irst understand the customer, then mo'e inward to operations
!ithin the "onte7t o$ the "ustomer, the systems and in$rastru"ture "apabilities needed to ser'e those "ustomers
and se#mentation0based re*uirements must be reassessed @e7t, it's imperati'e to e7plore the s&ills and
"ompeten"y re*uirements $or the people "omponent o$ the CRM desi#n A de"ade o$ CRM has tau#ht us that
nothin# happens until your people intera"t with the "ustomer in a manner "onsistent with new CRM "ustomer
strate#ies and systems And, $inally, you should be well positioned to apply predi"ti'e modelin# al#orithms to
establish a financia model with e7"eptional a""ura"y @ot an easy tas&, but "ase studies are pro'in# $inan"ial
predi"tions that "an demonstrate a""ount0le'el $ore"astin# with o'er AB per"ent a""ura"y
)ummary
8e'elopin# a CRM strate#y isn't an easy tas& Comple7 or#anizational desi#n, "omprehensi'e te"hnolo#ies and
e'er0"han#in# "ustomer demands are 6ust the be#innin# The lessons learned are monumental but we &now that
the promises o$ "ustomer dri'en CRM are worth the 6ourney
%ere's a simple $ramewor& $or $ourth0#eneration CRM5
1o"us on $inan"ial results5 Learn how to identi$y e7istin# pro$itable "ustomer se#ments and determine
what will establish a pro$it0based pro$ile $or mo'in# $orward Then de'elop the business re*uirements to
support sustained, and stru"turally bonded, relationships
1ind "ost e$$e"ti'e alternati'es $or nonbuyers or low0mar#in "ustomers5 @ot all "ustomer relationships are
pro$itable and 'ery $ew "ompanies "an a$$ord to pay to deli'er an e*ual le'el o$ ser'i"es Control "osts
and sa'e your best resour"es $or premium a""ounts = while wor&in# to brin# low per$ormers into an
a""eptable pro$it port$olio
CRM (lannin#5 Ceys $or (ro6e"t Su""ess
-ucleus Research
By Re)ecca *ettemann
Analyst
'hether you're updating, upgrading, -ump(starting, or restarting your CRM efforts, some basic steps will help eep you on the path to a positive
R&I.
Thining about the potential R&I of your customer relationship management *CRM+ pro-ect should start during the selection process. ,efore you
write an R"/ or start taling to vendors, you need to do some homewor to ensure that you're on the right trac to ma$imi#e R&I.
*dentify the .ro!lem / and the $olution
,efore you start thining about vendors, you should define your problem in clear business terms. 4o you need to improve management visibility
into the sales pipelineG Reduce customer support costs or improve customer supportG Reduce customer(related administrative overheadG Maing
your CRM challenges specific will help you determine which technologies or components are most liely to deliver R&I and how you can prioriti#e
your development and deployment plans. Most companies' CRM goals fall into a couple of main categories!
Improved sales performance
Improved management visibility
Improved customer support
Improved mareting
Reduced costs
If your CRM goals fall into more than two of these categories, you'll liely want to prioriti#e one over the other and plan a phased deployment. It's
also a good idea to now at this point what your liely budget is, how fle$ible it is, and what your procurement officer or C"& will be looing for in
terms of business -ustification. If you now waling into the pro-ect that you'll need to show a si$(month paybac period, for e$ample, you can plan
accordingly.
Make the $hort 0ist
Ad(ertisers
Regardless of your relationship with e$isting vendors, previous e$perience, and technology environment, you should mae a short list of potential
vendors and give them a fair evaluation before you mae a decision. 9our short list should be easy to define based on these factors!
1our CRM goals. The vendors whose functionality meets your needs will depend on whether you're looing for improved sales, improved
reporting and forecasting, improved support, improved mareting, or a combination of different customer(related technology.
1our eisting en"ironment and *T philosophy. 4o you have e$isting databases, order systems, or contact lists that will need to be
integrated or migrated into your CRM solutionG 4o you e$pect to do your own development or use consultants or systems integratorsG Are
you comfortable outsourcing your sales and mareting data in its entirety ( or in partG Answering these >uestions will help you determine
whether a large(scale CRM infrastructure, a hosted solution, a point solution, or a broad solution is liely to deliver ma$imi#ed R&I.
1our user dynamics. Are the employees you e$pect to use the solution technology savvy and open to change, or are they the ones still
using pencils and paper to trac leadsG The greater the magnitude of the change you e$pect them to mae, the greater the ris that
adoption will slow the R&I of your pro-ect.
1our !udget. CRM solutions such as )iebel and )A/ can cost millions of dollars to deploy and re>uire a team for ongoing support and
maintenance. &n the other end of the spectrum, Microsoft CRM and "rontRange *for e$ample+ can cost considerably less. 9ou can e$pect
a hosted solution to have a minimal upfront investment and from 7511 to 72,511 per user per year.
Clearly defining your re>uirements and characteristics in each of these ey areas will prepare you for the ne$t step ( evaluating each individual
solution's ability to deliver returns based on the costs and benefits associated with a deployment.
Check Resumes
&nce you've identified the liely vendors to deliver the best solution for you, you'll want to chec their references ( and this doesn't mean -ust
reading case studies on their 'eb sites. Foo to independently developed case studies and your own interviews with references to learn about
their decision process, pro-ect successes and challenges, and whether or not their spending ( and benefits ( met e$pectations.
2ind a .artner 3Check Resumes+ 45
In the CRM world, few companies will deploy a solution without some help from e$ternal consultants or systems integrators. )electing and
planning how you wor with consultants is -ust as important to your pro-ect's success as the technology you choose.
6ustify 1our *n"estment
&nce you've identified your goals and selected a short list of vendors, you can use a structured evaluation of costs and benefits to determine the
best solution in terms of R&I and build the business case for moving forward. &n the costs side, you'll want to consider the initial and ongoing
software, hardware, consulting, internal personnel, and training costs associated with the pro-ect.
8ere are a few guidelines to eep the R&I from your CRM pro-ect on trac!
9ou should spend less on software and consulting than <1 percent of e$pected annual direct benefits.
9ou should be able to deploy and achieve some returns in fewer than si$ months *even if it's only a pilot+.
"or a hosted solution, you should see benefits in fewer than 31 days.
Consulting costs should not be more than twice your initial software investment.
Training users should tae fewer than four hours.
&n the benefits side, you'll want to consider both direct and indirect benefits. /rioriti#e your e$pected benefits from most direct to most indirect,
and then wor on your estimates, using internal surveys, case study data, and reliable benchmaring information as a starting point for >uantifying
e$pected benefits for your company.
7ey 8ecision 2actors
,y and large, there's no such thing as a bad CRM solution. Most solutions deliver value when they're chosen based on clear business needs and
deployed correctly. &nce you've identified your CRM needs and your short list, there are a number of factors to consider to help you mae the
right solution decision.
9ser Adoption
In evaluating the type of CRM solution that will be best for your organi#ation in terms of user adoption, you'll want to consider two ey factors!
The willingness of users to adopt the application. Adoption can often be as much about politics and culture as it is about technology.
)uccessful adoption will also depend on how much users will have to change their normal way of doing wor to use the solution.
The technology ability of potential users. Many CRM solutions are comple$ and difficult to useA others have a more intuitive loo and feel.
Choose a solution that fits the abilities of your users.
&nce you've determined where your organi#ation fits, you'll want to consider both the comple$ity of the solution and ease *or difficulty+ involved in
adding and evolving functionality over time as your needs change and your users become more comfortable with the solution. 8ere are some red
flags you should loo out for in evaluating solutions in terms of user adoption!
/lans for e$tensive customi#ation
Multiple components that will be integrated to meet your needs
Fac of a trac record supporting .your ind. of sales reps
"unctionality planned .for the ne$t release.
An e$tensive training program
&ngoing consulting re>uirements for any changes or updates
Cost
In CRM, .you get what you pay for. isn't always true. In fact, many companies in the past have overspent on CRM components and features that
never delivered value to their users ( if they even made it out of the bo$. 9ou'll have the most success with a measured approach that doesn't have
to include a hefty initial license fee.
%isting %n"ironment
'hat other solutions and data sources do your sales or customer support representatives use today, what solutions are they most comfortable
using, and what will need to be integrated in some way into the CRM solution you choose to deliver valueG 8ow you integrate e$isting resources
and applications into a CRM pro-ect should not be an afterthought. In selecting a vendor, you'll want to e$plore how it can integrate with your
e$isting environment. 4emand to see a trac record with reference customers in a similar situation.
,est /ractice! Mae a Match
&ne company chose Microsoft CRM because it would easily integrate with bac(end office applications, because the
sales force was already familiar with the Microsoft interface loo and feel, and because the design of the application
closely matched its e$isting business processes. It achieved a paybac of five months.
2lei!ility
In addition to the initial development, integration, and deployment, when selecting a solution, you should consider how easy it will be to mae
changes over time as your needs change. In all lielihood, the way you use CRM will change over time ( and the fle$ibility of the application to
enable you to support those changes can have a significant impact on the ongoing cost of the solution.
&est .ractices
&nce you've determined which solution is right for you and built the business case, you'll want to mae sure you have the ey checpoints in place
so that the pro-ect delivers on your R&I e$pectations.
.ricing and .urchasing
,efore you sign on the dotted line, mae sure you've done due diligence on your contract with the vendor. 4ouble(chec the following!
Is the initial license price per user in line with industry benchmarsG
Are you paying less, more, or the average annual industry maintenanceG If you decide to stop paying maintenance in the future, does your
contact support thatG
If you're purchasing multiple modules at the same time, do you have a clear view of the cost of each itemG Are you sure you should be
buying them all now, or would a phased approach be betterG
'hat commitment has the vendor made to your deployment time lineG If a third party is involved, how are the deployment ris and
responsibility being sharedG
8eployment
/iloting a CRM solution can be a great way to -udge both whether or not the solution will wor for you and how fle$ible and agile the solution *and
vendor+ is in responding to specific needs. Most hosted solution vendors offer a free or nearly free pilot option todayA depending on the level of
customi#ation and integration needed, a pilot of an internal solution before you buy may or may not be possible.
,est /ractice! /ilot "irst
&ne company deploying an e/eople CRM solution used an initial pilot at one location to evaluate the application and get
valuable feedbac on how and when the software should be e$panded to other locations.
:ven after you've made the commitment, piloting to a select group of users before you complete customi#ation is a good way to determine
whether or not the solution wors ( and to gain valuable feedbac on how and with what changes the solution should be rolled out to the broader
population.
,est /ractice! /hase In "unctionality
&ne company deploying a H4 :dwards CRM solution found that while it achieved a positive R&I, it could have
accelerated user adoption and thus shortened its paybac period by introducing functionality to users in phases. A phased
approach would have reduced initial customi#ation costs and the need to train users, who were somewhat overwhelmed
by the features of the solution.
2ine)Tuning 1our R:*
If you've piced the right vendor, planned a deployment with clear milestones, and gotten users on board, you've probably received <1 percent of
the R&I you can e$pect. The tric to really successful CRM is continuing to evaluate and evolve your solution to deliver greater value. 9ou'll also
want to eep trac of potential upgrade opportunities and tae a close loo at the business case ( both the benefits of upgrading and the time and
pain associated with the upgrade ( before you mae a change.
Conclusion
CRM doesn't have to be a scary or risy pro-ect if you've done your homewor. %o matter where you are on the CRM road today, a clear and
structured understanding of the costs and benefits of a pro-ect, coupled with nowledge of potential user adoption and political issues, will help you
draw a road map with clear milestones and ris red flags to deliver ma$imum returns.
!hat Really Matters5 E7tremely Satis$ied 2T Customers
Meta ;roup+ *nc.
By +onat,an Poe
Meta -roup, Inc.
Many CI&s wish e$ecutive perceptions would improve ( yet few tae specific action to advance them. 'orld(class CI&s create business
relationship managers and measure -ust one metric to ensure high customer intimacy.
M%TA Trend< 4uring 011BI1C, global competition, IT resource collaborative control, and alternative sources for IT services and roles will place
greater emphasis on >uantifying and -ustifying IT value. Cultural understanding will play a significant role in implementing the value management
process. ,y 0115I13, 31 percent(plus of Jlobal 0111 IT e$ecutives will combine IT value management with IT portfolio measurement *for e$ample,
infrastructure, applications, information, business and IT organi#ation processes, human capital+ for planning, monitoring, ad-usting, and mareting
business(relevant IT productsIservices and strategic IT initiatives.
Achieving tight, highly integrated business relationships is the cornerstone strategy in achieving a world(class businessIIT partnership. As IT
organi#ations *IT&s+ evolve from cost centers to centers of innovation and value in the eyes and perceptions of their line(of(business *F&,+
clients, top(notch CI&s use structured, building(bloc approaches to accelerate the evolution of their IT&s. In today's environments, where
operations e$cellence and technical proficiency do not guarantee tenure, CI&s must arrange, advise, and audit their IT&s on how to correctly wor
toward customer centricity.
Currently, although 31 percent(plus of Jlobal 0111 firms have appointed business relationship managers *for e$ample, customer service
representatives, business analysts+, fewer than 25 percent of Jlobal 0111 firms have achieved /hase 0 business relationship management, where
the CI& is not the primary liaison between the business and the IT&. ,y applying proven relationship management techni>ues, we e$pect this
Ad(ertisers
number to grow to B5 percent through 0115 and to 31 percent(plus by 011=. More importantly, through the e$change of best practices and lessons
learned, by 0113, 05 percent(plus of Jlobal 0111 firms *versus the current 0 percent+ will achieve /hase B business relationship management,
where a customer(focused center of e$cellence is accountable and responsible for the health of businessIIT partnerships.
4uring the past year, our research surveyed in great detail 2= IT&s that have made the successful transition from a /hase 0 level of business
relationship management to that of a /hase B relationship *the highest possible level of business relationship management+. &ur findings are
shocingly similar to those found by two highly respected third(party customer relationship management firms that have surveyed thousands of IT
service purchasers in do#ens of organi#ations over the past four years. The data also cross(checs against our consulting database of go(to(
maret leaders. ,ased on these findings, we believe that achieving high levels of customer satisfaction boils down to two important >uestions
summari#ed in one singular metric.
As demonstrated in consumer retail research *Reichheld, 0112+, loyalty is highly correlated to profitable growth and to a business's willingness to
partner with an IT&. The challenge has always been in measuring future loyalty ( that is, the willingness of the customer to re(engage in future IT
services. As IT becomes more pervasive and familiar to business users everywhere, IT products and services become lie general consumer
commodities. 'ith cycle times diminishing, street(smart CI&s can now tae advantage of nown consumer metrics and methods.
'hile many customer(focused and customer(centric IT&s measure customer retention or satisfaction, these measures are bacward(looing.
They tell an organi#ation how fast customers leave rather than how customers stay. :specially when customers are held hostage by large
switching costs, satisfaction scores can also mas how few loyal customers an IT& actually has.
Customer satisfaction scores are even less reliable. &ver the years, M:TA research shows that there is a <5 percent(plus chance that satisfied
customers will switch if given a better value propositionA for e$tremely satisfied customers, the chances are still C5 percent(plus. Therefore,
satisfaction lacs a consistent connection to actual customer behavior and partnering.
The :ne Metric That Matters
The defining metric for future customer loyalty then is, .8ow liely would you *the surveyee+ be to recommend the IT&'s services to a fellow
coworerG. In the aforementioned studies, .highly liely. recommenders have been shown to be active promoters of the IT&'s brand, products,
services, and >uality. To gauge responses, a simple 5(point Fiert scale wors well *that is, highly unliely, unliely, neutral, liely, and highly
liely+. )imple scales help new practitioners immediately understand what the solution's focus must be. )uccessful IT&s wor to get their F&,
customers to be .highly liely. recommenders of future IT services.
9et focusing on the promoters and enthusiasts in the customer base ( those who scored the IT& a perfect 5 *of 5+ ( is not a solitary activity. )ince
authenticity matters, e$perienced IT&s also concentrate on optimi#ing the >uality of a customer's e$perience. In other words, recommendations
matter the most from those who also ran the >uality of the IT e$perience a perfect 5 of 5. In short, on a scale of 2 to 5, customers who answer a 5
on the very high >uality of the e$perience and a 5 on their highly recommending this service to a coworer serve as the best references,
promoters, and users of the IT&. 'hen users genuinely promote their e$periences to peers, IT credibility and perception simultaneously improve.
7eep *t $imple and $traightforward
Another lesson learned from these 2= progressive IT&s is to eep customer surveys simple. )imple surveys generate timely data that
management and the IT& can universally act upon. Customer feedbac becomes an operational tool, not a *maret+ research tool. )everal of the
studied firms did engage a third(party research firm to verify results. :$amining their data only confirmed our conclusions ( that simple surveys
enable fast processing and improvement of the results. Customers with the highest >uality of e$perience were more apt to promote coworers to
tae advantage of said services.
%mergence of 2uture .hases
Although many IT&s would have considered /hase B to be a state of IT nirvana, our research of these world(class IT&s indicates a possible
/hase C, where IT&s and business partners understand the corporation's e$ternal customers and their loyalties. In the same manner that the IT&
learned about the business, the business, in these cases, must learn much about IT for the entire team to be effective. This potentially includes
understanding purchasing processes, multimedia channel branding, and entry and e$it barriers. "or a /hase 5 level of maturity, the business and
the IT& must both understand the corporation's *supplierIvalue+ networ of e$ternal customers and their loyalties, where eiretsus *co(prosperity
partnerships+ compete against each other's networs of partnerships.
In outbound business relationship management, IT&s move from being reactive, to being proactive, to being collaborative. ,y focusing on whether
a customer becomes an IT& enthusiast, IT&s will more rapidly achieve the goal of being true business partners, where information and technology
create opportunities for increased corporate growth and profitability.
&ottom 0ine< )treet(smart CI&s now have an emerging, best(practice shortcut to attain long and successful tenures. ,y e$ploiting business
relationship management and a singular, meaningful, forward(looing metric, focused e$ecutives can >uicly evolve to become intimate with their
customers.
&usiness *mpact< Maturing and mechani#ing customer loyalty reinforces a true businessIIT partnership. /artnerships lead to collaboration, agility,
and innovation
Customer Relationship Management Research Center
Additional CRM Resources
Clic over to the C*: CRM Resource Center
Kisit the C*: %R. Resource Center
&r read the current issue of C*: online
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The A&Cs of CRM
'hat is CRMG
'hat is the goal of CRMG
That sounds rosy. 8ow does it happenG
Are there any indications of the need for a CRM pro-ectG
8ow long will it tae to get CRM in placeG
8ow much does CRM costG
'hat are some e$amples of the types of data CRM pro-ects should be collectingG
'hat are the eys to successful CRM implentationG
'hich division should run the CRM pro-ectG
'hat causes CRM pro-ects to failG
'hat industries are leading the way in CRM implementationsG
'hich industry is behind the curveG
What is CRM?
CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to
develop stronger relationships with them. Jood customer relationships are at the heart of business success. There are many technological
components to CRM, but thining about CRM in primarily technological terms is a mistae. The more useful way to thin about CRM is as a
strategic process that will help you better understand your customersL needs and how you can meet those needs and enhance your bottom line at
the same time. This strategy depends on bringing together lots of pieces of information about customers and maret trends so you can sell and
maret your products and services more effectively.
What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of
those customers. 'ith an effective CRM strategy, a business can increase revenues by!
providing services and products that are e$actly what your customers want
offering better customer service
cross selling products more effectively
helping sales staff close deals faster
retaining e$isting customers and discovering new ones
That sounds rosy. How does it happen?
It doesn't happen by simply buying software and installing it. "or CRM to be truly effective, an organi#ation must first understand who its
customers are and what their value is over a lifetime. The company must then determine what the needs of its customers are and how best to
meet those needs. "or e$ample, many financial institutions eep trac of customers' life stages in order to maret appropriate baning products
lie mortgages or IRAs to them at the right time to fit their needs.
%e$t, the organi#ation must loo into all of the different ways information about customers comes into a business, where and how this data is
stored and how it is currently used. &ne company, for instance, may interact with customers in a myriad of different ways including mail
campaigns, 'eb sites, bric(and(mortar stores, call centers, mobile sales force staff and mareting and advertising efforts. CRM systems lin up
each of these points. This collected data flows between operational systems *lie sales and inventory systems+ and analytical systems that can
help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and
pinpoint areas where better services are needed. "or e$ample, if someone has a mortgage, a business loan, an IRA and a large commercial
checing account with one ban, it behooves the ban to treat this person well each time it has any contact with him or her.
Are there any indications of the need for a CRM project?
9ou need CRM when it is clear you donLt have an accurate view of who your customers are and what their needs or desires are or will be at any
given stage in their lives. If you are losing customers to a competitor, thatLs a clear indication that you should improve your understanding of your
customers.
How long will it take to get CRM in place?
It depends. If you decide to go with a hosted CRM solution from an application service provider and you are planning to use the software for a
specific department lie sales, the deployment should be relatively >uic M perhaps B1(;1 days. 8owever, if you are deploying either a hosted
application or an on(premise pacage *involving the purchase of software licenses upfront+ on an enterprise(wide basis *that involves different
departments lie sales, mareting and operations+, you should e$pect the implementation and training to tae months, if not years. The time it
taes to put together a well(conceived CRM pro-ect depends on the comple$ity of the pro-ect and its components and how well you manage the
pro-ect.
How much does CRM cost?
Again it depends. A hosted sales automation application can cost between 735 and 7251 a month for a basic sales automation pacage. If you
want more sophisticated functionality and a greater level of support, you pay a lot more. An enterprise on(premise CRM pacage can cost
anywhere between several thousand to several millions of dollars, depending again on how many functions you purchase and how many
computers or NseatsO have access to the software. "or instance, one company or department might purchase an email mareting management
application or a salesforce automation application, while a larger firm might want to purchase an integrated pacage that includes a database as
well as applications for mareting, sales and customer service and support *via call centers and online+. &bviously, the integrated software
pacage is much more e$pensive.
What are ad"antages of hosted or on)demand CRM "s. on)premise and "ice "ersa?
In the last few years, the maret for on(demand CRM has soared particularly among small and mid(si#ed companies, largely because of fears
about the e$pense and comple$ity of large(scale on(premise CRM implementations. And indeed, on(demand CRM is often a good choice for
companies that want to implement standard CRM processes, are able to use out(of(the(bo$ data structures, with little or no internal IT support, and
donLt re>uire comple$ or real(time integration with bac office systems.
8owever, on(demand CRM software is not always as simple as the vendors would have you believe. "or instance, customi#ation can be
problematic and hosted CRM vendorsL A/I tools cannot provide the degree of integration that is possible with on(site applications. Jetting a
hosted CRM system woring shouldnLt tae as long as a traditional software pacage, but larger and more comple$ rollouts can still tae a year or
more. And while the hosted option reduces the need for in(house technical support, upgrades can still sometimes be technically tricy. In addition,
some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relin>uish control
of their data to a hosted third party for security reasons. As a result, AMR Research predicts that even by 011;, hosted CRM applications will
account for only 20 percent of the total D.). CRM maret.
What are the keys to successful CRM implentation?
4evelop your customer(focused strategy first before considering what ind of technology you need.
,rea your CRM pro-ect down into manageable pieces by setting up pilot programs and short(term milestones. )tart with a pilot pro-ect
that incorporates all the necessary departments but is small enough and fle$ible enough to allow tinering along the way.
Mae sure your CRM plans include a scalable architecture framewor. Thin carefully about what is best for your enterprise! a solution
that ties together Nbest of breedO software from several vendors via 'eb )ervices or an integrated pacage of software from one vendor.
4on't underestimate how much data you might collect *there will be F&T)+ and mae sure that if you need to e$pand systems you'll be
able to.
,e thoughtful about what data is collected and stored. The impulse will be to grab and then store :K:R9 piece of data you can, but there
is often no reason to store data. )toring useless data wastes time and money.
Which di"ision should run the CRM project?
The biggest returns come from aligning business, CRM and IT strategies across all departments and not -ust leaving it for one group to run. In fact,
itLs best for the business departments who actually use the software to tae ownership of the pro-ect, with IT and the CI& playing an important
advisory role.
What causes CRM projects to fail?
Many things. "rom the beginning, lac of a communication between everyone in the customer relationship chain can lead to an incomplete picture
of the customer. /oor communication can lead to technology being implemented without proper support or buy(in from users. "or e$ample, if the
sales force isn't completely sold on the system's benefits, they may not input the ind of demographic data that is essential to the program's
success. &ne "ortune 511 company is on its fourth try at a CRM implementation, because it did not do a good -ob at getting buy(in from its sale
force beforehand and then training sales staff once the software was available.
What industries are leading the way in CRM implementations?
As in most leading(edge technology implementations, the financial services and telecommunications industries set the pace in CRM. &ther
industries are on the CRM bandwagon include consumer goods maers and retailers and high tech firms.
Which industry is !ehind the cur"e?
8eavy manufacturing. As a rule, the further an industry is away from the end customer, the less important CRM is
What is the difference between Large and Small size companies concerning the implementation of CRM processes?

T,e '/pert$s Ans0er
The $undamentals $or implementin# CRM pro"esses are the same re#ardless o$ the size o$ the "ompany, or or#anization The primary
di$$eren"e is s"ale ;ased on our e7perien"e in wor&in# with middle mar&et "lients, we $ind that the de"ision0ma&in# pro"ess is typi"ally $aster
sin"e there are $ewer "onstituents in'ol'ed in the de"ision0ma&in# and it is easier to #ain "onsensus around strate#y, pro"ess "han#es, and
implementation priorities
Additionally, the inte#ration and data *uality issues are somewhat "ontained thereby redu"in# the time re*uired $or implementation and
miti#atin# some o$ the &ey ris&s asso"iated with lar#er implementations This is not meant to imply that CRM implementations are DeasyE in
middle mar&et, or smaller "ompanies, simply that the de#ree o$ "omple7ity "an be less
2t is imperati'e that the smaller "ompanies still $o"us on #ettin# the $undamentals ri#ht @amely, de$inin# a CRM strate#y with "lear business
ob6e"ti'es and priorities, establishin# stron# e7e"uti'e sponsorship, a"ti'ely en#a#in# the &ey business sta&eholders, and $o"usin# on
or#anization "han#e mana#ement $rom the be#innin# to address user adoption issues early All o$ whi"h must be done be$ore laun"hin# into
implementin# CRM te"hnolo#y
;earin#(ointFs approa"h to implementin# CRM is hi#hly appli"able to small or#anizations as well as lar#e5 thin& bi#, start small, deli'er
*ui"&ly, and monitor and measure su""ess as you implement 2n other words, ta&e a lon#0term, strate#i" 'iew o$ CRM, but atta"& it with
tar#eted, well0"oordinated initiati'es $o"used on deli'erin# 'alue rapidly
CRM stands $or Customer Relations,ip Mana1ement 2t is a pro"ess or methodolo#y used to learn more about "ustomers' needs and beha'iors in
order to de'elop stron#er relationships with them There are many te"hnolo#i"al "omponents to CRM, but thin&in# about CRM in primarily
te"hnolo#i"al terms is a mista&e The more use$ul way to thin& about CRM is as a pro"ess that will help brin# to#ether lots o$ pie"es o$ in$ormation
about "ustomers, sales, mar&etin# e$$e"ti'eness, responsi'eness and mar&et trends
CRM helps businesses use te"hnolo#y and human resour"es to #ain insi#ht into the beha'ior o$ "ustomers and the 'alue o$ those "ustomers
CRM
CRM software. or Customer Relationship Management CRM software is an
industry term for software solutions that help enterprise businesses manage
customer relationships in an organi/ed way"
An e$ample of a CRM would be a database containing detailed customer
information that management and salespeople can reference in order to match
customer needs with products. inform customers of service re#uirements. etc"
0n another word. Customer Relationship Management CRM is a set of
methodologies. software. and usually 0nternet capabilities that help an enterprise
manage customer relationships in an organi/ed way"
Customer relationship management CRM includes all business processes in sales.
marketing. and service that touch the customer" 1or e$ample. an enterprise might
build a database about its customers that describes relationships in sufficient detail
so that management. salespeople. people providing service. and even the
customer can access information. match customer needs with product plans and
offerings. remind customers of service re#uirements. know what other products a
customer has purchased. and so on"
)he main goal of CRM is to optimise revenue through improved customer
satisfaction via improved interactions at each customer touch point"