Alan Jackson, The Better Business Bureau Ltd.
To many companies, strong and enduring relationships with customers are vital to their business success. Customer relationship management (CRM) software is a toolset that can provide facilities and crucial insights into the behaviour of prospects and customers that will help to improve these relationships. CRM should be considered an essential part of any strategy aiming to lower the cost of customer acquisition and retention, improve productivity, and increase profitability.
But many small businesses are failing short of the return on investment (ROI) they anticipated for their CRM implementation. No CRM system will deliver significant ROI without a clear strategy to guide its implementation and use. In this short article I will offer some practical advice for ensuring that your CRM initiative delivers real value.
The overall goals of a CRM system are to help find, attract, and win new customers, nurture and retain existing customers, entice former customers to return, and reduce the costs of marketing and of providing customer services. Although CRM software is undoubtedly a significant enabler, it can’t perform miracles, as some business owners seem to think! Just like most other software applications, CRM simply manages the data and streamlines processes that would otherwise be time-consuming, challenging, or repetitive.
CRM applications typically provide automation of sales activities (known as “Sales Force Automation”), such as lead tracking, contact and appointments management, and sales funnel analytics. Also included may be marketing, customer service, and technical support. But if the processes are flawed, inaccurate, vague or just plain broken to begin with, no level of automation or fancy application features will fix things.
So, to see any real benefit from a CRM application, your sales funnel and its metrics, customer relationship strategy and processes must be sound and closely aligned with the mission of the enterprise itself. Only at that point can a CRM software solution be chosen that can closely model your business processes.
Establishing a CRM Strategy and Vision
First you must to review your sales processes, to confirm that all the steps (typically, Prospecting, Preparation, Qualification, Demonstration, Negotiation, Close, and Follow-up) are clear to your sales force, effective and efficient. To really understand the current condition of the relationships between you and your customers you will need answers to a number of fundamental questions that reveal insight into the rapport you have with your customers – ask “what are we doing to …”:
- make doing business with us a more positive and satisfying experience?
- improve prospecting?
- remove the barriers to the conversion of prospects into new customers?
- encourage customer loyalty to drive repeat sales?
- increase business insight?
The answers will provide a sound basis from which to derive a clear future state, by changing the question slightly to: “what else can we do to …”.
Your emerging strategy must accommodate the alignment of both people and process with the technology. People need to embrace the system enthusiastically – there will be no benefits if it’s not used. Processes must ultimately be mapped within the system and the technology must be sound, with all the right features in place, the right fit to your business, and the right interactions with other data sources.
Deriving CRM Application Requirements
Armed with a “to-be” strategy based on the simple analysis of the “as-is” condition, you should then be able to establish the business processes you need to deliver the vision.
The best IT requirements tend to flow naturally from well documented, efficient processes that are well understood, effective, and applied consistently by the workforce. Without process clarity and alignment, automation is highly unlikely to produce clear benefits. It’s always a good idea to get some in-service experience of the processes before committing them to software. First establish the best, most effective way of conducting business, document it, and then enshrine the “one best way” into the CRM system. It’s never a good idea to automate without first proving working practices, you may simply end up locking-in poor process.
With requirements derived from effective processes you are now in a position to choose a CRM package that will meet your needs. It should offer “made-to-measure” facilities that can be customised to meet your current and future requirements. Avoid “one size fits all” applications that may never be a good fit with your business requirements.
Too often a business will select and implement a terrific software solution, only to struggle to get the staff on board with the new system. Everyone in the business must clearly understand what they are trying to accomplish with the tool and the processes that they need to follow. Even the best CRM system will fail to deliver if the end users aren’t able or willing to use it correctly—or worse yet, if they don’t use it at all.
Increasingly CRM vendors offer subscription-based Web-based tools (Cloud computing and Software as a Service - SaaS), which are accessed using a Web browser. Customers don’t need to purchase and support local hardware. Pay-as-you-go subscriptions mean not having to make a substantial investment in the cost of outright purchase. They usually allow incremental expansion and the user is not locked in to the application. You should seriously consider the option of Cloud vendors to lower the cost and technical barriers to entry.
Beware the vendors that will sell you a software license and walk away. Look for an established vendor that can offer a long-term relationship to ensure ongoing CRM success – WinWeb is a good example. Otherwise your shiny new CRM systems may end up as little more than a management reporting tool, leaving the actual customer experience virtually unchanged and the benefits unrealised.
A CRM initiative should be approached as an opportunity to refine and re-engineer processes to improve their clarity and alignment. You should never blindly layer software on top of vague, ill-defined processes and working practices, expecting the software to magically bring order to chaos (see: “A Six-Step Service Improvement Plan to Avoid Costly and Ineffective IT Investment”). You could simply end up “cementing in” many of the ills of the business.
Software is only one component of a CRM initiative’s success. Equally important is the alignment of clearly defined processes with an effective sales funnel that is supported by actionable metrics. Without clear business objectives, process clarity and alignment, even the best CRM software will fail to deliver desired results.
So, if you are embarking on a CRM initiative, you must look beyond a simple checklist of software features to establish a philosophy and approach that works from a business, rather than just a technical, perspective.
Alan Jackson is a business productivity architect, WinWeb Business Mentor and Green Deal Consortia consulting partner operating in the UK Midlands region (www.bureau4betterbusiness.co.uk). Follow me on Twitter, email me at alan.jackson@B4BB.co.uk or call me on Skype (TheBetterBusinessBureau). Feel free to leave comments or subscribe for more small business productivity insights.