What is CRM Software?

CRM stands for Customer Relationship Management. It is a piece of software that allows people from within (and outside) an organisation to get a view of customer profiles, buying patterns and other useful customer-centric information. Its’ primary purpose is to facilitate a better understanding of the organisations’ customers' from the products or services that they purchase, the main contacts within the customer base to trends and preferences.

In simple terms, CRM software computerises the process of gaining and a retaining a customer, selling to them, and tracking the ongoing relationship with them.

The Future of CRM

CRM is here to stay because of the many benefits that such a system can deliver.

If anything, the use of CRM is set to expand especially with the onset of better mobile technologies (3G*1) and the use of Personal Digital Assistants (PDA’s). More specific CRM software is being developed so than rather taking a ‘one size fits all’ approach there are different solutions according to market types and size of companies. Naturally the demands of a lawyers’ practice is vastly different to a manufacturer of motor components and the needs a small garage differs to that of a multi national company split over many locations.

Why CRM

The purpose of CRM is to be able to track a customer's lifecycle; from the initial lead (or source of contact) through to the sale and thereafter for support, services and future sales.

An integrated CRM system eliminates the need for keeping information about a customer in several places. Tracking a customer’s lifecycle in a potentially haphazard or disorganised way may lead to poor sales results because leads are not followed up promptly, up and cross-selling can be difficult, and customer loyalty can decrease if support requests or complaints are not dealt with in a satisfactory way. A good example is when a sales person speaks with or meets a potential client, the information gained and the actions agreed upon are entered into the CRM system to remind individuals when specific dates or milestones have been reached or when action is required.

As a result, companies are likely to achieve greater revenues and margins through improved processes.

Types of CRM

Hosted CRM

Hosted CRM is delivered by a third party organisation, i.e. your personnel will access the CRM software via the internet. This means that the software and your data will essentially reside on another organisations’ server. This can work extremely well and there are a number of well known vendors that provide this service.

There are a number of advantages. It means that you will not require any form of internal support for your system. Hosted CRM solutions also mean that you pay a monthly cost for the service as opposed to paying for a full licence and then keep it for a number of years and/or wait until a newer, more compelling, version becomes available. Again, this may suit some organisations and comparing the two cost models will enable you to get an idea of the differences.

Finally, you need to consider that if for some reason you can not access the internet, then you will not be able to access your CRM system and data.

On-Premises CRM

On-premises or in-house CRM means that the software package is installed onto your own server allowing users to access the data via your own network.

One of the biggest advantages of this set up is the cost efficiency. If you intend to buy a perpetual or ‘one-off’ licence it may last many years.

Other advantages is that because the software and the data contained within it resides on the organisation’s server or computer system and not a third party’s, the information will still be accessible to people that are travelling, such as sales people who are on the road. This means that they will not need access to the internet in order to view and update the system.

It also means that you will have greater control over your data, but having said that, it is imperative that a backup copy is taken regularly in case there are any issues with your network. 

Functionality of CRM

Among the many benefits of CRM are a number of functions that will benefit not only sales people but also business managers and marketers. They will be able to have far greater visibility of successful campaigns, sales revenues and, more importantly, the ability to analyse the reasons for success or failure. CRM ultimately allows senior people to monitor the performance of the sales department at any given time. This will allow companies to make critical decisions, such as what products are most popular, which products are the most profitable, which region is generating the most revenue and who is the most effective sales person. A CRM system can become a vital part of a company’s sales and marketing process.

Data Capture

One of the most important elements of CRM is being able to store, record and recall vital information such as:

• Company name.
• Contact name.
• Telephone and mobile numbers.
• Address – head office.
• Address – satellite offices.
• Email addresses.
• Other key contacts.
• Size of company.
• Turnover (revenue).

This information can be used to ascertain important parts of the buying cycle; who is the main decision maker, who potentially influences buying decisions etc. Other people within an organisation such as the Managing Director or the Finance Director can also use the information in order to get a better ‘picture’ of how their customers or target customers operate.

Pipeline Management

One of the processes of a CRM system is to allow sales and management teams to monitor what is known as a pipeline. This is basically a list of potential customers that each salesperson is talking or negotiating with, from initial contact through to closing a sale. This enables people to monitor a number of elements:

• Who is the most effective sales person?
• Which deals are progressing?
• Which deals are not and why?
• Actions and next steps such as when to make contact again and what activity should occur e.g. sending a proposal with pricing and next contact date. A date can be entered into a person’s diary and a reminder automatically generated when the time is right to make further contact.
• Sending other information such as product overviews and marketing collateral.

Pipeline management is also used to monitor which leads are ‘hot’ and need to be dealt with as a matter of urgency. It is possible, for example, that a potential customer has budget and timescales, and needs your product immediately or perhaps is about to purchase from a competitor without meeting one of your sales people. It is also important to understand which enquiries have gone ‘cold’ as it may reflect on your company’s relationship with the customer or it might be that budgets and timescales for purchase have changed and that it may require contact at a later stage.

Ultimately CRM can also be used to determine why certain deals have not closed and it is important that the reasons for this are understood. This may highlight a product issue or perhaps the need to train a particular sales person.

Lead Management

Another function of a CRM system is ‘lead management’ which ensures that a lead is followed up by a sales person immediately together with actions and timescales for certain events e.g. meetings, presentations and proposals.

Leads, or enquiries, are people or companies that show an interest in your products or services at generally an early stage. Essentially this means that the individual has just started to investigate the potential benefits of the company’s products or services. 

Leads are an invaluable source of business and potentially costly to generate. Enquiries can come from a number of sources such as someone phoning the organisation directly, or generated through exhibitions and events, email campaigns or web marketing. The lead management functionality enables marketing and management teams to analyse the effectiveness of various campaigns, to monitor who is dealing with what (potential) customer, and to measure the outcome, i.e. if a sales person has sold something to that customer and the time-scales for doing so. CRM is therefore also excellent at determining where a lead was generated from and the output is useful in measuring the success of that medium for lead generation.

Lead management can also be used to capture the key information and determine who is best able to deal with the lead, because many companies operate on the basis that sales people work either in a territory, region or industry type. For example, it is pointless distributing a lead that is based in Manchester to someone that manages London and the south east!

Marketing and Campaign Management

This is also known as Marketing Automation meaning that a CRM system will allow marketers to more effectively run campaigns to particular customers, based on, for example:

• Industry sector.
• Products currently purchased.
• Communication of new products and services.
• Communication of upgrades and products that may be of benefit.
• Invitations to seminars and events.

Furthermore, the CRM system will enable detailed analysis about customers, looking at, for example, from which industry sectors they are, why they purchase your company’s products, which products are most popular, the most common size of a customer etc. Clearly, it is pointless trying to sell a product to a company or industry type that has no need for it. A good example of this is where a set of legislation compels a type of company to maintain a system in order to comply with the law. This is the case with financial services and compliance products which ensures that critical data is kept by banks in order to meet the regulations as required by law. Companies that don’t have this issue are most unlikely to purchase this particular product. With a CRM system in place you will be in control of what you sell and to whom you sell.

Benefits of using CRM

• CRM helps your organisation get a better insight into the behaviour of customers', such as when they typically buy, what they buy, discounts offered and so forth. For example, if sales person x is on leave for two weeks, then sales person y can continue managing a customer because they will have all the relevant background customer knowledge For example, they would know not to give more than xx% discount on certain items rather than having to guess or somehow find a way of gleaning that information.

• It will help you improve your customer service because it allows individuals, whether sales technical or support personnel, to have access to all the correct information required to deliver a good service. For example, an IT engineer may need to contact a different person from that of a salesperson.

• It allows users to maximise sales opportunities because they can spot potential trends early on, allowing them to ‘cross-sell’ other products and services and 'up-sell' existing products, as well as improve closing rates.

• It helps you to profile customers' in order to analyse particular market sectors. For example, it may be possible to analyse the information derived by looking at all of the information based on for example ‘lawyers’ who will have a different buying pattern and needs to ‘doctors’. As a result, it will be possible to put in place specific marketing strategies to meet those requirements.

• It will allow senior personnel to gain a better view of sales activities. This can, for example, highlight a particular weakness that can be remedied through sales training.

• It allows people to share problems and experiences from within their client base. For example, larger companies sometimes suffer from communication issues, perhaps there are many individuals working on multiple projects making it difficult to share common issues with a product, service or even a negotiation. Many sales people experience the difficulty in getting access to useful information, such as finding someone within their company who has dealt with a potential customer similar to their own. Solving these types of communication problems can be invaluable for companies.

• It allows both sales and service departments to see the status of a sale, an outstanding service call, or a complaint that needs to be resolved.

• Improve efficiencies. This can be achieved by comparing the best and most productive sales person to the least productive and putting a strategy in place to improve underperforming sales staff and reward high achievers.

It enables sales management to track performance by individuals according to the number of leads received and generated, how long it takes them to close a sale and the average order value per sale.

• It allows sales management to monitor activities and make improvements before issues may occur. It can also be used to analyse if certain individuals are better suited to selling certain products and which sales people are best suited to particular market.

• It can also be used to help determine a company’s marketing strategy. For example, analysis of leads and other data may highlight issues within a product that means that an organisation’s product portfolio needs to be supplemented, or that the company would be better to focus on other industries where analysis show that the products are well received.

Disadvantages and potential pitfalls

• Data is stored centrally so it is important to keep a backup copy. If there are any issues or a problem with the server then this could be a disaster unless the necessary information can be retrieved

• It can be easy to make too many assumptions about trends because, like many computerised processes and methodologies, it is easy to compartmentalise say, ‘lawyers’ and assume that one customer's needs, objectives and expectations are the same.

• Unless the CRM system is updated regularly and all personnel whom it affects use it, then it will lose any potential gains. For example, if a particular sales person consistently fails to update and enter the latest information from their conversations, then actions and activities will not be completed which in turn can have a negative impact upon the customer and sales revenues.

• It should be noted that the data can be copied or stolen by a disgruntled sales person or employee.

Five steps to successfully buying a CRM System

Step One

• Identify the needs of your organisation and the users. It is vital to gain feedback from key personnel and departments, e.g. sales, marketing, service and support and HR if a company has an HR department, on the basis that a CRM solution is generally a company wide implementation and can effect the way in which people have worked or operated for years.

• Understand your requirements – this can be achieved by talking with perhaps two or three CRM providers.

• If possible test a couple of systems for a few weeks in order to see how effective it is. That said it needs to be done in such a way as to not impact the day to day running of the organisation so you may want to choose a small number of people to use it. At the very least, see a few demonstrations and see if it matches your requirements.

 Step Two

• If possible view a live demonstration at an organisation similar to your own.

• Decide whether a hosted solution or an in-house system meets your needs best.

• Make sure that you view CRM solutions that meet your organisation’s needs e.g. if your organisation is a manufacturer then look at suppliers' that understand the industry. You want to avoid having to make and pay for complex changes to the system in order to meet the needs of your organisation if there is already a system available that matches those requirements.

• Remember that you may need to subscribe or pay for updates after the first year. Find out how much annual subscriptions cost, and factor that in when comparing prices. Check for any special offers that include extra annual subscription. Budget for potential maintenance or support costs.

Step Three
         

• Identify the Right Partners/Providers.

• Use Conjungo’s ‘Find a CRM’ search facility on www.conjungo.com.

• Who has the experience of working with a company of the same size and profile as yours?

• How many similar installations have they made?

• Ask for references – ensure that the company is capable and reliable.

• Ask to speak with a couple of their customers' in order to see what benefits they have gained.

• Get a credit check to ensure that they are financially stable. You can get this directly from the supplier details found from your Conjungo search.

Step Four

• Request a proposal from three or four of your preferred suppliers'.

Step Five

• Select a Proposal.

• Who best demonstrates that they understand your business and your requirements?
• Is the solution flexible and scaleable and therefore able to meet future demand? You don’t want to find out later that by investing a little more money now will have saved you money later.
• Is it cost effective? Does it demonstrate clearly the functional benefits – rather than telling a list of particular features, does the proposal clearly show what the benefits are? There is no point in spending money on a system with features that are of no benefit or that you will never use!
• How much will the software (licences) cost?
• How much will software support cost?
• Can any savings be made by agreeing a multi-year contract for support?
• How will your potential supplier support and maintain your system afterwards?
• How much will this cost?
• Have you spoken to a couple of your preferred supplier's customers'?
• Agree on financial terms – you may be required to pay a deposit but do not pay the whole amount in advance of delivery.

Simple steps to installing a CRM solution

1. It may be necessary to use your supplier's consultants to make any changes or modify the system in order to meet your exact requirements.

2. Depending on the system, you may either have to install the software on the main server and potentially a copy on remote users’ laptops. For example, if you have mobile sales people they may need to access the CRM data while on the move.

3. Make sure that you have a capable administrator trained, who can add new users and give access to the relevant personnel. Likewise you may want some people to be able to access information but not to make any changes to it. For example, while it may be necessary for sales people to access the system, you may not want them to be able to change any information unless it is their own customers'.

4. If the organisation has someone who is responsible for personnel matters, they should be kept involved with all of the processes and procedures.

5. Only certain senior level personnel should have access to view the all modules as you don’t want everyone to be able to see confidential information.

6. User training. This is simply to ensure that everyone is comfortable with the         CRM package and to help them set it up in order to meet their requirements.

7. Communicate to all users and put a policy in place that ensures that the system is used and updated on a daily basis.

Conclusion

CRM systems provide a very effective method of improving efficiency and maximising revenue potential from your customer base.

It is also a great way to be able to analyse your customers’ information; and plan, respond and change your organisation to meet trends and changes.

Ultimately though, the biggest drawback is that unless personnel enter the information regularly and accurately, the system will be a waste of money and the information it provides will be wrong. Simply put, garbage in = garbage out!

CRM - FAQ’s

What is CRM?

CRM means Customer Relationship Management.

It is a software package that stores all the information about your contacts and customers'. It can help you track your customers’ buying preferences and the typical products that they purchase, the price paid, discounts given etc.

It can also help you track your new enquiries, leads, prospects, telemarketing or marketing campaigns designed to generate more business, as well as track your entire sales process. A good CRM package lets you run forecast and revenue reports to help you maximise on all your sales opportunities. It can also track lost business to help you align your sales efforts to where they are most successful.

Why do I need it?

It will allow you and your colleagues to access information more quickly and easily. Customer and contact information, record details of telephone conversations, meetings, actions and activities that need to be completed will all be stored in one place.

Is it something that I can install myself?

It is very possible to install CRM yourself but naturally this will depend on your requirements and numbers of people using it. It can get quite complicated so you may wish to take advice. It may be more economical in the long term to make sure that it is set up correctly by using a supplier than waste much of your valuable time to do so.
 
What is CRM on demand?

On demand or hosted CRM is a service provided by a third party company whereby you can access your information via the web. However, do appreciate that because you access information via the internet, if for any reason you can not get to an internet connection you will not be able to get the information that you require.

That said, both systems have the advantages and disadvantages.

What do I need to look out for when purchasing CRM?

There are some fantastic vendors (manufacturers) of CRM software. These have superb technology and a wide array of certified resellers who understand your business, and the technology you currently use.

How do I find the right supplier to buy from?

Conjungo is a great starting point because it will let you search for a supplier according to your location, company type, size and whether they have the right accreditations. Furthermore, Conjungo is completely unbiased, lists most of the major vendors’ resellers, and it’s free to use.

What’s the downside of installing CRM?

The main potential downside is that unless it is used properly by everyone and kept up-to-date, it will not be effective. CRM software is only as good as the information held within it.
 
How do I measure whether the package I’ve purchased is making me money or saving me money?

You should be able to measure a number of ratios, such as time from receiving a lead to closing it, across the company and against individuals, profitability per sales person, best selling items etc, so ultimately if your sales have increased since installing CRM versus your revenues and margins prior to installation you know it's working!

Is CRM easy to use?

Yes - or at least it should be! If it isn’t then people won’t use it. This can be overcome by some training but generally speaking, CRM packages are very intuitive and easy to learn.

You may want to look at and trial a few before making a decision to ensure it will work within your working environment.

Do I need a technical team to support CRM?

No, unless you are a very large organisation. With hosted or on demand CRM, this is one of the key benefits, in that you will not require any resources to support or configure the system.

However, if you decide that you want the software installed on site, then this is the point when you should work with a vendor’s reseller as they will be able to provide the service and support that you require.

I have an accounting software package – can I get my CRM package to integrate with it?

This depends on the CRM package and the accounting software that you are using. Some do work together, and some cover both areas within the same package, but it best to qualify this before making a purchase.