CRM:  What is it and how can it help drive business?

Brent Leary

 

Over the past few years cost reduction has been the focus of many business owners and executives. As the economy slowed to a crawl businesses were forced into a bunker mentality, limiting expenditures to the bare minimum. Although companies are still cost-conscious, 2005 is shaping up to be a promising year for small and medium-size businesses (SMBs). With revenue growth back in vogue, now is a great time to look at customer relationship management (CRM) and why you may need to consider it for your business.

 

Customer Relationship Management: People, Process and Technology

Performing an internet search on “CRM” returns over twelve million hits and almost as many definitions for customer relationship management.  A formal definition of CRM includes the integration of people, process, and technology to maximize relationships and provide seamless coordination between all customer-facing functions.  In plain terms, CRM uses technology to implement strategies aimed at helping companies acquire new customers, sell more to current customers, analyze the effectiveness of marketing activities, and provide better service to increase customer retention. 

 

CRM applications increase the accessibility to customer information across all organizational levels via a centralized database.  With this foundation, these applications execute targeted marketing campaigns, enhanced customer analytics, contract management and sales forecasting among other capabilities.  Integration with popular software like Microsoft Outlook and Microsoft Office increases the efficiency of using customer information. Corporate websites can incorporate CRM to improve customer interactions while driving down the cost of acquiring and servicing them.  Of equal importance, these systems can automate routine business processes, creating a more consistent customer experience from lead generation through to service and support.    

 

In summary, CRM is how your business plans to interact with current and potential customers to create loyalty and profitability.

 

Why Is CRM Important?

 

Although many benefits were identified, the cost of CRM excluded all but the largest companies from taking advantage.  Microsoft's entry into CRM coupled with the emergence of Salesforce.com’s pay-as-you-go subscription model, firms of all sizes can implement complex customer-focused strategies at a fraction of the cost paid a few years earlier. In order to compete, other leading vendors are adapting their business models, clearing the way for CRM to be highly functional, affordable, and successful.

 

According to the Aberdeen Group, the CRM market is expected to reach $17.7 billion by 2006, growing at an average annual rate of 6.7 percent. Spending by SMBs is expected to exceed that of larger enterprises due to potential top and bottom line growth and friendlier pricing structures. 

 

With the economy growing, now is the time to craft your CRM strategy.  As the numbers above point out, your competitors are.

 

About the Author:

Leary is a partner with CRM Essentials, a customer relationship management consulting/advisory firm assisting companies to formulate and implement profitable customer-focused strategies, including sales automation, web self-service and marketing automation. He can be reached at bleary@crm-essentials.com or www.crm-essentials.com.