Why do you need a CRM in Your Company

Over the last year or so, as I’ve been reading different blogs and forums, I’ve noticed an increase in the number of people who mentioned plans to implement CRM in their organization in the near term. At its core, CRM is a tool which combines techniques and technology to achieve greater results and get more out of a company’s business. Since CRM implementation is not an end goal onto itself, but is rather a means for achieving desired results, it follows that the recognition of CRM as a valuable organizational tool is taking hold in the business community.

Let’s explore some of the reasons why CRM is starting to get so much attention:

Modern sales approach is no longer regarded as a bland, generic procedure of days gone by. Today’s sales methodology is viewed as a fairly intellectual, creative and complex multistage process, a masterful mixture of art and science. We all know that it is getting increasingly harder to gain and retain a client’s attention. You can be spending a lot of energy or money, sometimes both, and finally the deal may be lost for any number of reasons. In the IT services business, we know how hard it may be to build a trusting relationship with a client; in addition, product sales may present their own challenges in the relationship building area. For these and other reasons companies develop unique sales processes and require CRM to support them.

Companies wish to expand their presence in the market and increase efficiency while providing clients with personal attention. You may have a mandate for serving more clients with the same team. Ask yourself, does everyone who communicates with a customer know what their coworkers said to the client or did for them in the past? Do your clients require 24/7 attention? You may need CRM with features that would allow your reps serve a large number of clients, with activities tracked and visible by other team members, personal folders for each client, detailed data such as activity history, sales stages, segments and demographics, etc.

In today’s ultra-competitive environment, efficiency is more important then ever. By analyzing customer and lead information you can learn things that will help you become more efficient and effective. The goal is to capture and analyze your customer information in a way that would make your sales more targeted. This will allow you to get clients faster and keep them longer.

CRM has the potential of helping you enhance your company’s image and reputation. Just imagine a testimonial about your firm: “Whenever I call, I always get to talk to knowledgeable people who are familiar with my account and my issues.”

Let’s say you are working for a hustling and bustling startup, then almost inevitably you want to look and sound larger and more established than you really are. Can you afford having reps say: “We are getting a lot of new customers this week and I forgot where we left it with you last week. Can you remind me?”

In other words, the goal of any business should not be just providing good service. We should all strive to provide outstanding and remarkable service, and without a serious CRM initiative, achieving great service can prove to be elusive.

Setting Initial Goals for Your CRM Implementation

The shortest route to success in implementing CRM is to set up a few easily defined goals. It is best to limit these goals to short term project objectives. Only about 5% of companies in the US use CRM. The other 95% still use spreadsheets to track their customers, primarily because they believe that CRM is too complex and too expensive. Remember, all you need to do is follow a well known rule, “Keep it as Simple as Possible, but Not Simpler,” and tangible results can be achieved almost immediately. The key is not to pause at the initial attempt for too long, but rather keep enhancing the system step by step. According to Gartner, as many as half of all CRM implementations fail. Often, this happens because people do not realize that building a customer-centric company takes time and planning. It needs to be done in stages.

Now let’s examine the following as examples of the most important three goals that a company may set for itself, keeping in mind, however, that different companies may come up with a different set of goals.

1. Improve Customer Service to increase customer loyalty.
2. Serve more customers and leads with the same team – work more efficiently.
3. Expand business development, using CRM as a tool.

First Goal: Improve Customer Service to increase customer loyalty.

 

You have to listen carefully to your customers in order to improve service. Customers should feel that you are eager to listen to them. Start from the point, where your employees are encouraged to understand the customers better. Every person who comes in contact with the client needs to be aware who, when and what was communicated to the customer by other team members, and what was communicated back. Make all communication, contracts, documents, calculations and requests from leads and customers available to the marketing and sales teams. If you have a support department, keep them in the loop as well. A productive long term relationship can only result when a customer believes that your staff can understand his needs, and you will not always have to battle over price.

Customers will become more loyal, when your words and actions are sharply targeted to their needs and expectations. Separate your customers into different segments. Depending on the nature of your business, you may group them by industry, revenue, or, if you service consumers, by age, sex, interests, etc. Once you accumulate enough data about each client, CRM can do wonders in helping you achieve greater customer loyalty.

Every business needs to pay special attention to their largest and most important customers, and spend extra time and effort servicing them. But do all your employees know who your VIP customers are? A properly implemented CRM system can help you not only classify all your clients into useful categories, such as Gold, Silver, etc., but also help your sales reps serve the clients appropriately and even encourage upward customer mobility through an upgrade process. Correctly timed and well structured offers to the right customers at the right time can not only earn your firm a few extra dollars, but also serve as proof to your clients that you understand their individual needs.

The examples used here may not be applicable to your particular situation, but there must be lots of different areas where your service can be improved especially in the eyes of your customers. Just make a short list and chances are that most, if not all, the improvements you’ve thought of can be implemented with the help of a CRM system and techniques.

Second Goal: Increase in Effectiveness and Profitability — Greater output from the same team

Our next objective is to increase team efficiency and reduce operating costs. In practical terms, this means increasing the number of leads and clients that can be served by your existing team. This can be accomplished by implementing a more efficient sales strategy and process automation. Moreover, you should realize lower costs and improved customer service.

Here is an example demonstrating how team efficiency can be achieved. A couple of years ago, one of our teams worked on a CRM implementation for a division of a large client, a well known communications equipment manufacturer and service provider. The client had a rather involved and complex manual sales process. Servicing each lead required many hours of filling in and maintaining a profitability calculation spreadsheet with subsequent approvals across various internal departments. After the offer was approved internally, it would be presented to the client, which often resulted in requests for additional adjustments followed by additional negotiations and the process would start all over again.

Each spreadsheet normally contains around 200 complicated formulas that would aid managers in completing proper equipment lease calculations, before a proposal could be presented to the client. These formulas would typically include a large number of other variables dealing with evaluation of profitability, contract provisioning, sales commissions, etc. So a corrected version of the spreadsheet document had to be passed from department to department and from person to person before anything could be presented to the client.

During the discovery and analysis stage of our CRM implementation engagement, it became clear that the existing process of generating and managing numerous spreadsheet documents, and the overall sales process can be made much more efficient. The existing process was clearly flawed and resulted in unnecessary and lengthy delays, and the calculations were not always accurate because the task was overly complicated and cumbersome.

With management's support, we used CRM as a platform for designing, developing and implementing a much more efficient sales process, which eliminated the use of spreadsheets. Every step of the sales cycle was optimized. Now all parties, including the customer and every internal department involved in the transaction, were able to collaborate in real-time within a single web-based software environment. The process was automated from the very first step, starting with the initial data collection to the final product delivery -- all without losing precious time and effort in maintaining various parts of spreadsheets, emailing documents back and forth, and re-working them numerous times, etc., etc.

As a result of improved operational efficiency, the same number of sales representatives were able to serve more clients. The clients were happier and more loyal since now, in addition to having access to the latest and most current version of their account information, they were able to take an active role in the process of defining their individual requirements and managing the value proposition from the beginning to end. In other words, from the clients' perspective, they were no longer simply on the receiving end of a proposal from their sales rep, but rather were proactively involved in negotiations and real-time proposal management -- all the result of carefully planned CRM-based processes.

Your own unique sales methodology may not involve calculations of such complexity, but the concept of getting the client more involved and engaged is always a good idea under any circumstances. And let's not forget an important and vital sales and marketing principle: always keep your name in front of the client in a positive, helpful and constructive manner. You should apply this practice to your leads as well – send them information that may be of interest, ask them about their needs, offer help, or maybe just helpful tips and suggestions. Even if the initial contacts don't always result in an immediate business transaction, chances are that a persistent marketing effort implemented by means of a good CRM system will one day bear fruit.

For a sales or customer service process to achieve maximum effectiveness, the importance of having a 360-degree view of the client's needs cannot be overestimated. One of the major goals of any CRM software should be putting such comprehensive view at the fingertips of every employee who comes into contact with your clients. This is not a new concept; in fact that idea was expressed by Bill Gates as the Digital Nervous System more then a decade ago.

Still there are managers, who would permit a sales rep to accumulate and maintain all the client relationship knowledge in his head. Some sales reps collect customer relationship related information in spreadsheets or other documents that often reside on the hard drives of personal laptops, which may be better than nothing, but still a far cry of what's possible with a good CRM implementation. Such primitive practices are much more prevalent than people like to admit. The pertinent question is why? Is it because businesses feel that this "simple" approach is optimal and most effective, or, more likely, do we just have to do a lot more work in promoting best-fit CRM-based practices, that have been proven to work over many years in multiple settings?

Third Goal. Expand business development, using CRM as a tool

So let's now look at the goal of expanding business development, using CRM as a tool. And what do we mean here by tool? What kind of tool is CRM?

Is it a combination of software, hardware and a set of IT technologies? Yes, but not only, and those are being commoditized as CRM becomes more and more ubiquitous.

It would be quite useful, for our purposes, to also view CRM, is a set of processes. But what are these processes that can help bring about business improvement? The answer largely depends on the unique nature of your business.

Are the human factor and internal company structure important considerations? Yes, as it turns out, these two factors are critical in defining business processes, as technology must fit and anticipate human needs, not the other way around.

Above all, CRM is not just software, hardware or a set of procedures implemented for their own sake. CRM is an implementation of a business strategy, a way of reaching well defined business goals. CRM deployment goes well beyond hardware procurement and software configuration. It must also involve qualitatively reworking approaches to business processes implementation, based on CRM best practices and your company's experience. A clearly defined business strategy is required before it can be applied and implemented within the bounds of a carefully selected CRM solution.

Once the business strategy and the related processes are defined, it is important to make sure you have the necessary technical expertise for a successful implementation, training, rollout and ongoing support. It is often a good idea to bring in temporary help from the outside if your staff does not have extensive hands on experience with your selected CRM solution. CRM solutions tend to be complicated and often need to be optimized to your specific needs, so involving the right people can be crucial.

Some say that having a CRM implementation in your business should be viewed as a given, something like water or electricity in your home. It is no longer a question of gaining a competitive advantage. It is safe to assume that your competitors are either already using a CRM solution or will be implementing one soon. CRM is an indispensible part of a modern enterprise, and, if done right, it is an essential tool in reaching your business goals, such as improvement in your business development processes, and helping you realize your sales and marketing objectives.

 This blog came from this URL:  http://blog.crm-insider.com/2008/01/intro.html

Preface

Some of my readers today will be aware of a beautiful operating system that goes by the name of Linux. For those who are not already familiar, here is a brief introduction: Linux is a free open-source alternative to Windows and Macintosh. Based off of Unix, Linus Torvalds laid the framework for the kernel many years ago and then made the source code open to all. He still works on the kernel today, but he's not alone; millions of programmers around the world work to improve Linux with their free time. They've worked hard to bring Linux to maturity, and as of the past couple years, it has reached a mature stage where the average computer user is more than capable of using it. In other words, you no longer need to know how a computer works or how to program in order for Linux to be useful to you.

So why am I bringing up this topic? Quite frankly, there aren't enough Linux users accessing TechwareLabs, and I believe this needs to change.

Whether it's because you've never heard of Linux, have an interest, or tried it years ago when it was still young and was disappointed, one thing is certain: you're missing out. I'll be elaborating further into Linux in future articles, but for now, here is a nice introduction.

What do you mean by open-source?

The source code is freely available on the internet per the GPL license. You are more than welcome to view the code, edit it, and republish a new product (assuming you know a thing or two about programming). The only catch is that you have to release your product under the very same GPL license.

This approach to software truly throws the concept of "proprietary" out the window, and is no doubt confusing to anybody who is business-minded. It's a foreign concept for many as to why one would develop a product and not claim intellectual property rights. The Linux community, in general (though there are exceptions), does not seek to gain profit. Rather, they put their time into Linux for pride and the occasional "thank you."

There are companies that sell Linux, though.

This is partially true. They're still licensed under the GPL, which means they are required to release the source code to the general public. What companies such as Red Hat and Novell are doing is not selling the operating system, but rather they are selling support, primarily for servers. Even so, you can use their products for free. Red Hat Enterprise Linux has fees attached to it, but Red Hat sponsors an open-source community around Fedora, which is the free alternative, developed by programmers in their spare time. Similarly for Novell SUSE Linux Enterprise, there is a free alternative in openSUSE.

Windows works fine. Why should I use something else?

Here, we get to the heart of the matter. Why switch, you ask? What's the point? Simply put, Linux is faster, more stable and above all, easier to use. The speed is due to higher efficiency in storing/retrieving information. The issue of stability isn't even questioned by [knowledgeable] die-hard Windows fans. Ultimately, the most controversial claim I've made is that it's easier to use.

This is where the argument rages on within the desktop market. There are many long-time Windows users who try Linux, and are scared off, upon which they claim that Linux is hard to use. The fact is, Linux is different, but I would argue that this is a good thing. There is definitely a learning curve, as there always is when you try something new, but the more you just play around with Linux, the more you'll find it is simply better.

How is it better? What makes it easier?

Everything is better organized. For starters, you know that little program on Windows, Add/Remove Programs? Raise your hand if you've ever actually "added" a program using it.

I see a few hands from people who have via a NT system or something similar, but other than that, it is unlikely you've used Add/Remove for anything other than "remove" (though Vista does allow for the user to download programs directly from Microsoft, a feature suspiciously appearing long after Linux started doing the exact same thing). In Linux, this little program is called the "package manager", and this is where you both add AND remove your programs. Everything that's currently installed, as well as everything you're able to install from the supplied servers appears in an easy-to-use catalog. For the most part, everything you need is right there in one place. Want to install an office suite? How about an IM program? Or how about a game? Just go to the respective section and choose the program you want. Check the boxes for everything you want to change (install/uninstall) and push the appropriate button to update your system (specifics will differ depending on the package manager used by the distribution).

So what is a distribution?

Earlier, I spoke about the GPL license and how it entitles you to do literally whatever you want with the code. The result is a large variety of differing releases of Linux operating systems, called "distributions" or "distros". The Linux kernel is the 'brain' of the operating system, and is the same for all distributions. What's different is the author's interpretation of what an operating system is supposed to do, and there are a lot of these interpretations. This results in what is probably the scariest part of playing with Linux for the first time: which distribution should I choose? And for that matter, where can I get it?

As a first step, go to www.distrowatch.com. This website provides the latest news on Linux distros, and a glance to your right shows the top 100 distros in page visits.

Wait! What? Top 100? How many are there?

Don't let that concern you. Yes, there are a LOT of distributions, but keep in mind that the vast majority are specialist distros, such as SmoothWall, which provides a live cd with their firewall software, thus allowing you to sample the firewall without installing it onto your production machine, and potentially having problems. There are only a handful of true distributions if you don't include the various derivatives that offer a few minute changes. As an incomplete list that hits on the most popular distributions, we have in no particular order: Debian (and its derivatives Ubuntu, Xandros, Damn Small, Knoppix... and Ubuntu's derivative Mint), Mandriva (and its derivative PCLinuxOS), Gentoo (and its derivative Sabayon), Slackware (and a lightweight OS based off its packages, Puppy), Red Hat and Novell (mentioned earlier), and then there are the BSD-based distributions which are not Linux, but is a cousin and is also based off of Unix. I know I'm probably ignoring somebody's favorite distribution and I apologize, but there's no way I can make a complete list without boring everybody to death.

Wow, that's still a lot. What should I try to start out?

Ubuntu gets a lot of publication, but I'm honestly not a fan. I believe they try too hard to make the OS all-in-one and it becomes rough around the edges, though honestly, I'm looking forward to playing with the final release Ubuntu 8.04 which has a release date set for this coming June. However, I will not be the one to say you shouldn't try Ubuntu. The package managing system is the best I've seen on any distribution, which basically means there are more programs at your fingertips. It's also the fastest I've seen at downloading/installing the packages. Personally, though, I would recommend trying Mint if you want to go the Ubuntu route. Basically, the people at Mint take Ubuntu and polish it up. It becomes more pleasing on the eyes and more functional.

I like to experiment with various distributions, but I always find myself coming back to PCLinuxOS. It is the only "easy-to-use" OS that has worked "out of the box" on every system on which I've installed it. The Control Center is well-organized and it is very easy to configure the system. It's the only distribution where I've never had to touch the command line except to run antivirus (which I believe support for which is lacking, but that's a topic for another day). Even in Ubuntu, I've had to use the command line occasionally. My recommendation for anyone who has never played with Linux before: download and install PCLinuxOS. After you get comfortable with the system, feel free to try other distributions.

One thing I'd like to point out is not to install over your current Windows installation. Linux zealots all over the country will yell at me for this, but I believe that by switching cold turkey, the user runs the risk of being scared off quickly. You should ease in gradually, treating it as a toy first, but you'll notice over time that you'll start to realize the many problems Windows possesses. You've simply been unaware because Windows is all you've known.

Use one of the following options: dual-boot, virtualized desktop, run Wubi, or brush the dust off of an old unused computer. Since this guide is directed at those who know little about Linux, it's unlikely you'll know what any of the first three options are, but a quick search online will provide details. To install Linux, go to the community website for the distribution you'd like to try, download the recent image file (file type: *.iso), and burn to cd/dvd as an image (not as data).

There is so much to say about Linux and its benefits, and there is no way to cover everything in one sitting, even for just an introduction. It's very difficult to make assumptions on what you may have to ask about Linux, so I'd like to see some feedback. Post your questions in the forums and I'll try to address them if I can. I'd also like those who are experienced with Linux to weigh in and make their own recommendations.

And if you find you like Linux or a particular open-source program, feel free to thank the programmers. They'd appreciate it.
 

Author:      Justin Washick
Date:      2008.03.28
Topic:      Software
Provider:      TechwareLabs
Manufacturer:      Linux