Is customer relationship management only for the big boys?
In its simplest sense, CRM isn't a product. "Customer relationship management" might mean something as simple as making notes on a piece of paper. But investing in a centralised CRM system can help any business to better understand and serve its customer base.
"Companies of all sizes, in sectors as diverse as retail, healthcare, media, public services and manufacturing, rely on CRM systems," Steve Garnett, EMEA chairman of industry giant Salesforce, told Alphr. “For small businesses, a CRM system maysimply help put data in the cloud, making it accessible from any device. As a business grows, CRM can be quickly scaled up to include more sophisticated features that help teams collaborate with colleagues and customers, send customised emails, gather insights from social media conversations, and get a holistic, real-time picture of business health.” Daryn Mason, a senior director at Oracle, agrees. “All companies can benefit,” he told us. “Today it's just as important to have a CRM as it is to have an ERP (enterprise resource planning) system, or back-office systems. It's an essential part of the infrastructure."
Mason notes that CRM systems can also improve a sales team's efficiency. “There's a direct correlation between 'face time' and success in closing business; CRM systems free up people to spend more time with customers. I've worked in organisations where the sales guys use Friday afternoon to update their forecasts,” he recalled. “A CRM service could build that forecast for them, and roll it up to their manager automatically.”
Calculating the costs
Free CRM software does exist, but in most cases it makes sense to pay for a service that's tailored to your needs.
“There are products out there that you can just take off the shelf, download and use,” said Anderson, “and they have their place. But I think it's been proved time and time again that you still need some expertise and planning around these sorts of implementations. We build on open-source projects – such as MySQL, Apache and PHP – to keep the licensing costs down, and we wrap that up in our own code, so that when customers need a particular function, we have a development team that works on it. That way, our clients get what they need, rather than choosing a product they have to shoehorn into their business.
”In terms of architecture, modern CRM is normally a web- or app-based service, so minimal infrastructure investment is needed. “There are certain situations where 'installit yourself' still works,” noted Anderson, “but more and more we're finding that even mid-range customers don't have the dedicated resources to run internal CRM systems. When you look at the costs of maintaining your own hardware, the hosted approach almost becomes a no-brainer.”
“Another advantage of a cloud-based approach is that it's very scalable,” said Mason. “With on-premises computing, you may start small, but then grow to a point where you need a more powerful box, or a faster network. With cloud CRM, you don't hit those sudden cost points. If you start with ten users and you grow to 100 users, it's linear: you never have that 'ouch' moment where you have to do a big upgrade.
”Remember, however, that implementing CRM brings costs beyond the licensing fee. “Normally when people take on CRM theywant to see big changes, and big transformations,” Mason continued. “So there's a change-management process involved. It isn't only about technology; you're probably going to need to re-engineer some processes, and take people through change management and training.”
The industry experts agree that a simplistic approach can be the undoing of a CRM implementation plan. “You have to think about the project as a mix between technology management and people management,” said Anderson. “Managers are often far too optimistic in their expectations about how users will accept change. It's something we strive to say, particularly in larger projects: if you don't include this amount of time in your plan for your personnel to prepare and adapt, then frankly you're on the cusp of 'sales prevention'.”
“People like to think of technology as a magic pill,” agreed Mason. “They think that if they get great technology, that's enough to transform their sales success, but it's never as simple as that. You absolutely have to understandthe problem you're trying to solve, but it has to be seen in the context of people and processes. I see CRM as a stool with three legs – people, processes and technology – and your customer is sitting on top. If any one of those legs is wobbly, your customers are at risk.”
Perhaps the fatal pitfall is underestimating the scale of the cultural shift involved in buying into a CRM platform, and the level of management buy-in that's needed accordingly.
“If CRM implementation is relegated to a departmental project or initiative, it often isn't given the prominence it needs,” Mason warned. “It needs to be seen as a strategic initiative for the whole business, and supported with sponsorship at board level. Otherwise, if you're trying to change business practices, and revitalise your customer relationships, the decisions youneed to make can get stuck at the departmental level – they're seen as too hard, and are met with inertia and resistance. High-level sponsorship helps to drive through the changes and implement great CRM.”