Do you need a CRM?

Customer Relationship Management (CRM) is a process that companies use to understand their customers and respond to them quickly. CRM allows the companies to collect and manage small or large amounts of customer data which helps in solving particular problems throughout customer relationship cycle. It provides new insights into customers’ needs and behaviors which can then be used to tailor products or services to targeted customer segments.

Every business has two aspects to it. Sell and Account. CRM is a key system to have in place to manage the sales while your Financial system will help you manage your payable, receivables and general ledger. In this post, I am trying to do a quick review if a company needs CRM in the first place.

There are one too many vendors that has a CRM Tool offering - both hosted and cloud models. CRM should be chosen, implemented and used if there are atleast numerous sales reps managing and dozen or more paying clients with a task of say, targeting 50+ prospects. Else one could use a spreadsheet or use tools such asStreak right inside your mail box (especially Gmail) or free CRM software fromHubspot.

For companies with an order book worth millions to manage, territories or new markets to be penetrated or greenfield product categories to be sold, a full blown CRM software is the way to go., Oracle CRM, Microsoft CRM Dynamics all nudging to grab a piece of this pie. It can cost a sizable chunk of your budget and a tough decision to make on whether you need a CRM or not?

Before investing in a CRM solution, one should analyze the current systems and processes, and how well they cater to the business needs. There are numerous questions especially for organizations with low maturity in CRM process which can help decide if a CRM system is needed –

  1. Is the contact information readily available stored in a central repository to all its employees?

  2. Are the customer details and prospective clients available in case a sales rep walks out of the revolving door tomorrow?

  3. Is there an ability to measure the deals metrics- win, loss and the reason behind the Close?

  4. Is the sales team staying on top of follow up communication with potential customers?

  5. Does the firm know which marketing campaign will be most effective and efficient at generating high-quality leads?

If the answer to all these basic questions is an astounding Yes, then the firm may not need a CRM system. However, if it is not so, a substantial case can be made for CRM. Let us now look at some of the reasons for a CRM solution –

  1. Get organized – CRM integrates emails, tasks, calendars and so much more in one easily maintained centralized location that gives anytime, anywhere access from any device. It will help in tracking every task and event so that no customer gets neglected.

  2. Performance metrics – CRM provides metrics on dozens of aspects of business like how many clients the firm signed up in the last year, what is the conversion ratio of leads to customer conversions to cite a couple of examples. These are helpful in shaping out future strategies for the business.

  3. Leads Overload – If the firm has hundreds of prospective customers who cannot be remembered by sales rep, a CRM solution may be needed. This also helps in customer retention as everyone gets treated nicely.

  4. Sales forecasting – CRM helps in generating more reliable sales forecasts by using real-time tracking and machine learning algorithms.

  5. Growing business – CRM helps in generating leads from emails, marketing campaigns, website visits. It emboldens the sales rep team by giving them suggestions on cross-selling and up-selling activities and enables them to see the financial impact of different product configurations before they set prices.

  6. Market research – It helps in the gathering of real-time market research on customers so that firms can gauge the success of their promotional campaigns/products and redirect spending accordingly and feed data on customer problems to their product. Most of the CRM has a feed from a tool called InsideView.

CRM has expanded into the landscape of Social CRM where customers are tracking the social behavior of their end users while vendors are incorporating next generation features of predictability.

In conclusion, companies need a system that allows them to target clients in a short amount of time, which may not be possible using a spreadsheet (unless you have a small sales team and clients to manage). A spreadsheet is useful for managing information, but not for building relationships.

The simple act of paying positive attention to people has a great deal to do with productivity. ~ Tom Peters

The intention of CRM is to offer Excellent Customer Service or Experience. Excellence in Experience will help in building relationships, lead to better sales performance and productivity, additional up and cross sell opportunities to go after and reduced customer churn.

Happy selling!

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