Managing the customer relationship

Learn how customer relationship management systems help you harness all customer communication for company-wide use.

Customers are the cornerstone of your business. Customer relationship management (CRM) systems help you harness all customer communication, integrating it into one cohesive system to be used company-wide. But with implementation failure rates of 50 to 70 percent, a CRM investment needs to be made carefully.

CRM can take many forms, from managing sales leads to controlling email marketing campaigns to tracking customer service communication. But if you decide to invest in CRM software, it is important to view the purchase with an open mind. If you see CRM as simply a software purchase, you are setting the stage for failure. A CRM system cannot work unless the data it harnesses is used strategically to further the company's goals. This means that true buy-in is required throughout the company, from the receptionist to the CEO.

Before shopping, think about your goals. Is retaining existing customers important? Reducing time in the sales cycle? Or is it more valuable to expand into an online market? The data you collect, analyze, and report on should directly support your objectives. CRM systems typically offer so many tracking options that it is easy to get caught up in data overload, collecting every possible piece of information about each and every customer, potential customer, and transaction. But it is far wiser to save time, effort, and money by deciding upfront what information is most worthwhile to collect, how you will measure that information, and what you will do with it when you get it. Then you will be ready to approach a vendor.

CRM software is available either as a complete purchase from a software vendor or outsourced from an application service provider, or ASP. ASPs host the CRM applications and sell subscription-based services. ASPs are more affordable than standalone software and require little maintenance on your part. However, ASPs are often static in what they offer and will not provide the level of customization offered by purchased software.

Because CRM growth has been slow, right now it is a buyer's market. ASP-based CRM can be had for as low as $50 per month per user, with no initial investment required. A complete software package usually costs at least $500 per user. As package prices increase, typically so does available customization and back-office integration.

If your budget is tight, do not be afraid to be flexible in your expectations. While customization helps, it racks the bills up and may merely be the result of holding onto what you are used to instead of doing what is truly most efficient. Also, CRM software is often sold in modules, so checking on modular availability can help trim costs. By the same token, be sure you really need any extra modules before letting an ambitious salesperson talk you into buying one.

Whatever you do, get a trial copy to be used by several key department members so you can get a good feel for the software. With thoughtful planning and dedication to the end result, you can make CRM software work for your business instead of simply draining your resources.

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