Six Key Benefits of CRM
The use of CRM systems has grown over 25 years from experimental beginnings to the point today where CRM is the biggest business application of all time. The reason that it has become so important is fairly obvious – without effective control and understanding of the customer relationship the overall health of any business will suffer. Getting the best from CRM systems is challenging however; unlike business areas such as finance and logistics there are few formal structures and rules in sales, marketing and customer service. Success in CRM requires more business skill and artistry that looks for the opportunities and leverage that can bring great Competitive Advantage if they can be identified and driven forward. This is not easy but for the ambitious the difficulties have many rewards.
These are the Six ‘areas of Benefit’ where CRM can make a significant – perhaps decisive difference.
1. Understanding what CRM should and could do for the Organisation.
We have put this first because planning and implementing a CRM project is a critical benefit in its own right. Most business people will have some experience of CRM now and will know that technology does not necessarily deliver benefit simply by being installed and deployed. It enables the execution of thinking and cultures – so a profound belief in what is to be achieved is absolutely necessary. This requires collegiate thinking within the company leadership but this process should not just be inwardly focussed. We live in a world where technology and customer expectations and experiences evolve fast. Observation and understanding of what competitors are doing or not doing is fundamental – as is learning lessons from best practice and innovation in other, perhaps very different, business areas.
2. Understanding the Customer
This works both ways but it’s central to success and maximizing benefit. Any CRM project should never let go of the simple truth that the ‘C’ in CRM stands for customer. The main historic reason for CRM disappointments is the scant regard paid to the customer experience. Really informed insight into the external customers expectations and hopes pays dividends and so does the detailed establishment of the information/data needed to optimise both profitability and satisfaction for any single customer.
3. Get ‘Onboarding’ of new customers right and it will have a big pay-off.
New Customer Onboarding is seldom done well (except in financial services where it is often legally mandatory). Business academics think that the first 90 Days of a new relationship are critical and in that period customers have maximum propensity to provide data and also to buy further goods or services. Knowing what data you want at the outset of the customer relationship may be very important. CRM systems are very good at storing and actioning future customer life-cycle events and opportunities to make the best use of this time-frame by informing both sales and marketing strategies in the future.
4. Communications are consistent, informed and effective
It is an obvious truism that nothing is more destructive for business and consumer relationships than inconsistent and ill-informed contact. No customer likes to find that the company he or she is talking to does not know transactional or information histories or cannot co-ordinate across departments or channels. CRMs systems are great vehicles for avoiding this and consequently minimizing customer attrition. The other side of the coin is that, internally, CRM can profoundly improve systemic failures and ensure that work is ‘once and done’.
5. Reporting, Analytics and Decision Making.
What you don’t know you can’t act on. Exactly what you want and what you need goes back to the principles established in the planning and strategy phase. What is certain is that only a well maintained and information rich CRM platform will provide the sort of management information that is a pre-requisite of success and survival in today’s world.
6. Maintaining Brand Values and Maximizing Customer Retention and profitablity.
No business benefits are bigger than these but executing brand values can be very challenging and in the contemporary world the task is much harder without class leading CRM strategies. Decades of research demonstrates that customer retention is closely linked to profitability but we all know as consumers how disappointing the buying or service experience can be. Addressing areas 1-5 above will under-pin both the security of brand value and profitability.
About the Author
Nick Hewson is a market analyst and author of a number of business books and research projects. He studied Law at the University of North London and subsequently lectured at Business Schools on customer management issues. As the head of a consulting company, he managed projects that led to dramatic improvements in customer management with award winning outcomes for clients.
Our research into what causes CRM failures helps our customers avoid failure and become successful now and in the future with CRM.
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