The term CRM stands for “Customer Relationship Management” and even though this term was coined in the 80’s, it became a widely used expression in the 90’s. CRM is much more than just software and technology (a common misconception). So what is CRM?
“CRM is the holistic approach companies use to generate,
nurture, manage and retain their customers”
This holistic CRM approach consists of many components, most of which fall into the following three categories: people, process and technology.
From a technology perspective many people think that CRM is a piece of software that they can install, switch on and their customer related challenges will vanish or their business will magically double in sales overnight. Unfortunately as much as we would love for this to be true, it is simply not the case. CRM is a business function and primarily needs to be viewed through a business (people and process) lens. The technology you select is simply the enabler, tool or vehicle used to manage the people and process related business functions.
The evolution of CRM (From a process and people perspective)
CRM processes have rapidly changed to keep up with our demanding customer needs. Our customers now expect faster turnaround times and have much more variety when it comes to products and services. The days where companies rely on organic growth are long gone and our internal teams are now expected to perform at an optimum rate. I hear the term “we need to do more with less” from almost every client and “I need to see a 360 degree view of my customers” from every CRM user.
With stiff competition in every industry, higher internal performance goals and high external customer expectations, it is almost impossible to effectively run an organization without a CRM strategy and platform. We are evolving our CRM processes to keep up with the above demand by reducing CRM lifecycle length and automating as many processes as possible. In some cases we are enabling the customer to become completely self-sufficient, by giving them access to their profiles in our systems. In other cases we are outsourcing our customer management activities to niche partners outside of organization.
With so many moving parts within a typical organization, it is challenging to keep track of everything. As a result CRM processes are now being designed as the source for real-time organizational analytics. From which a whole organizations performance can be viewing on a single dashboard.
The evolution of CRM (From a technology enablement perspective)
CRM projects in the 80’s and 90’s could take years to complete and cost millions of dollars. With the evolution of the internet, flexible software and the introduction of cloud (SAAS) software providers; CRM implementations today typically take from 3 – 6 months and cost a fraction of what they previously cost.
CRM is becoming more modular where functional components can be bolted onto the existing technology platform to provide greater capabilities and value. CRM is also becoming easier to implement and integrate into back office systems. With the advance of cloud computing (SAAS) CRM is now being offered as a service you pay for on a monthly subscription. CRM is also expanding into the social media space with integrated sentiment tracking within twitter (see how many people like your company’s products / services) and integrated sales and prospect management where as soon as you add a company name to your client list in CRM, the system will go out to external sources (i.e. LinkedIn) and populate key information into the targets profile. We are also seeing more and more integrated marketing solutions where users can quickly purchase a marketing list (from sources like Hoovers) and execute a campaign within a matter of hours.
CRM access methods are rapidly evolving, mobile access is a key feature for today’s workforce as users need to be able to access their core data via their smart phones or tablet devices while they are on the go.
Where the CRM lines start to get blurry
CRM technology is becoming more extensible and the Relationship Management (RM) components are being leveraged for non-customer related functions. These non-customer related technology solutions are now being referred to as XRM, where the X stands for Anything Relationship Management. Many of our clients have started to use XRM to manage the following business functions:
- Internal HR resource management
- Marketing communications
- Property and rental management
- Hardware asset management
- Expense management
- Insurance policy management
- Customer service requests
- Staffing requests and assignments
- Grant submissions and tracking
There seems to be more and more confusion when it comes to CRM and XRM, we hope the following example helps illustrate the differences.
Microsoft Dynamics CRM is a leading CRM technology; once implemented users can leverage the native CRM modules e.g from a sales perspective this may include customer management, sales tracking, order entry etc. As this solution evolves within the company the management team may decide to expand this solution by adding XRM functionality e.g expanding the sales module to include expense management or building an HR resource management module. Note when this is undertaken the underlying technology does not change, the solution is simply expanded to cater for the new features and functionality.
Now taking this example one step further some vendors are now selling CRM / XRM solutions that are completely non-customer focused. The technology maybe on a CRM platform but the solution being implemented is customized for a specific job function for example; XRM can be used specifically for hardware asset management, where internal devices such as phones and laptops are related and tracked to internal staff members.
CRM is a holistic approach and strategy towards your customers. This approach will have many components centered around the people, process and technology foundations.
As your specific industry evolves and your customers needs become more sophisticated, your CRM business processes should follow suit. This demand from the people and process side has been met by new CRM technology’s which have become more flexible, expandable and cost effective.
CRM processes and technology need a great deal of commitment from the people involved. However if implemented correctly (and given time to take effect) the benefits will be significant.
Written by CRM Success.ca
CRM Implementation Specialists