What is CRM?

CRM is a term whose use is constantly evolving. It is worth pointing this out as, if you thought you know what CRM meant, you might now be wrong. Originally, CRM was seen as the convergence of two types of application.

Sales Force Automation software – aimed at supporting sales forces in their daily tasks, in particular contact management and keeping a trace of interactions with prospects and customers.
Customer Service and Help Desk software – okay, that’s three, but these latter types are very similar – they involve logging customer details, and manage service requests or support questions from their inception through to their resolution

At its most simplistic, then, CRM is software that supports the interactions between a customer (in the broadest sense) and a provider, from the initial presentation of a product or service, through to the termination of the agreement between the customer and provider. However, CRM does not stop there. The act of supporting these processes generates significant amounts of information about customers, their needs and behaviour. Likes and dislikes can be logged, previous foul-ups referenced and pot-holes to be avoided (such as “don’t go to the house after 3.30 – the kids are a nightmare”) can be clearly documented. Information can be gathered from web sites, historical databases and news feeds, and input into what has become termed "the single view of the customer". CRM, then, has become the resource that enables effective analysis of customer needs and hence of what, and how, to sell.

CRMGuru.com lists its top-ten of CRM definitions here - read them and make up your own mind! A short and sweet description of the current state of CRM may be found here. A Patricia Seybold Group paper defining CRM can be found here.

One of the downsides of CRM is not the concept itself, but the fact that this it presents such a broad spectrum of potential applications that every software vendor that includes the word “customer” or “service” in its literature is deemed qualified to be a CRM vendor. And that’s most of them - a CRM solution can (apparently) be a help desk package, a call centre or a data warehouse.

By the way, another (equally broad) way of looking at CRM applications is that they automate the “front office”, i.e. the customer-facing elements of an organisation. The “back-office” consists of Enterprise Resource Planning applications and the supplier-facing elements are covered by Supply Chain Management applications.

The Business Need for CRM

The provision of software to support the entire, end-to-end series of interactions with a customer, offers the obvious benefit of efficiency. Details need only be logged once, all interactions are logged and all parties that may be involved with that particular customer can have a complete, detailed picture of the status of the customer relationship.

CRM enables:

Sales and service processes to be streamlined and managed from a single point, enabling cost efficiencies for the business (and, hopefully, service improvements for the customer).
Customer relationships can be more profound than previously.
As a marketing tool, CRM enables cross-selling ("if you have product A and B, you might also be interested in product C") and up-selling ("have you considered the package? Not only would you get products A, B and C, but also...").

A description of the business challenges to be met by CRM is provided here.

Deploying CRM Applications

A CRM implementation is an “enterprise application”, which translates as complex and unwieldy. It should be considered like any other large-scale software roll-out. Special characteristics include the fact that it is dependent on, and a driver towards, having business processes that covers the sales and support processes from end to end.

In CRM, it seems, everything needs to be numbered. The CRM Forum article here lists ten critical success factors for deploying CRM applications. Another article from the CRM Forum provides an eight-step plan for successful CRM. If you are interested in strengthening your company's CRM strategy, here's the top ten CRM tips from Ecommerce Guide.

Issues with CRM

As with all applications, there is a danger of buying CRM without fully understanding either what it is for or what your own requirements are. The article here raises this central issue. When you are talking with vendors, ensure you have an understanding of CRM as some vendors may have less of a picture about CRM than you do! An article covering this is here.

One issue with CRM systems is that they are about customers, not for them. The Patricia Seybold Group proposes designing systems from the outside in, as described here.

Finally, as mentioned, CRM is a large-scale package deployment and hence will involve substantial business change. Also, integration with legacy systems, to give a clear picture of the customer, is easier to say than to do. Watch your step.

The Future of CRM

It looks likely that CRM will evolve, rather than change dramatically. It will become more customer-focused and better integrated with other systems and channels of communication, according to the article here which combines the views of four experts on CRM. The thing most likely to change with CRM is how the term is used. One way is to swap the term "customer" with "partner", "supplier" or "enterprise", as described here. Good article, nice beard.

Mobile CRM (m-CRM) is another obvious next step, to meet the needs of sales people and service engineers on the road. There is little that changes in the principles of CRM, however the practices may well change. We discuss the Mobile Internet here. Similarly, CRM solutions may be delivered as ASP applications, as we describe here.

Further Resources on CRM

As you can tell from the number of articles we reference, the CRM Forum provides an unusually (for a forum) fine, comprehensive resource library for companies starting out in CRM.

CRMGuru.com is another highly useful resource, although you may need to register to access some of the materials.