Most businesses know what their customers need but fall down because their customer service, marketing and sales efforts are not properly structured. A CRM system provides the required structure and organisation, but the company needs to ensure it purchases the right CRM software and has the right implementation partner, often not as easy as it sounds.
According to Errol Wills, managing director of business and financial software reseller and solutions provider Lorge, there are five basic steps that will help companies to arrive at the correct buying decision.
The first step is to assess the company`s needs and expectations by determining the overall CRM strategy of the business.
"Companies need to be clear about the goals of the organisation because the term `CRM` can be vague and interpreted as any methodology, software or Internet capability that helps manage customer relationships in an organised way," says Wills.
"The term is often used to cover every interaction a business has with its customers, especially all processes and procedures with the goal of customer service or sales.
"But the bottom line in all CRM systems is improved profitability, even though businesses can choose to reach that goal in many different ways. Some recommend working backwards from a set goal. The important criteria within the CRM goal are better penetration of the existing customer base and better targeting of and marketing to prospects. If these are achieved, profitability will improve."
The second step is to decide which options are critical, which are important and which are nice-to-haves, but not essential.
Wills adds that many experts and software providers agree that the best form of CRM software is enterprise-wide, interfacing with all of the other systems within the business and ensuring the information flows through the entire organisation and delivers the best value.
The third step for the business is to match its needs with a software product. This requires due diligence of appropriate vendors and their services. Some vendors can match their technology with the software needs of many institutions. Other providers specialise in certain areas which may or may not match the particular business focus.
Evaluation of the proposals of the software vendors is the fourth step. In essence this amounts to proof of concept and is an important procedure where a mistake can have very serious consequences.
"Companies should avoid buying a CRM system based on how pretty the screen is," says Wills. "They must consider what is actually behind the screen and bear in mind that two decisions are actually being made - firstly the selection of the product and secondly the selection of a business partner that is going to assist in the system implementation, which is critical."
Areas for questions include ease of installation, how much training is required, pricing accuracy (are there hidden costs?), the capability of the system to integrate into a consolidated view of the customer relationship and whether it integrates with the back office accounting system.
"These are not inexpensive systems. Costs depend on how much software the business wants to deploy, what pieces they select, and how much help is required in terms of system implementation."
The fifth step is to ensure the CRM system is properly implemented and then utilised. In Grant Thornton`s 2005 survey of community business executives, 64% said updating or expanding technology to better track customer needs was important to the success of their business. Significantly, only 33% were confident about their performance in that area.
Wills says a major reason why projected CRM returns are not being fully realised is because, according to a study by IBM, 75% of companies are not using the system to its potential once it is implemented.
The IBM survey, which polled more than 370 companies across all industries worldwide, established that only 15% of CRM installations are done correctly first time, the major causes being identified as human-oriented steps such as change management and process change.
"This tells us that it is critical to work with someone who has the skills, expertise and capability to set up the entire CRM system and ensure it does what it is designed to do, adding value to the business as planned," Wills says.
"Access to the system is extremely important, yet often overlooked. Some businesses make the investment in a CRM system yet give just a handful of employees access to it. There`s no sense it that - it has to be available to all of the people that have direct customer contact, or what`s the point?"
Choosing and implementing CRM software is not the last step in customer service. Rather it is just the beginning. Wills stresses that businesses still need to keep constant communication open between their employees and their customers.
"CRM is a process with a workflow that requires serious training and then serious commitment from management and staff to ensure it delivers to expectation."
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