Customer Relationship Management, or as it is more commonly known ‘CRM’, is one of the most widely-used yet misunderstood terms in today’s technology-enabled corporate environments. Put simply ‘CRM’ is a catch-all term that is most commonly used to describe software and related technologies that manage customer-facing business functions (most notably Sales, Customer Service and Marketing), business processes and data.

Done right, CRM allows companies to increase both their revenues and profits while lowering the cost of marketing, selling to and servicing their customers. The payoff is clear - by better aligning business processes and managing customer data across all customer-facing functions, companies can build successful, profitable and long-term customer relationships.

Unfortunately, however, CRM has also gained a bit of a mixed reputation – and one of the most-often-cited statistics regarding CRM is how often these solutions fail to meet their objectives. There’s no denying it – getting CRM ‘right’ – and making it successful – is a significant challenge. A CRM strategy is about much more than merely selecting the right technology - rather, it is a business strategy that may very well necessitate that you completely reinvent how your company does business.

Yet while CRM is not without challenges, it also cannot be avoided – because after all CRM is ultimately about your customers. Despite the challenges, the fact remains that many companies – and that includes many Small and Medium Businesses (SMBs) – have seen tremendous success with CRM. This report will explore the key success factors of CRM, and describe a set of steps that your company can utilize to make
CRM succeed – for your company, and for your customers.

The term ‘CRM’ first emerged in the mid-1990’s, created with the intent of describing how Sales, Marketing and Customer Service technologies needed to work not just within each department but also together. For instance, prior to the advent of CRM, some companies had begun to deploy Sales Force Automation (SFA) applications to automate the selling process and track prospect data, but that data often didn’t leave the sales department – thus when the customer called to complain the Customer Service department would be unaware of any interactions with Sales.

This led to many situations where, from the customer’s perspective, the company was acting in an incompetent and/or uncoordinated fashion. The result – the ‘right hand doesn’t know what the left hand is doing’ syndrome –often would result in a frustrated customer departing for the competition.

Early customer-facing applications – SFA, telemarketing, marketing campaign management, help desk and others – served their individual purposes, but were unable to provide the integration that allowed companies to serve their customers with a ‘single face’. In response, CRM ‘suites’ were developed that promised to automate not just one but (purportedly) all customer-facing departments and functions.

Unfortunately, while the idea made sense, the implementation proved much more difficult. Many early CRM initiatives became bogged down by companies trying to do everything at once. Particularly in larger companies, there are many stories of companies spending millions of dollars and years of time in attempts to replace their entire sales, marketing and customer service infrastructures – and becoming overwhelmed by the challenges (sometimes technological, but more often organizational) in doing so. The ‘360 degree view of the customer’ so oftenpromised as the result of CRM implementations became, for many, an unattainable goal as CRM initiatives became needlessly complex and prohibitively expensive.

CRM is neither a simple nor a risk-free proposition – but it is also not not an option. Markets continue to get more and more competitive, and the margin between success and failure ever more narrow. Companies that are able to better manage customer data and customer-facing processes have a clear advantage over their competitors. Those that fail to automate and integrate will see both revenues and margins decline.

So if you’re just getting started with CRM – or even if you’re just thinking about it – what can you do? The goal of this report is to provide some general ideas as to how CRM can help you improve your operations, and some specific tips on how to put these into practice in your company – and with your customers.

Getting CRM right is about striking a balance between tactically solving problems within specific areas and managing customer-facing processes and data across them. In other words, for CRM to be successful – at both strategic and technological levels – it must be integrated. Many companies will deploy a Sales Force Automation (SFA) initiative – or develop a new call center application - and believe that they are 10 STEPS TO SUCCESS ‘done’ with CRM. Nothing could be further from the truth.

As a matter of fact, CRM is never really ‘done’. It will evolve – and continue to do so – as long as customer relationships themselves evolve. In other words, CRM strategies need to be flexible enough to accommodate customers’ needs and desires in a business environment that requires constant change – and to do so in an integrated fashion so that the company is presenting a single face to the customer, regardless of what communications channel (live in-person, the phone, e-mail, the website, etc.) they are communicating through.

While assigning internal responsibility is key, CRM of course also needs to be about the customer. As I’ll discuss later in this report, the acronym ‘CRM’ is in many ways backwards. Today’s information-aware customer both desires and possesses an everincreasing amount of control over the relationship – to the point where the customer is often managing the relationship with the company – rather than the other way around.

Companies that succeed with CRM recognize this dynamic, and take advantage of it, by using ‘CRM’ to open up the resources of the organization and enable the customer to do business they way they prefer. Yet this often requires a quantum leap in thinking for business executives who are wary (if not terrified) of ‘turning over the reins’ to customers and yielding ‘control’.

Finally, CRM success cannot be discussed – or gained – without addressing financial return. There’s no denying that CRM requires an investment of both time and money – and it’s equally clear that corporate and financial executives will only approve CRM initiatives when these investments are justified by hard financial benefits.

Companies who wish to succeed with CRM must understand and implement financial and business models that provide these benefits.

The earliest adopters of CRM (at least in the broadest sense) were the largest companies – because as a relatively unproven and high-cost proposition, most Small and Medium Businesses (SMBs for short) simply couldn’t or didn’t want to make the investment, and because large organizations are often the least integrated in terms of ‘one hand not knowing what the other is doing’. Thus, the need for integration was seen to be greater – and the high costs of CRM could be more easily afforded and justified.

These days, however, SMB’s are aggressively and successfully deploying CRM – as the technology has become both proven and understood – and as the risks have dramatically decreased. As a matter of fact, in my experience I have witnessed that many of today’s most innovative and successful CRM initiatives are happening within small to midsized businesses.

Smaller companies are these days able to gain the benefits of CRM without it becoming the ‘boil the ocean’ exercise it can become in a larger firm – with vague goals (like the infamous ‘360 Degree View of the Customer’) and turf battles between squabbling political factions. SMB’s have the best opportunity to simply ‘get CRM done’ – and get it right – than has existed for quite some time. CRM – both the term and the market – have been through a rough few years. But that CRM is about to enter a golden age of productivity – as the successful companies learn from the mistakes made by others. And as the market forecast below indicates, it will be smaller – not larger – companies who will lead the way.