Software runs my life

Tag: CRM

What is Social CRM?

Social CRM is a buzz word that is spiralling out of control at the moment. What does it mean? I googled around and didn’t really find a consistent message. Instead I am going to explain my interpretation, let me know if you think it makes sense.

Social networks have two strong points, they are full of customers that are linked by relationships. These are the first two letters of CRM! The multi-billion dollar question is how can you manage them without destroying them or being seen as an evil spy.

Social CRM Feedback Loop

Social CRM Feedback Loop

The first step towards Social CRM is using social networks as a feedback loop for your customer relations programs. Who better to learn from than your customers themselves? It’s the perfect way to refine your customer relations processes and add another source of feedback and innovation into your company.

The next stage is to develop relationships with your customers. From a business perspective I would assume that this is due to repeat business delivering higher margins, mostly because it doesn’t require expensive mass marketing or other customer acquisition. Businesses justify it to consumers by saying it gives the customer an opportunity to dictate and receive a personalised product.

I like idealistic goals, I think when you are talking about customers it is good to at least aim towards being noble. The question is, how many businesses intentions are simply to maintain the margins of their mass market product?

As with everything in life there will be a balancing point, somewhere in the feedback gathering process I think the social networks will reject further interference. That balancing point is what Facebook and others are thinking day and night about, and the point they have crossed at times with projects such as Facebook Beacon. If a social network hits that point perfectly there is definitely big money at stake, but until then companies need to monitor the social networks in their backyard and just listen. There are plenty of companies that struggle to do that internally, let alone through fast moving external networks.

CRM solutions for a recession

InsideCRM posted a good article on the top 5 reasons why a CRM system increases in importance during a recession (the US is in one, it is only a matter of time before Australia and others admit they are in one too).

Stressed about sales?

Stressed about sales?

For me, the key is working smarter not harder. When unemployment starts creeping up people start getting stressed about their jobs and start burning the midnight oil. Here is how a CRM helps you achieve more without burning yourself out:

  1. You can slice and dice your customer data to target the customer segments that aren’t suffering so much or have fallen through the cracks in the past.
  2. Customer retention is easier as you can track and schedule catch up emails, meetings or calls.
  3. Customer wide cross-sell strategies can be more easily implemented and coordinated.

Many companies have implemented a CRM system because it is easy to demonstrate reduced data entry, documenting customer complaints or managing product inventory. During a recession, companies should be looking at the analytical and other tools that have gathered dust within your CRM during the good years.

So what are some facts that can motivate you? Improving customer retention by 5% can boost profitability by 25% to 95%. Sales force automation and a consistent sales process has been shown to increase sales per representative by 30% over a three year period. Still not enough reasons?

Well what are the top 3 reasons why now is a great time to go through a CRM implementation?

  1. CRM retailers are hurting like everyone else, prices are better than ever.
  2. Excess capacity within the business can be used to scope, build and train on a new system.
  3. Business model change is slowing as new entrants fail to gain VC or other funding. This gives you some breathing space to document your current business model and tighten the screws.

Integrating your CRM and Website

Closed for BusinessAs far as I am concerned, having a website without having a CRM/sales system behind it is like having a shopfront with no shop. People can view your products, but they can’t offload their hard earned cash. Why do that to yourself?

Unfortunately it seems that companies need to literally see people banging on the store door (via hits, emails, phone calls etc.) before they will open the store. How many customers have you missed in that time? You’re paying for the store location, so why not fit it out inside?

Salesforce announced at Dreamforce that they are taking this view to another level. Your website should be linked into the core of your company. Every process your company runs should be accessible (and deliver value) to the customer at all times. Zdnet give it good coverage, but I think Smoothspan explains it best. The basic premise is know your customers, and then deliver the best experience you can to them. CRM’s have always tried to get close, but it requires a company to be completely online and committed.

Top 5 CRM Selection Criteria

I have now been working with CRM systems for 5 years. It is only recently that I have seen the industry  (finally) mature to a stage where it is no longer engaged in a straight up feature war. This has been driven by two things; a maturity of product offerings and a recognition by customers that they should be making decisions based on an analysis of their own requirements, rather than a feature comparison matrix. To this end, here are my top 5 criteria for selecting a CRM system:

Usability – Without this, nothing else matters. If your users will not adopt and use your selection, it’s a waste of time and effort.

Alignment – What do you want to do with your CRM system? If you are looking to manage contacts & contact activity, you’d consider a completely different slate of products than you would if you were looking to customize a product to support your entire business process.

Product delivery – SaaS vs. client/server is a big consideration. Do you need an offline client, or is a plugin enough? If so, how robust does it need to be? This could direct you toward a client/server solution. Do you have an IT department and any in-house expertise? If not, could direct you toward a SaaS product.

Integration needs – While it is easier than ever to integrate SaaS products with other systems, some scenarios definitely call for an on-premise solution. This could be a limitation of your current software packages that you rely on but have no interface into.

Pricing – Do you have capital up-front? Do you want to buy your solution? If not, SaaS products are much easier to get started with. In some cases though, they can end up costing more in the long run. There is also a great price difference in different SaaS products and even within themselves based on functionality.

Multi-tasking and Productivity

Today I read a very interesting article that was powerful enough to knock me out of my blogging slumber. It is essentially a summary of a paper that was recently published at the International Conference on Information Systems. It can be found at the following URL (and was slashdotted here):

man with two phones

So why was this article particularly interesting to myself? Well for starters it was based on a study of executive recruiters, who are my current employers. It was also particularly interesting as the theories presented back up the beliefs at the foundation of my new CRM system (my thesis). The article provides empirical evidence that multi-taskers are more productive due to their increased ability to handle parallel tasks. This is one of the key features of the CRM package, however it is also the thing that is taking the longest time to train staff to use.

I am even noticing a difference between Generation X and Y staff in this area. As this related article states; Generation X may have introduced multitasking to the work place, but Generation Y has perfected it. I am certainly finding that to be the case. This is also extremely important for the retention of staff. As multi-tasking becomes more embraced by the Generations, they begin to expect it to be supported and become frustrated quickly if it is not available. Some of my other favourite articles on Gen Y employees reinforce this message. Empower your staff with flexible, multi-tasking IT tools and they will be highly productive and highly profitable.

The Rise of CRM

Long’s post about talking to customers sparked my interest due to my current thesis work surrounding CRM packages. It raises a very interesting question, and that is do these companies genuinely not care or are they not capable of caring?

Company communication facesA company can only ‘appear’ to be capable of caring if it has invested in systems that ensure each customer interaction is responded to in the best possible way (for both the customer and the company). This requires a lot of business strategy planning and scripting, often using inputs such as customer surveys, psychologists, marketing managers and front line staff. Getting to know your customer clearly takes a lot of time and effort.

All this planning work is in vain however without a successful implementation. Big companies for many years have invested heavily (millions of $) in packages from SAP and Oracle.

It is only now that small and medium enterprises (SME’s) are investing in this area. This shift has mainly occurred due to 2 things, an increase in customer service quality expectations and a decrease in the implementation cost of CRM software.

To give you an idea of what CRM software is capable of I would suggest watching this demo video. It is tucked away on the Microsoft Dynamics website, but it gives an excellent overview of how a CRM system works.

Microsoft and a number of other providers are making a large scale push into the smaller end of the market. By smaller I definitely mean employee numbers, not value. In Australia the SME market actually represents 92% of businesses and 80% of total business value. As far as developing areas of IT go this is a huge one, and it brings with it a whole load of business analyst, software customisation/integration and many other job opportunities
with it.

The exciting part for me however is not that I will have a career path, but that IT is being recognised as a business driver and competitive advantage rather than a necessarily evil to support a business. The TLA‘s of CRM, SFAERP and logistics areas are leading the way in this area. One day will the CIO always
have a seat at the board table? Will IT staff be recognised and valued as revenue generators and as holders of crucial business knowledge? Sooner or later, time will tell.

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