Magazine article Business Credit

Customer Relationship Management Can Work for You, but Is It?

Magazine article Business Credit

Customer Relationship Management Can Work for You, but Is It?

Article excerpt

In 2003, some studies reported that only 30 percent of Customer Relationship Management (CRM) implementations were successful. That is an extremely low satisfaction rate and points to the fact that installing a CRM system does not necessarily result in success. Ensuring a good match between the company's needs and the software's capabilities is critical for success. Determining that match requires careful preparation.

Some businesses have realized a good ROT on their CRM system in a reasonable amount of time. Some companies have even experienced better customer retention. To achieve these benefits, however, you need to choose the correct CRM system for your company's needs and constantly re-evaluate the system to make sure it's providing your company with the maximum benefit. It's not as simple as doing a few minutes of research, placing an order, and never thinking about it again. To get the optimal benefits, you need to evaluate a set of criteria to determine your best option and then make modifications needed over time. The following will help you choose the best CRM system for your company's needs.

Choose Your Vendor Carefully

Most software companies entered the CRM market with a handful of basic products. However, end-user companies found these products didn't always meet their unique needs--resulting in a low success rate and discouraging company leaders. Variations of CRM software, designed to meet a broader range of needs, were created and had varying degrees of success.

CRM software is only successful when it meets a company's goals in managing relationships with its customers. But not all software manages customer relationships or provides managers with the same data. Some software specializes in data-mining, so that a company can identify characteristics of different customer segments or specializes in collecting and analyzing information from customers who visit websites. Other software is linked with Enterprise Management software so customer data from accounting, shipping, invoice processing, marketing research, and consumer service can be combined to get a 360-degree view of your customers. Yet more software specializes in matching incoming calls with designated customer service reps, or automatically generating responses to customers. Some software provides a combination of these services. As you can see, the choices are plentiful.

Choosing the right CRM vendor for your company will make all the difference between a successful implementation and an unsuccessful one. Just as not all CRM software is the same, neither are the vendors. As you choose a vendor, consider these questions:

* Does the vendor who is selling CRM software ask you about your company's goals or the kind of Customer Relationship Management you are attempting to create?

* Does the vendor explain the advantages and disadvantages of different analytical processes in terms of the kind of data generated and what it tells you about your customers?

* Does the vendor explain the use of the data in terms of business processes?

If the vendor can't explain how the data generated by their company's software enables you to manage the kind of relationship you want with your customers, then talk to another vendor.

Focus On Your Customers And Your Goats Now that you know which vendor is best for you, you need to determine which product the vendor offers will meet your needs. Remember, most vendors offer several solutions. An effective CRM system identifies customer demand and maintains customer loyalty. Using CRM software is not a matter of describing a target market by identifying customer characteristics. It is not a matter of using software to computerize current business processes. It is not a process of matching customers with products. Rather, CRM software needs to accomplish the following:

* It needs to gather, process, and analyze all customer information to create insight as to how and why they make purchases. …

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