e-skills UK Guide

Customer relationship management

Many smaller businesses may only deal with one or two large accounts that supply most of their trade. The principals will be very attuned to the needs of these large accounts and will retain a lot of relevant information such as key contacts, sales pipelines, project status, political issues and forward looking business in their heads.

As the number of customers or people involved with each customer starts to grow, issues arise as important information is not shared or simply lost. This is mainly down to poor communication between people and the lack of systematic data capture.

Similar problems appear when a business is managing lots of leads and prospects as part of the sales process. A successful marketing program can generate hundreds of leads. Whilst this is a great problem to have it becomes a logistical headache as each lead needs to be processed and actions dealt with. Importantly the leads need to be triaged so that important opportunities receive the right level of attention to close possible business.

Clearly a systematic way of managing relationships with new and existing customers needs to be found, and that is where Customer Relationship Management or CRM comes into play.

At the heart of any CRM system there is a customer contact database and a tool that enables you to capture and process your customer sales leads. This management of sales leads is also referred to as sales force automation.

By implementing a CRM system you will make money by improving your sales process and save time as you will be able to focus your efforts more precisely.

Introducing customer relationship management (CRM) systems

CRM systems have been around for a number of years. They can range from a simple spreadsheet through to very complex systems that link all stages of the sales, manufacturing and delivery processes.

For smaller businesses often the first time they realise they need a CRM system is when something goes wrong. Either they lose an account or fail to deliver on a project due to internal communication problems.

At this stage many will look at a fairly simple spreadsheet approach to the problem. In fact the humble spreadsheet really is the business person’s best friend as it is so versatile. By creating a spreadsheet with customer contact details, account status and an area for note taking you will be able to capture most if not all of the relevant data for your clients. This spreadsheet can be shared on your network so that everyone that needs to can update and check relevant information.

We talk more about creating spreadsheets and sharing files in these guides:

Online Sharing of Documents

Using a Spreadsheet

The next step up from an internal spreadsheet could be the use of a hosted or shared CRM application. This is an application that runs on the internet and can be accessed, securely by your team from anywhere they have internet access. It works in much the same way as a spreadsheet and has similar functionality, look and feel. Some vendors have released fairly advanced CRM systems hosted on the internet that provide tools to manage the sales process and categorise actions against customers.

Medium sized businesses will often install a CRM system on their own internal network, under their full control. This will require a bigger infrastructure of support staff and technologies, especially as more advanced systems can link into external email and contact databases.

Very advanced CRM systems have a host of features that provide a fully integrated sales process and delivery tool set. These systems are outside the scope of this guide as they are targeted at large enterprises.

People and CRM

No matter how good your CRM technology the weakest link will always be your users. Poor discipline in updating and maintaining CRM records will very quickly bring the system into disrepute, eventually turning it into a waste of money.

There are no magic answers to this problem other than the need for you to provide leadership and direction when using the CRM system. After all if the boss does not use the system then why should the salespeople? Many people in sales see administration getting “in the way” of them being successful and a CRM system can quickly be portrayed as a sales blocker, quite incorrectly. The only solution to this is to be relentlessly disciplined in its use and convince the team of its importance on a daily basis. The most successful larger firms often have correct use of a CRM system ingrained into their sales culture.

Do also consider the security of your CRM system. Many businesses have closed down following the loss of a CRM system through system failure or data theft.

The CRM choice

We have seen that a CRM system can be beneficial to many businesses. The choice of your CRM system, and indeed whether to have one or not, will greatly influence your sales success. Think long and hard about your individual circumstances and what you are trying to achieve by having a CRM system. It will not cure bad salesmanship, leadership or products but correctly utilised can be a tremendous sales tool

How much does a CRM system cost?

The answer can be almost nothing or an awful lot. A simple spreadsheet CRM system can be created in an hour or so if all you are doing is storing basic customer contact details and therefore costs almost nothing.

Some CRM systems available as shared applications on the internet will charge a monthly or annual usage fee, often based on numbers of people needing to access the system. This could cost about £50 per user per month.

More complicated systems hosted on your own internal network will often cost a lot more as they will require business process and integration consultancy to setup. A budget of £25,000 - £50,000 would be small for such a system.