CRM – Customer Relationship Management

In times of economic prosperity, firms do not have to work too hard to increase turnover. Indeed for some years now many Waikato businesses have to restrain themselves from over-stimulating demand because of limited supply of labour and capital.

However when demand is hard to stimulate, existing customer relationships grow in importance as organisations seek a cost-effective way to nurture business expansion. I have spoken to many firms who say that today they have to go to seek clients out, whereas previously clients came to them.

While it is no panacea, customer relationship management (CRM) solutions can enable organisations to survive and thrive in any economy.

I am a very fervent advocate for CRM because I have seen so many businesses benefit from it. Firms that use CRM are expanding market share and turnover even in recessionary times like now.

CRM is a very large subject and encompasses a lot more than just the technology. It allows businesses to increase turnover and reduce costs through:

1. focussing on the right customers. This includes retaining existing clients as well as prospecting for new customers. By collecting vital information such as customer profile and history, CRM allows businesses to focus on those who are likely to bring them profits. Selling is more than just a numbers game; it is a qualified numbers game. If you can qualify your prospects you stop wasting time on those who won’t bring you a return.
2. doing more with less and maximising revenue opportunities. CRM helps you sail through the sales cycle with efficiency, precision and discipline. At each stage it allows you to program a `next step’ with defined actions, reminders and timeframes so that no opportunity or prospect falls through the cracks.

I often recount the story of a trades firm who sent their consultant to my home to measure up the wardrobes we needed. She did a meticulous job spending hours preparing drawings and costings of various wardrobes in various options. Then there was total silence as we waited for a follow up call. It never came and when my wife and I decided that we liked them so much we should make contact we discovered that that firm had just closed down!

CRM leads to better customer relationships which in turn lead to greater business and better margins as customers switch away from focusing on just price.

Excellent customer service is about being aware of customer needs and reacting to them effectively. CRM helps you to understand, anticipate and respond to your customers' needs in a consistent way, right across your organisation.

CRM is more than just the technology; it is a collection of organisational attitudes and orderliness designed to improve customer relationships. The discipline of CRM, in itself, is a great benefit to businesses. CRM will help your business if you view it as a set of tools that let you do more for, and get more from, your customer.

For business owners looking to eventually sell their business, CRM can help them maximise the price they will get. This is because it is a lot easier to prove the value of customer relationships when you have the full history of the customer. CRM also demonstrates that sales disciplines and processes are in play.

Like many ideas in IT, in the right situation this is one technology that can give you an unbelievable return on your investment.

By Alan Chew

Managing Director of the Houston Technology Group

This article appeared in the September 2009 edition of the Waikato Business News, for which Alan writes a regular column as "Your IT Adviser".