CRM (‘Customer Relationship Management’) is a broad term which can mean different things depending on who you ask and the context in which it is used. Systems described as ‘CRM solutions’ typically reflect this by addressing one or more of the areas listed below rather than all of them. When evaluating this type of software, it is therefore important to understand what you mean by ‘CRM’, and exactly what you want to get out of it.
1. Data cleansing, merging and deduplication. The quality of the data you hold about your contacts is key to managing a successful relationship with them. Many CRM systems offer functionality to validate data (e.g. checking of email addresses and postcodes), clean it up (e.g. normalising countries to a consistent form) and discard true duplicates in order to enable it to be used more effectively. This can be tricky to get right, and is a common stumbling block for many big projects driven by choosing a ‘new database’ as the starting point, while underestimating the challenges of migrating large volumes of existing and often messy data.
2. Single customer view. Often seen as the ‘holy grail’ of CRM, a single customer view allows you to see everything known about each customer in one place, and therefore gain a complete picture of your contacts. The best systems that offer this will integrate data originating from many different systems (e.g. subscribers database, alerts signups) and allow complex joining rules, including ‘multiple keys’ (such as email addresses, ID numbers etc) and fuzzy matching techniques. Since existing systems will each be serving a specific purpose, it’s usually most appropriate to add a single view on top, rather than trying to replace all of the systems you already have.
3. Analysis and data mining. Many CRM systems offer data analysis and reporting tools, enabling segmentation of customers for receiving targeted promotions. For example, contacts who have recently shown interest in your business but have not yet completed a financial transaction (e.g. newsletter subscribers) could be identified as ‘new prospects’ and offered special incentives to buy. Cross-selling (‘if you like product X, you might like Y’), up-selling (e.g. converting a one-off buyer to a subscriber) and re-activation (targeting lapsed buyers) may also all be possible. This segmented approach will typically achieve better conversion rates than ‘big blast’ campaigns that fail to take different customer groups into account.
4. Sales force automation. This type of CRM system enables tracking of all stages in the sales process, along with a history of all meetings, discussions, and proposals relating to a customer. When implemented across a large company, it can often help to manage and co-ordinate the activities of sales teams, which may be spread across many different regions or countries. The main focus of sales force automation is often the central logging of notes about customers and prospects by sales reps. Therefore, such a system is often just one of the components which will feed into a more complete single customer view managed elsewhere.
5. Campaign management. CRM software that offers campaign management is likely to include the specialist function of bulk sending emails. This needs to be implemented carefully to avoid being classed as ‘spamming’, as well as responding correctly to ‘bounces’ and unsubscribe requests. In addition, the software will typically include functionality to plan campaigns, record message opens and track how many links are clicked, and provide statistics to enable you to compare the success of different campaigns, using metrics such as ROI (‘Return on Investment’).
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