An Overview of Customer Relationship Management (CRM) and CRM software

If you work in client-facing job such as marketing, sales, account management, customer service or similar role, you'll almost certainly be familiar with the term 'Customer Relationship Management', or 'CRM'.

In the past few years, CRM software has moved from being a 'nice to have' tool used by a few large corporations, to being an essential component of successful businesses of all sizes.

CRM is most often used to refer to a range of software applications which help improve business processes, and in particular those directly related to attracting and retaining customers. Depending on your organisation, this includes everything from identifying your most profitable customers to running marketing campaigns, progressing sales enquiries, scheduling service calls or dealing with complaints. More precisely, genuine CRM is a combination of business strategy and business processes brought together by software which, if implemented correctly, bring significant, tangible benefits to organisations.

This CRM knowledge base article covers:

  • CRM Software Applications
  • Why Use CRM Software?
  • Hosted or On-Premise CRM?
  • CRM and ERP?
  • How to Get Started with CRM
  • Price and costs of a CRM system
  • The Future of CRM

CRM Software Applications

There are many different CRM software solutions available, each with varying features, flexibility, interfaces, technical specifications, hardware requirements and access options. The key functions and objectives of the main mid-market CRM applications are, however, relatively similar.

The UK company Sage, more commonly known for its business accounting software, has two powerful and widely used CRM packages: Sage CRM, and Sage SalesLogix, plus the widely used contact management solution Sage ACT!.

For the past few years one of the largest areas of Microsoft funding (within business application development) has been for its flagship CRM application, Microsoft Dynamics CRM. This is arguably the current leading mid-market CRM application.

There are also low cost open-source CRM applications such as SugarCRM (whether it is wise to trust business critical information to an open-source application is a matter of debate), more long-standing applications such as FrontRange Solutions GoldMine, the web-based application SalesForce, and many more. Generally, choosing the right CRM solution for your business will need a brief assessment of your processes and the key aims and objectives of your CRM project. A good starting point is the Concentrix CRM software selection tool and the Concentrix CRM software comparison table.

Why Use CRM Software?

Modern CRM systems improve communications, increase profitability and reduce operational costs by streamlining the way customer facing staff work. By effectively integrating marketing, sales, customer service and other functions, a good CRM system makes it easier for everyone inside your company to work together and share critical information.

One of the first benefits a company gains from implementing a CRM system is having all the information about each customer, supplier, channel partner, prospect, stakeholder or other contact held in a single, accurate and up to date source. And this information is much more than just names and addresses. It will typically include a complete view of all communications, such as phone calls, emails, letters and faxes. It will also include product information, service history, past purchases, preferences, leads, opportunities, roles, projects, people: whatever information your business needs to have. So, rather than having important data kept on different PC's, laptops, network drives, on bits of paper or in peoples heads, everyone has access to a complete, holistic view of each customer.

But that's just the start and the benefits of CRM are wide ranging. What differentiates CRM from Contact Management is that CRM systems can be configured to structure and automate a variety of processes within your organisation. In this way they help efficiently manage even the most complex relationships, including partners, direct and indirect sales channels, distributors, retailers, and service providers. For example, a service enquiry can be automatically logged, rated, checked and prioritised, responses scheduled and tasks allocated to appropriate staff members. And if for some reason a task or response is delayed, it can automatically be escalated so other staff are informed, and the process continues until it's complete.

Similar workflows can be implemented to streamline sales and marketing, ensuring efficient campaign management, lead allocation, tracking and follow up. This results in cost savings, more accurate sales forecasting and improved win rates. CRM also improves account management, helping with cross-selling and up selling products, preventing existing customers going elsewhere and providing in-depth customer insight.

Just like other processes, the work flows within a CRM system can be as simple or complex as your business needs dictate. They can also be configured to best-practice guidelines.

CRM and ERP?

There are a wide range of benefits in integrating CRM and ERP systems, as it can streamline processes even further and enable better business intelligence.

Many accounts and ERP software applications have CRM modules within them. However, as a rule of thumb these modules tend to have less functionality than specific CRM applications. For example, the CRM modules in the ERP applications Microsoft Dynamics AX and Microsoft Dynamics NAV, are (confusingly) different applications to Microsoft Dynamics CRM. Microsoft Dynamics CRM is a much more powerful, flexible and feature-rich CRM application than the Microsoft Dynamics AX or Microsoft Dynamics NAV modules.

An exception to the rule is the mid-market business management suite Sage 200, which includes a CRM base module as standard. This module, called Sage 200 CRM is effectively the same software as the popular stand alone, web-based CRM solution Sage CRM. Like most mid-market ERP applications Sage 200 also has other modules are also available, such as Manufacturing, Project Accounting and Construction.

Hosted or On-Premise CRM?

Some CRM products, such as SalesForce, are available solely as hosted solutions, while others, such as Microsoft Dynamics CRM, is available as hosted or on-premise. With hosted CRM (often referred to as 'Software as a Service', CRM 'on-demand' or 'in the cloud'), the application and data is held on computers (servers), kept in an advanced data-centre. This means your CRM provider takes care of the running and maintenance of the software and servers 24 hours a day, seven days a week.

Hosted Microsoft CRM is a good fit for small businesses because you can be up and running with the software extremely quickly. Plus, you don't need in-house IT staff or high levels of technical skills. What's more there's usually little or no financial outlay in terms of hardware and IT infrastructure, and you simply pay a monthly fee to use the product, based on the number of users you have.

However, if you need a high level of software configuration, if you already have your own servers and IT staff, or if you want to fully own your system outright, then deploying a CRM on-premise is probably your best choice.

How to Get Started with CRM

Knowing where to get started with a CRM project is often the most difficult hurdle to overcome. The easiest way is to contact an independent CRM specialist such as Concentrix.

Right from the beginning of your CRM project, it's important to identify the specific problems, in each area of your business, you are looking to address. For example, you may want your customer service department to solve issues more quickly, or for marketing to improve the way they track leads, or for your sales staff to increase the accuracy of their sales forecasting. Once you've identified what you want the system to achieve, set some measurable objectives and Key Performance Indicators (KPIs), defining your success criteria.

It's highly unlikely that you will achieve the CRM functionality you require, from any CRM software solution, straight 'out of the box'. For this you'll need an accredited or certified CRM software reseller (often referred to as a business partner). Always check your business partner's references, for example by ensuring they can produce a variety of CRM case studies, can provide client testimonials and can arrange visits to customer sites. Also check the number of qualified staff they have working with them , how many projects they are working on and, if you're using Sage software, check that they're an accredited Sage Business Partner. Similarly if you're looking at a Microsoft product such as Microsoft Dynamics CRM, ensure your prospective business partner is a Microsoft Gold Certified partner.

CRM is about more than technical and software skills. To implement CRM systems effectively, a business partner will need a good mix of project management, knowledge of business processes and workflow analysis skills. They will also have experience of sales and marketing system design, customer service system development and managing the changes CRM projects bring about.

Whatever the size of your project, work to a project methodology and appoint a project manager. If you've chosen an independent CRM specialist as a business partner, they will usually include project planning and management as part of the package. This should cover everything from assessing your business processes to installing and testing the software to training and support.

Price and costs of a CRM system

The price of a CRM system depends on a wide variety of factors. These include the price of software licences, the price of software maintenance, professional service costs and support costs. It varies between systems, number of users and what you need the software to do. For more information on the price and costs of a CRM system, there's an article in the Concentrix CRM knowledge base called How much does a CRM system cost?

The Future of CRM

As CRM systems move from 'nice to haves' to fundamental business tools, so the scope of their use has also developed rapidly. No longer the domain of large businesses, they are used throughout both private and public sectors and in a wide variety of different organisations - from manufacturing firms to charities, from small shops to universities. The power, functionality and flexibility of CRM applications continue to broaden in line with their wider use.

As our methods of communicating increase, so too does the scope of CRM systems. With the advent of social networks, such as Twitter, Facebook and Linked-in, CRM systems are being used to monitor and analyse customer comments, feedback and trends. Hence the term 'Social CRM'.

'CRM' has evolved so that the 'C', (meaning 'Customer'), is slightly misleading. First, there are different types of customers - clients, consumers, students, passengers, shoppers, buyers, users, corporations - the list goes on. But more importantly, there are also many different types of relationship management, not just customers. There are suppliers, partners, prospects, members, associates, distributors, franchisees, retailers, volunteers, wholesalers, donors, channel partners, and many more. That's why the term 'xRM' is being used more and more often, (where the 'x' stands for 'Anything', as in xRM or 'Anything Relationship Management')

Whatever you call it, CRM is being used in a variety of ways to deliver real benefits to businesses throughout the UK. So if you're looking to gain a major competitive advantage, CRM should be part of your strategy. And for more information on making CRM a successful part of your business strategy, please contact Concentrix.