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What is CRM?

CRM (Customer Relationship Management) combines the three functions of sales, service and marketing in a single platform. The logic behind the solution is that customer purchase history can be used to promote more solutions during service calls and allow for better product design and sales.

Originally, the three functions were separated. Sales closures entered and tracked in one tool were used to see how much commission should be paid out. Service calls were passed to another group who would monitor existing customer support calls. A third system (the marketing or business intelligence tool) consisted of a large database to analyze markets and trends. By linking the functions, you pass a client through the sales cycle and into marketing queries which allows for the answering of support questions all from one solution.

The strength of a CRM solution is its ability to adapt to different business models. Selling network servers follows a different path than selling construction equipment.  The complexity of subscription or recurring billing models is completely different than straight sales methods.

The same can be said about customer service systems. A call center used to support phone services would function differently than one for a shoe company.

With the various business models in the world, it’s important to be able to create process flows, automated task management, activity management, and alerts that make the system more efficient. Though many companies today have yet to use CRM ubiquitously throughout the company, many will combine sales and marketing or have dedicated support solutions running on CRM platforms.

What differentiates a CRM tool from a rolodex and calendar is its focus on specific groups of actions to be managed within each discipline. Specifically, the ability to track opportunities for sales, cases for support, and campaigns for marketing are all unique to CRMs. These three functional groupings are highly focused on actions and tasks required to accomplish a sale, a support case, or a marketing goal.

For example, an opportunity (sometimes called a deal) is a condition in which a company or person has been introduced to the product being offered and has shown interest enough to warrant further communication with the goal of purchase. Depending on the business models, opportunities may require demonstrations, proposals, contract signings, or pre-sales solution design. Any one of those actions may need to be organized in order to occur in a specific order with dates and communications to the client or to management. Each activity to be tracked can be reported on and displayed in charts and graphs to show sales progress until the sale is closed (won or lost). Management uses the tracking methods to improve sales speed and to improve sales forecasting. Salesmen use the tool to ensure that they don’t forget to call or follow up on actions requested by their prospects, to create quotes, to get pricing, and to share the customer’s needs and comments to other sales support team members. All of the previous actions need to be configured to match the goals of the company so that sales processes are not burdensome to the users.

Once a sales process has been designed and configured in the system, a good CRM tool allows management to see reports and use graphs on a dashboard to view progress on different scales. Workflow automation ensures that there is a minimal amount of manual steps to be followed. Any opportunity to automate a step in a process should be investigated to remove more burdens and improve the quality of the output.

In later postings we will address the movement from CRM to SRM or Subscriber Relationship Management. What differentiates the sale process for a customer versus a subscriber? What alienates subscribers once a deal is consummated? How does the relationship and expectations differ? This is the market trend and the next phase of Operational software.