How Do You Define CRM?

by Mike Boysen

CRM is software.

I guess that’s all there is….it’s magical. The reality is that CRM is not software even though the software vendors really really want you to believe it. CRM was initally the result of some deep-thinking after the complete failure of the Sales Force Automation (SFA) hysteria. The software companies quickly latched onto the new term for obvious reasons.

If you stop to parse out the acronym, you get the words Customer Relationship Management. OK so the software manages your customer relationships for you. It must be pretty great! Even though the word “Software” is missing, many fail to realize that CRM is really about creating greater customer loyalty through a customer-focused way of doing business. Understanding your business through the eyes of your customers and prospects is a major part of what CRM is all about.

But, a solid CRM strategy must also incorporate some cold hard facts about your customers as well. Which ones are truly profitable so you can focus your efforts accordingly. Do you know what their needs are? Do you know what the like, and don’t like about doing business with you, or with a competitor? Your strategy for implementing CRM must address all areas that contribute to your revenue, costs, profitability and lost opportunities.

If you or your company is thinking about CRM, stop thinking about software and starting thinking about this:

Software will not transform your business. It’s there to support your business strategy, which in this case is based on improving your customer relationships. You and your team must define a way you will do business with prospects and customers, not some software package. You must define measureable goals and measure them. You must include all parts of your business in the development of the plan, so they take ownership back and deliver on the plan, together, all customer facing units. CRM starts from the top, not the second tier, such as sales, marketing or customer service. They will be executing your plan….together.

Now you can think about the software. What does it need to do to help you execute your plan? Probably not as much as you thought before you started your CRM Plan.

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