The buzz words may have been popularised in the mid to late ‘90s, but Geoff Cossey at Chillisoft Ltd says the concept is nothing new.

"It’s a business strategy. One that can well be supported by software. I remember an old friend of my father’s who was a very successful salesman. He kept detailed notes of all his customers and prospects – birthdays, product preferences, favourite sports teams and so on. He’d read up before calling someone and update his notes after every contact. You could say he practiced ‘CRM’.

"Imagine how much easier it would have been for him if he’d had access to today’s technology, particularly if he had to share his customer information with other team members. Then imagine how much the team would have benefited if everyone used the same tool."

Centralised customer data

CRM technology provides that tool; a system to integrate all your customer information and automate many business processes. Rather than storing information in a dozen different files and spreadsheets, and in the heads of employees who could walk at any time and take it with them, CRM technology centralises all customer information into a core database that allows it to be shared by different areas of the business (accounts, sales, customer services etc). It also provides a ‘global’ view of customers – showing all their interactions with the business.

But it’s not all about technology: "It starts well before and continues long after technology selection," says David Sims, contributing editor for CRMGuru. "CRM isn’t about technology any more than hospitality is about throwing a welcome mat on your front porch."

Nina Crowe, business solutions manager at Savio Solutions agrees.

"CRM is about combining sound business strategies with technology to enhance the experiences that existing and potential customers have with your organisation."

That technology can do more than just centralise customer information.

"It gives companies the tools to analyse and understand customers, uncover trends to help with business strategies such as targeted marketing, customer loyalty and customer service initiatives," says Crowe.
The same ‘tools’ can ensure all communication provides the customer with a personal experience (mail merges and e-mail merges) and that there is visibility of communication with everyone across the organisation ‘singing from the same song sheet’. They also have the potential to manage marketing activities and sales opportunities from the initial lead, to prospecting, proposals, follow-up reminders, and to closing deals.

Standardising sales and support processes, says Microsoft’s Ben Green, eases the load on growing businesses struggling to maintain the same standard of customer service as the company grows.

"This is the paradox of business growth; where excellent sales and service has enabled the business to grow, these same processes are the hardest to maintain and scale."

Green emphasises that the key to a successful CRM project is for a business to have a clear sense of their customer relationship strategy first. "A software tool can support a strategy but is not a strategy in itself. Businesses first need to consider what their customers’ experiences should be, then look at the tools in the market that can support this."

Geoff Cooper at AIM Proximity echoes those sentiments. "Systems and software are just tools that help businesses implement CRM strategies, which means it’s critical to think deeply about what you really need, as a business, to succeed."

The question businesses should be asking is, ‘what do we need to do to improve customer interactions with us?’

"CRM software can measure what happens but if you don’t put the effort into getting staff trained and focused on customer interactions you’ll simply be measuring that things aren’t improving," says Cooper.

Microsoft entered the local CRM software market when CRM 1.0 was launched in New Zealand in January 2004 (Version 1.2 is now available, as well as a feature pack).

Green says that globally the uptake has been ‘huge’. But he agrees with many in the industry that SMEs are still largely unaware of the benefits CRM systems can bring.

"However, these same owners will understand the benefit of having professional sales and customer support processes because these are things that relate directly to revenue and customer satisfaction. That’s essentially what CRM is to a business, small or large. It doesn’t matter what the company size is, all businesses benefit from these things."

So does the size of a business dictate the CRM technology options available?
Not at all, according to Green.

"It’s not so much about the size of a business as the complexity of their CRM requirements."
Consider the product life-cycle says AIM Proximity’s Cooper. Is it a retail business focused on daily sales or one selling a one-off product like home insulation?

"The answer to this tells you how long your customer memory needs to be and helps you understand the best time in communicating with past customers."

Cooper says other critical questions which need to be asked include where customers come from – are they new or repeat business, and are they of equal value? – who are the most valuable and what is most important
to them?

Applying CRM systems

"Budget always influences decisions," says Chillisoft’s Cossey. He suggests business owners and managers should introduce CRM technology initially in ‘the area of most pain’.

"For example if a business is doing a lot of quotes but closing few sales because they are not following up – or if the sales team is unaware that their clients have issues with the service team."
Cossey says often a ‘small steps’ approach can give the fastest results and set the tone for further measures later.

Budget aside for a moment, consider the following when looking at the available technology:

And the typical costs?

Savio Solutions suggest five-user CRM implementation can run from under $5000 to around $8000. This is taking into account software, installation and data conversion, training and on-going support.

A 10-user implementation may range from $17K to $22K.

The value in CRM says Crowe, is finding the right combination of a good partner who understands your business, getting the people behind the requirements and implementing the technology to support these initiatives.

"CRM is made up of three things; people, process and technology. People and process are paramount. They’re the key to the CRM strategy and shouldn’t give way to technology."
Her advice to business is to look for a solutions-based ‘partner’ that can provide on-going services following the software implementation. These should include various levels of training and a dedicated help desk.

It’s also advisable to check out the credibility of the organisation by asking for client case studies and reference sites, says Crowe. "There are some cowboys in the IT market."

Migrating to Microsoft

Premium Power Ltd, distributors for Kohler engines in New Zealand, uses Microsoft CRM to manage a database containing 1800 customers and prospects.

Originally a subsidiary of Parkland Products Ltd, the companies have a long history of CRM software.

Mike Anderson explains: "We started off with Symantec Q&A, moving to FrontRange Goldmine (a database still used at Parkland Products), and, for the past twelve months, Microsoft CRM."

Anderson says the reason one part of the business uses Goldmine and another Microsoft CRM is simply "caution on my part".

"Because Microsoft CRM is new and we are so dependent on our CRM database I wanted to make sure it performed before switching the larger company over to the same program." (Parkland has 40 staff and an 8000 customer/prospect database).

He says CRM principles and software were adopted to help accumulate information on customers, manage customer activities, and undertake specific direct marketing campaigns.

"In the early years the focus was on direct marketing but gradually we’ve extended this to the point where we use our CRM databases for practically everything to do with customers."

Premium Power was looking at five key areas when shopping for new CRM software:

Anderson reports that the transfer of data to Microsoft CRM was ‘a piece of cake’. Data was imported from Goldmine and exported to MS CRM very quickly and cleaning errors was not a problem. Staff training was also no problem. "Within a few months staff achieved the same level of competence as they have with Goldmine." The only glitch to date has been the failure to integrate MS CRM with Solomon.

And the differences to the business? They are summed up as the following:

Anderson has advice for SMEs considering a move to CRM technology.

"Determine what you want out of the software. Don’t aim for 100 percent functionality from day one! Grow the use of the software with your own business systems and staff attitude to CRM principles."

And, says Anderson, get yourself a good re-seller who can provide customisations and help as needed.

"And spend a few hours a week trawling through the information available. It’s surprising what you learn."

Tracking customer history

Zenith Corp Solutions markets natural health products. The company has six staff.

Operations manager Andrea Black says their move to CRM software was driven by a desire to have a complete history of customer ordering with the intention to utilise the database in the future for mailouts and marketing new products.

She says the company outsources their call centre operations but data is held by individual call only.

"This is very limiting when needing to know complete customer history. We needed software where we could load historical data, plus weekly uploads." She says they also needed fields for unique customer information and the ability to add their own history items to gain greater knowledge of their customer profiles.

"We also wanted a good degree of in-house customisation."

Zenith Corp looked for a partner who was efficient, cost effective and actively supported the software.

Chillisoft provided the expertise they needed and Black says the outcomes include improved efficiency managing customer enquiries, greater confidence in their data and improved accuracy between Zenith and its customers.

And Black’s advice?

"Thoroughly research the options available. I found the Web a great resource, but make sure the chosen software is supported locally. And look at ‘out of the box’ products that give you 90 to 95 percent of what you need, with some customisation."