Silencing the CRM Cynics
- by Steve Gibson, MD of Daybook Ltd -

The knives are out for Customer Relationship Management (or, CRM, as it is better known) vendors. The name alone can cause waves of cynicism.

CRM’s reputation has been sullied by costly and ineffective installations of software systems. They had promised to transform their users’ ability to win and retain business and failed miserably.
However, what many people have failed to realise was that CRM is a process, not just a piece of software. As such, it needs to be refined month-by-month, year-by-year. In fact, exactly what CRM involves differs radically from company to company.

For CRM to work effectively, it is essential to have a system that efficiently records and analyses a customer’s potential, interests and buying patterns, in order to provide an excellent base for closely targeted marketing and customer service. In this article I would like to focus specifically on user-hosted CRM as a powerful business-winning tool and how it compares with using a direct marketing agency.

Good marketing combines many approaches and gears them all toward the same result, so that CRM and Direct Marketing (DM) reinforce each other. Good CRM procedures and systems enable you to get the most out of any leads or clients obtained through DM, or by other means. They help you get the maximum conversion rate, repeat business and referrals.

Direct Marketing (DM)

DM sent to people who already know you can be incredibly effective if it is backed by sound, up-to-date customer information. (For this you need a good CRM system.) However, problems arise when DM companies want to use their own lists and/or have no way of recording customer response. CRM, by contrast, uses carefully targeted data and records responses and so actually works against the interests of DM agencies by giving you, the client, independence.

As it is generally practised, DM is all about numbers: relatively low rates of return from high volume: 1% is acceptable, 3% good. CRM is about precision: much higher rates of return from lower volume: with a really well-thought-through campaign you could multiply your results five- maybe even ten-fold. To get that precision, you need a software system that can mirror your needs precisely. This normally means being able to do detailed and often complex searches; to use relevant information in all you client and prospect records; and the ability to change your processes as markets and fashions change. From a software point of view, your system will need to be scriptable or programmable, to give you the accuracy you need.

All this is much easier said than done. Great CRM exists in companies that have a passionate commitment to it. Software can only streamline CRM, ensure that procedures are followed, automate time-consuming or repetitive tasks and give you the ability to do things that you might otherwise not have time for – but only you can put CRM at the heart of your business.

If you have a passionate, ongoing commitment to the process of CRM and a really good CRM partner to work with, then CRM software can totally transform your direct marketing and customer service. You will also have a team of motivated staff who are proud of what they do – and any cynicism about CRM will have vanished..

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