Customer Relationship Management (CRM) Software Programs - FAQ

What is CRM?

Customer relationship management(CRM) is a broadly recognized, widely-implemented strategy for managing and nurturing a company’s interactions with customers, clients and sales prospects. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. 

What Is The Role Of CRM Software?

It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. However, thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM software as a tool used in the process of bringing together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.  

For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth. 

What Are CRM Software Goals?

The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs. 

CRM software is a must-have in today’s business environment if you wish to develop, manage, and grow your business. CRM software helps you retain customers and at the same time grow your customer base. All businesses, big or small aspire for a CRM solution that is the perfect fit for them. However, given the not-so-impressive rates of successful CRM deployments it is crucial that you know what you are getting into when you decide to deploy a CRM solution. 

To manage the relationship with the customer a business needs to collect the right information about its customers and organize that information for proper analysis and action. It needs to keep that information up-to-date, make it accessible to employees, and provide the know-how for employees to convert that data into products better matched to customers' needs.  

A simple installation and integration of the CRM software package doesn't ensure success. It has to be absorbed into the system. Employees have to be convinced about its positive attributes; then they have to be trained. The existing business processes may have to be modified. The company has to decide what kind of information is to be collected about the customers, how it should be categorized, analyzed, how it should be extracted and how it should be used and prioritized. The company must drill into this database of its customers and ascertain their buying patterns, product preferences, the potential for add on sales etc.  

A good strategy will be to integrate every area of touch point with customers like marketing, sales, customer service, and field support. This is achieved with the integration of the people, process, and technology in the business.  

What Benefits Can Be Gained From Using CRM Software? 

·   Helps an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. 

·   Assists the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices).

·   Allows the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.

·   Provides employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners. 

Many organizations turn to CRM software to help them manage their customer relationships. CRM technology is offered on-premise, on-demand or through Software as a Service (SaaS) CRM, depending on the vendor. Recently, mobile CRM and the open source CRM software model have also become more popular. 

Other Benefits From Using CRM Software

These tools have been shown to help companies attain these objectives: 

·     Streamlined sales and marketing processes  

·     Higher sales productivity  

·     Added cross-selling and up-selling opportunities  

·     Improved service, loyalty, and retention  

·     Increased call center efficiency  

·     Higher close rates  

·     Better profiling and targeting  

·     Reduced expenses  

·     Increased market share  

·     Higher overall profitability  

·     Marginal costing 

How to choose the right CRM software solution for your business?

Most businesses have similar expectations from a CRM solution. However, there are certain factors that you should consider in selecting a CRM, so that it is suitable to your business practices and customer approach. These factors should cover the people, processes, and technology that will play a role in the successful deployment of your CRM solution.  

1. Know your requirements– Your CRM software purchase decision depends heavily on your awareness of your business requirements. You can shop around only if you have a clear idea of what your company needs. Your need analysis enables you to be in control and ask prospective vendors the right questions instead of being swayed by their salespersons. It forces the vendors to put forth realistic quotes without glossing over costs that get added on to your bill at the time of payment. Targeted marketing, richer customer data, integration of applications, centralized database, generating more leads, leads conversion, efficient reporting, mobile connectivity are some of the factors that you need to consider. Of these some factors could well be important business requirements and some not so pressing. Your need analysis should factor in your state of preparedness for deploying a CRM solution as well as your growth plans.  

2. Cost– Your financial capabilities are an important consideration. The size of your business, present number of users, and future plans will have a bearing on the cost of the software and the total cost of ownership (TCO). Compare vendors for the one-time cost of software and the TCO over a period of time. Crunch the numbers and do a ROI. In most situations small businesses are much better off with the SaaS (software as a service) option where they pay only for what they use; however it is also possible that the TCO over a period of time can go beyond owning an on-premise CRM solution. You can bring the deployment and maintenance costs down if you have the requisite IT infrastructure. 

3. Usability– This is a factor that can make or hinder CRM deployment within a company. A CRM system that facilitates intuitive navigation, entering of data and access to information with minimum number of clicks ensures user acceptability. Employee training is a cost and the process can drag if your CRM system of choice requires that your employees have to grapple with tabs and functions. Check the extent of training support provided by the vendor; how many personnel is it willing to train and for how long. Find out if there are any extra training costs involved. Will the vendor provide training support at the time of upgrades? 

4. Vendor analysis– Once you have your requirements sorted out, you can compare vendors in an objective manner. Armed with a prioritize list of requirements you can assess, select or eliminate vendors without wasting undue time on the process. The vendor should be assessed on two counts – technology and fitness for long-term business relationship. The technological must-haves are dictated by your requirements. The vendor’s experience in your vertical is important. A CRM solution pre-customized to your specific needs will work out cheaper than a generic CRM that you are forced to customize later. Select a vendor who you feel fits in nicely with your business environment. Your staff and the vendor will have to work together for a successful deployment and it’s only possible if you and the vendor see eye-to-eye on key issues. The vendor’s standing in the market, his history of innovation and vision for the future are also important considerations.  

5. On-premise or on-demand– The deployment method depends on your finances, whether you are a first-time CRM user or making a move to another vendor, your in-house capabilities and other factors. On-demand is cheaper for the short term and allows your field staff to stay in touch with their counterparts behind the desk. It is a better alternative if you wish to deploy mobile CRM. On-demand CRM is also far easier to deploy, you can have it running in a matter of days. On-premise CRM offers greater control of data and better results for your customization efforts. However, it’s an expensive proposition and well nigh out of reach of SMBs.  

6. Integration of data– Compare vendors for the ease with which their product can integrate with legacy applications in your enterprise. The prime objective of CRM is to provide users with a single truth about the customer and eliminate the use of multiple silos of data. This can be achieved only if the CRM software integrates smoothly with existing applications. It is also important from the point of view of achieving an ROI from applications that already exist within the company. Integration capabilities are important as protect you from vendor lock-in. You reserve the option of building your systems with products and services of different vendors. Also check if the vendor is capable of cleaning the dirty data that is invariably generated during the course of the initial data integration.  

Selecting a CRM solution can be a difficult task but given the benefits that follow the successful implementation of a correctly chosen CRM, it is well worth the effort. So, do your research, be informed, compare and ask questions. You will surely find a vendor who is the perfect fit for your business.  

What Factors Should Be Considerd Before Using CRM and CRM Software?

·      Are customer segments are well defined?

·   Do human resources management practices empower all employees to participate in improvement initiatives?

·   Do employees at all levels receive the education and training they need to participate effectively?

·   Are senior executives personally and visibly involved in demonstrating that improved customer satisfaction is a high priority strategic goal?

·   Do customer-service performance measures exist at the organizational, departmental and individual job levels and are widely publicized and acted upon?

·   Is communication frequent and informative?

·   Are all employees aware of their internal customers and suppliers.

·   Is the working environment conducive to the well-being and morale of all employees?

·   Does the organizational hierarchy inhibit effective and constructive two-way communication over process improvement issues?

·   Are the company's values clearly articulated and understood by all employees.

·   Are they constantly and consistently reinforced by the actions of all managers?

·   Do goals for customer satisfaction make us stretch, yet are attainable?

·   Does the company encourage close collaboration and teamwork?

·   Do employee performance appraisal, recognition and reward processes strongly promote involvement in delivering customer satisfaction?

·   Are business processes regularly reviewed to eliminate non value-adding activities and improve customer satisfaction?

·   Are relationships with customers managed effectively and involve obtaining information from them to improve products and services?

·   Are business cases for change clearly articulated and validated?

·   Are customer complaints welcomed and resolved quickly and positively?

·   Are effective processes for determining current and future customer requirements and expectations applied both systematically and rigorously?

·   Do strategic and business planning processes have a strong focus on customer service and produce clear objectives for improvement?

Use a scale of 1 to 5 or 1 to 10 and then take actions to strengthen weak areas.  

What Are Common Features Of CRM Software?

When it comes to application of CRM, three broad classifications are possible. They are:   

• Operational CRM  

• Analytical CRM  

• Collaborative CRM   

Operational CRM Software

The operational application of CRM enables effective interaction with customers. These contact management tools aim to reduce costs by improved process efficiency and use of media based communication channels. These are also aimed to provide customers with a consistent interface across all communication channels. To achieve this relevant customer data is collected and also displayed at all customer touch points. This is the customer master data. Another set of data where employees' contact with customers is also logged. This has information like topics discussed, customer requirements, soft customer data like hobbies, preferences, interests, details about children and other minor stuffs.  

Banks are an exemplary implementation of CRM as customer contact management. Channel management tools aim to understand how customer interacts with the company. It aims to deliver products and services across multiple channels in effective, efficient, and consistent manner. Content management tools enable the company to manage what is visible to the customers i.e. what the customers are able to see when they interact with the company. The various processes undertaken are: campaign management, sales management, service management, and complaint management.   

Analytical CRM Software

The data collected in operational management is analyzed to segment customers. The valuable information thus obtained is used to satisfy customers. Analytical CRM is composed of:  

1.Pattern discovery component  

2.Product and customer analysis component  

3.Multitude component  

4.Sorting and customer fractionation component  

5.Customer value evaluation component  

Analytical solutions provided for most companies are integrated view of customer across all channels and applications, campaign performance analysis, customer profitability analysis, cross-selling and up selling. The analytical solutions help answer questions like:  

1.Who are their best customers?  

2.Whom they are likely to loose?  

3.How to retain them?  

4.How to attract new customers?  

5.How to improve profitability of customers?  

Examples are data warehousing, online analytical processing (OLAP), and data mining systems.   

Note : Concept of customer segmentation : the value of customer is judged based on RFM analysis i.e. focusing on Recency, Frequency, and Monetary value from customer purchasing data in retail business. Accordingly the customers are divided into various levels. The four main segments of customers are:   

• At the top is the VIP customer whose expenditure is most and form 1% of all customers in a certain period.  

• Then the main customer forming 5%.  

• Next the ordinary customer forming 20%.  

• And at the bottom is the scattered customer an overwhelming 80%.  

The first three categories create more than 80% of all profits for the company and as a result they are differentiated as the best customers. They are the real targets of Customer Centralization.   

Collaborative CRM 

The various departments of company like the sales, technical support, and marketing, share the information they collect about customers. The objective is to improve the quality of customer service and increase customer loyalty.   

It allows the company to synchronize and manage efficient, productive interaction with customers, prospects, partners, and internal associates across all communication channels. The customers' viewpoint is taken care of at every transaction level thus enabling better service to the customer. Collaborative CRM also reduces web service costs by enabling web collaboration.  

What Factors Should You Consider In Purchasing CRM Software?

• Product functionality and modularity
• Hosted vs. installed
• Implementation
• Integration
• Multi-channel customer access
• Specific deliverables
• Change Management
• Costs
• Usability and adoption
• Training
• Customization / Dashboards
• Timelines
• Security
• Activity management
• Self-service Web portal
• Vendor business history
• Reference customers
• Support and service
• Upgrades
• User interface
• Business intelligence and reporting
• Payment terms, penalty terms
• Prior successes with businesses such as yours
• If modular, can this be done in stages?
• Is there a “lite” version that might be less expensive, yet fill all the needs of a business such as yours?
• And anything else you can think of that might impact your business

What Factors Should Be Considered In CRM Implementation? 

To implement CRM, following factors need to be given due consideration:   

• Easy interaction between customers and company, enhancing quick response to customers' request and suggestions  

• Easy access to information about company like content of customization, advantages of the company, benefits doled out to the customers. This establishes profitable relationships with the customers based on mutual trust and respect  

• Abundant supply of customer information which have been accumulated and integrated from different channels  

• Grow with customers i.e. customers' information should be updated along with the passage of time  

• Have cordial relationship with other companies targeting the same customer segment. Thus giving relevant solution to customers' need and increasing acknowledgement to customers  

• Customers' information must be segmented to provide support for customization based on personalized information i.e. tailoring the company's product and services accordingly  

Improvement in customer relationships increases customer loyalty, decreases customer turnover, increases sales revenue, and decreases marketing costs, thus increasing profit margins.   

What Companies Are Best Suited To Use CRM Software?

Companies that do not have repeat business from customers will not gain much from CRM. And also that have walk-in customers not providing multiple sales and service channels will not benefit much from CRM. Again if maintaining long term relationship with customer is not a priority for the company, it will be wise not to invest in CRM.   

Then who benefits? The more the channels to access customers and more the number of touch points with customers, greater is the need for CRM installation. Companies in:

• banking  

• finance  

• insurance  

• airlines and hotels  

• telecommunications and health care benefit from installing CRM software. 

• utilities    

What Are Some Desirable Technical Functionalities Of CRM Software?

Multiple communication channel - This is one major factor of CRM, which enables business to be responsive to the needs and desires of its customers. CRM solutions provide better utilization of all communication channels in company. The various communication channels are:   

• Web channel - This supports a number of customer service and customer account management activities. Customers can verify and browse product descriptions and also report problems through this channel.  

• Fax channel - Company can use this channel to generate fax that is sent directly to customers, while customers use this to submit requests for information and contact.  

• Interactive TV channel - Cable TV companies interact with customers through this channel.  

• IVR (Integrated Voice Response) - This channel answers all incoming calls from the toll free network, and also provides guidance through use of prompts.  

• E-mail - Customers can e-mail their service requests and check status. The company can also use this as outbound channel to distribute information.  

• Direct mail - This channel is used primarily for outbound communication to customers. The inbound direct mails are not managed by CRM.  

• Direct field sales force channel - Activities like browsing product offerings, capturing leads, completing orders, and performing high level customer care are all done remotely by the agents through this channel.  

Database - database of customers is created by collecting information through semi-structured interviews, document analysis of annual reports, organizational charts, and system charts. The information is collected on the basis of strategy and process of CRM. The information thus collected is continuously updated to build up a lifetime relationship.   

Workflow and assignment - CRM solutions enhance the customer service by clearly defining the tasks, assigning the tasks to the various departments. The order of carrying out the tasks is spelt out. CRM solutions also monitor the smooth flow of information to support the task and finally keep track of the tasks being completed.   

Scalability - CRM applications can be used on a large scale, in terms of number of participants it can handle, and can be expanded to any desired scale.   

Privacy concerns - This functionality is one of the major factors in the selection criteria of CRM applications. Those organizations implementing customer facing operational applications, customer intelligence, and customer-centric marketing must give priority to customer privacy issue in deciding the business strategy. Questions like how customers' privacy can come into play during operation and how it is protected in each application need to be answered first before choosing the right CRM solution.  

Why Do Some Companies Not have Success In Using CRM Software?

Often it is seen that CRM applications has not brought success to organizations as expected. The failure rate for CRM implementations is as high as 70%. The reasons are:   

• Absence of a clear transitional process i.e.. a step by step awareness, a clear funding strategy, and attainable goals is a must rather than introducing sweeping changes all at once.  

• The main focus of business is on products' sale and geographical segmentation of market but not on customer segments.  

• Key performance measurements are not tracked. Data integration, interdepartmental communication, and good supervision of these processes are critical to success.  

• Weak functional organization of a company can cause customer and employees' confusion.  

• Short term interests are often given importance. Ethics must be given priority over financial gains. A customer focussed company must be prepared to make recommendations in favor of customers even at the cost of short term interests of the company.  

• The financial measures of success are often inadequate. In a customer centric model the branding, research, and development must align with development, compensation, budgeting, and incentive policies.  

• Other new technology and solutions are introduced without implementing the necessary framework.   

What Are Some Popular CRM Software? 

Many versions of CRM software are now available in the CRM market. Open source enables any and every programmer to read, redistribute, and modify existing source codes to evolve a new software. Thus there is scope for rapid development. And thus various open source CRMs too have evolved. Some of the widely used open source CRMs are SugarCRM and vTiger.   

SugarCRM 

vTiger CRM 

Daffodil CRM

SAP CRM  

What Is The Future Of CRM and CRM Software? 

CRM is here to stay and will evolve. The desire to improve customer satisfaction and retention of customers will constantly drive the need to improve CRM systems. 

Economy is now driven by customers and not by sellers as in the past. There are different type of customers, different types of business models, and selling strategies. And it is a matter of time when there will be different types of CRM software to support these models.   

Technology will improve to put more functionality tools in CRM applications as there is more demand for knowledge management systems, sales coaching systems, and service intelligence systems. Information today is in the form of maps, charts, and graphs generated by report writers and visual profiling programs. These will give way to voice activated and speech feed-back tools and other elaborate visual aids using 3-D and CAD style graphics.  

If this FAQ was informative or if you would like to provide feedback, do send us an email with your comments. 
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