An Introduction to Customer Relationship Management Systems

Transcription

1 An Introduction to Customer Relationship Management Systems Business Information Factsheet BIF356 August 2018 Introduction Customer Relationship Management (CRM) is about understanding your customers, clients and prospects. Business owners often gather a great deal of information about customers: what they like; when they buy; how they buy; how they respond to marketing campaigns and so on. This information can be stored in various forms such as spreadsheets, invoices, mailing lists and survey results. Using a CRM system enables you to collate and use this information in a more effective way to help improve customer service, build loyalty and increase sales. This factsheet explains what CRM systems are and how you can use them. It describes the different types of CRM systems, provides examples of CRM software providers, and outlines what you need to think about when a choosing a CRM system for your business. What are the benefits of using a CRM system? Every business needs to understand its customers and gather as much information about their buying habits as possible. A CRM system can help you to: Collect and collate detailed information about your customers and prospects. Use that information to plan sales and marketing campaigns. Segment your customer database to target particular customer groups. Save money by targeting your marketing campaigns more accurately. Run promotional campaigns at short notice. Automate routine tasks and facilitate communication between sales, marketing and customer service staff. Manage orders and deliveries more effectively. Gain insights into changing buying habits. Manage information about customers and prospects in accordance with the General Data Protection Regulation. Types of CRM CRM systems come in two basic forms: 'on-premise' or 'cloud' systems. BIF356 Customer Relationship Management Systems - An Introduction to Page 1 of 5

2 'On-premise' systems On-premise systems are software packages that you install on your own server. You normally pay an initial set-up fee and can expect to pay an annual licence fee plus charges for technical support, software upgrades and customisations. You will also need the IT resources in-house to maintain your system and back up your data. On-premise systems can be a good choice if you want to: Customise your system extensively or integrate it with your existing office software. Keep control of your data on your own server. 'Cloud' systems These are online systems (sometimes known as Software as a Service or SaaS). In a cloud system, your software application and data are hosted on servers managed by the software provider. You access your account online and normally pay a monthly subscription fee, which may vary depending on the number of people in your business using the system. In recent years, online applications have become increasingly popular and many CRM systems are now accessible 'in the cloud'. Cloud systems offer the following advantages: You can get your CRM system up and running quickly. You don't need to pay a large fee up front. You don't need to have in-house IT support, as the software provider manages the system, performs upgrades and backs up your data. However, you should consider the following points: You will need to check that your existing back-office systems, such as accounts software, can interact and share data with the online system easily. You are still responsible for the security and privacy of the data you collect about your customers, even though you are not storing it on your own server. Examples of CRM systems There are many different CRM systems on the market. Some providers offer both cloud and on-premise systems, and many offer features tailored to specific sales, marketing or business activities. Most systems now allow you to access data from a smartphone or tablet, as well as from a desktop PC or laptop. Examples of CRM systems include: Salesforce. This cloud system focuses on tools for improving sales, customer service and marketing. It is available in several different versions, ranging from a basic 'off the shelf' system suitable for start ups and small businesses ( 20 per user per month) to a customised package with advanced features and extensive support ( 240 per user per month). Go to for more information. BIF356 Customer Relationship Management Systems - An Introduction to Page 2 of 5

3 Zoho CRM. This cloud system is customisable and simple to use. The basic version is free, and users can upgrade to more advanced versions ranging from $12 to $99 per user per month, Features include contact management, social media integration, marketing and sales automation, and an artificial intelligence-based 'sales assistant' to interact with customers online. Go to for more information. Insightly. This is one of the most popular cloud CRM systems, with 1.5 million users globally. It integrates well with other software, including Gmail, MailChimp and Evernote and is easy to use. It focuses on building customer relationships, sales acceleration and project management. There is a free introductory package suitable for a one- or two-person business, and users can upgrade to versions costing from $29 to $99 per user per month. Go to for more information. Apptivo. This is a cloud system aimed at small businesses. Features include order management, procurement and supply chain management, a 'help desk' to manage customer enquiries, and tools for creating and ing quotes and invoices. There is a free basic version for up to three users, and more advanced versions cost from $8 to $20 per user per month. Go to for more information. Choosing your CRM system With so many different CRM systems on the market, choosing the most effective system for your business can be difficult. The following points may help you choose a CRM system that is right for your business: Match the system to your business needs. It is tempting to buy the most complex CRM system you can afford, but often a cheaper system with far fewer features is all that your business needs. Make a list of all the features you need and find a CRM system that matches your business requirements. Try before you buy. Most CRM software is available under free trial. Never buy a CRM system off the shelf without first testing it thoroughly. If you can, enter some of your customer data in the system to see how it handles your specific customer contact processes and requirements. Make sure your decision is not just based on technology. It is important to consider the people in your business who will use the system. Consult them at every stage of implementation to ensure that the system meets their needs and is easy for them to use. Develop a contingency plan. Your business should not move to a new CRM system without a back-up plan to ensure your business can operate if the new system is temporarily unavailable. This is especially important for cloud solutions. Keep an eye on costs. Consider the long-term costs of each system and make sure you understand the ongoing costs and the level of service you are paying for. Low start-up costs can mask a higher overall cost, so make sure you understand fully all the costs involved before signing any contracts. Stay within the law. Your business may handle sensitive or personal data about your customers. Pay attention to data protection laws and take legal advice about how you store and process sensitive information. BIF356 Customer Relationship Management Systems - An Introduction to Page 3 of 5

4 Training and implementation. Consider what training your staff will need to get the best out of your CRM system. Think about the level of technical support you will need during the installation process and for everyday use of the system, and compare the levels of service that different providers offer. Customisation. Few businesses can afford to have a completely bespoke CRM system built for them. However, you can often have a level of customisation in your chosen system. Some providers will build specific features into your system although there may be an additional cost for this service. How to measure the effectiveness of a CRM system A CRM system can give measurable results in terms of improved sales and levels of customer service. There are several ways to assess results, including: By sales volume. This can be broken down into different categories, such as sales per employee or sales by geographical area. By repeat sales. This is a good indicator of customer satisfaction and loyalty. By the number of new customers. This can be measured in terms of an improved conversion rate of enquiries to purchases, or an increase in new customers buying for the first time. Using customer satisfaction surveys. This is a traditional way of obtaining 'soft' feedback on sales and customer service. As well as basic yes/no questions, your surveys should provide space for longer comments. Ensure you read these and act on them where possible. Once you have this information, you need to make sure it is delivered in the right format to those employees who need it. It is important that everybody in the business can learn from the information you gather and you should have effective processes for sharing that knowledge. Hints and tips When choosing a CRM system, focus on how it will best help you serve your customers. Be clear about what you want the system to do and be realistic about what you need. When collecting information about your customers, identify exactly what you need to know and how it will help your business in practical terms. Check and clean your customer database regularly to keep the information up to date and accurate. Remember to set aside time and budget for training your employees to use the system properly. Don't regard your CRM strategy as a short-term project with a completion date. Treat it as a process of continuous improvement. Customer needs change and your business needs may change too. Your CRM strategy should be able to adapt accordingly. Established businesses often face problems when trying to set up a CRM system because of other existing systems. If your business already has a bespoke system that you need to keep, BIF356 Customer Relationship Management Systems - An Introduction to Page 4 of 5

5 discuss this at an early stage with your CRM provider to ensure a smooth installation and migration from your existing system. Further information BIF003 A Guide to the Data Protection Act 2018 BIF044 Developing a Marketing Plan BIF107 Profiling your Target Audience BIF389 Tips for Building Customer Loyalty BIF536 A Guide to the General Data Protection Regulation (GDPR) Useful contacts The Information Commissioner's Office (ICO) is an independent authority concerned with information rights and data privacy. It provides information on privacy and electronic communications, and data protection. Tel: Website: Destination CRM is a useful source of news and information on implementing CRM. Website: DISCLAIMER While all reasonable efforts have been made, the publisher makes no warranties that this information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate. Cobweb Information Ltd, Unit 9 Bankside, The Watermark, Gateshead, NE11 9SY. Tel: Website: BIF356 Customer Relationship Management Systems - An Introduction to Page 5 of 5