Customer Relationship Management (CRM) for Medium and Small Enterprises

How to Find the Right Solution for Effectively Connecting with Your Customers

Antonio Specchia

• Publisher: Productivity Press
• Year: 2022
• ISBN:
  9781000532746
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

Customer Relationship Management (CRM) systems are a growing topic among small- and medium-sized enterprises, entrepreneurs, and solopreneurs, and it is completely clear that CRM is a tool that businesses should have in place to manage sales processes. Teams of salespeople must have a system to run their daily activities, and small businesses and solopreneurs must track their marketing effort, a functioning structure for maintaining their contacts with prospects and clients to improve the effectiveness of their sales effort. CRM, once only available to large corporations, is now powerful technology for small and medium businesses. Small and medium businesses are now able to implement CRM solutions under a more cost-effective balance as an alternative to traditional tools like Salesforce, Dynamics, or Oracle. The reason for the success is mainly the simplicity of the new tools and solutions that have been developed for the management of sales processes.

This book discusses how to implement a CRM from the perspective of the businessperson—not the more typical IT consultant or the technical staff. It benefits business development, sales management, and sales process control. Small business owners must understand why and how implementing a CRM will create value for their business—how it will focus on business development, sales management, and how sales leads develop into happy customers. Small business owners must first understand what a CRM system is, how it works, what its main functions are, and how it serves to manage workflows in the company's sales department.

Generally, entrepreneurs struggle to find the time to read and study complex and fully comprehensive books. This book provides direct operational guidelines to those who need easy-to-read information about how to use CRM effectively. Business professionals must be able to set up CRM systems and avoid mistakes and wasting time. This book provides an overview of what can be done with CRM and how it happens to empower businesspeople to find new customers and win business opportunities.

This book discusses the logic of CRM in sales, giving tips and explanations on why and what happens when CRM is implemented in a specific way. Essentially, this book gives the entrepreneur the know-how behind CRM in sales in general terms, supporting enhanced customer relationships.

Chapter 1 Understanding CRM

DOI: 10.4324/9781003148388-1

First of all I would like to make it clear that CRM is a marketing challenge and not at all an IT matter. This concept will be developed through the book, aiming to eliminate the confusion that we are just talking about software. While this is an introductory chapter, it is expected to provide an overview of the “Reason Why” and some background of the CRM.

For this reason the topics covered in this chapter are as follows:

• Introduction to the book
• About CRM
• Why so many people are not fully aware of what CRM is
• Introducing the concept of CRM
• The “Reason Why” of CRM
• Why CRMs tools are not all the same
• Our Idea of CRM
• How CRM became popular: a bit of storytelling
• The tool for Relationship Management
• Summary

Introduction to the Book

Choosing the appropriate software application to run Customer Relationship Management should be the outcome of an explicit organisational strategy, mainly about its purposes and how it should be deployed. The know-how to implement a CRM tool according to organisational strategy becomes critical to support the organisation’s goals and achieve its objectives. A well-implemented tool will help in executing the strategy for the best. Hence the capability to operate a decision about which tool, among the many available, should fit the organisation’s needs while the way to implement it to support the organisational goals should also be part of the management know-how. For this reason, this book is not only about the process and techniques for setting up a tool, but it also presents various implications of the CRM and specifically its strong tie with an organisation’s business strategy and the way it runs its marketing. Later in the book, we will see how to select software solutions and how they can be useful. In this chapter, we will start by analysing the logic of CRM and its connection with the business strategy.

As Paul Greenberg said, “I do not use a CRM for myself, but as long as your business grows, you can reach a point where you can’t even run your business without it.”^*

* Greenberg, P., The Godfather of CRM, SalesPoP, 2019.

About CRM (tool)

As you may already know, a CRM tool is just an application over databases. For that reason almost anyone can create a CRM, starting from scratch using any database (Db). The question is: “...would the resulting CRM be any useful?”^† Hence, we may ask what exactly makes a solution usable for CRM purposes? Any Db is just a data container. Dbs differentiate themselves regarding Data Definition Languages, Speed, and Security. But what makes it usable for any specific purpose is the piece of software that lies between the human interaction and the Db, more than just the Db itself. Probably tech developers would have a slightly different opinion on this, but no one will deny the importance of the User Interface to boost the human interaction with the machine as an important element of the value of any digital solutions.

† Stephens, R., Beginning Database Design Solution, Wiley, 2009.

Thus, if you would like to develop a CRM over a simple Db you can surely do it, then you’d better be able to define functions and features in advance and set up the development of a proper software to manage the interface for users. This is why just using a spreadsheet as a CRM is not efficient, as we all now know.^‡

‡ Koleda, E., Why You Shouldn’t Use a Google Sheet as a Database, Medium, 2019.

What Makes CRM (tool) Useful

What really makes a CRM (tool) useful is the ability to track each interaction, task and communication with the contact persons bearing a clear and strong relationship to Opportunities and Companies related to that person. The CRM should capture every interaction easily, but on the other hand, users should be enabled to find out information within the whole track of the “relationship” with a person/organisation even more easily.

Again, the CRM tool should rely upon the concept of empowering our organisation to easily collect data around and about the people who interact with us as well as any interaction or opportunity that arises at any time with those people. And just the data that are truly useful for business purposes, not just any available or collectible data, should be uploaded in the tool. Collecting adequate data on a person’s interests and needs enables the organisation that owns the CRM to use that data to shape information that can be useful to that person, to inform them about what matters to them and (ultimately) offer what he or she expects; doing this we create value to the organisation by pursuing its purposes. Finally, data can be truly powerful and useful when aggregated; the organisation then becomes capable of shaping information across market trends and business forecasts.

Why So Many People Are Not Fully Aware of What CRM Is

What remains unclear to many is what exactly a CRM is. Notwithstanding the growing importance of the tool and its rising popularity, if you ask for a definition of CRM and what it is useful for, rarely you will get a proper answer from managers or entrepreneurs.

Some random definitions of CRM you can come across could be:

“CRM ... refers to software that helps companies track interactions with their future and current customers.”

A Beginner’s Guide to CRM

“CRM is a way to identify, acquire, and retain customers, a business’ greatest asset. Research has shown that companies that create satisfied, loyal customers have more repeat business, lower customer-acquisition costs, and stronger brand value, all of which translates into better financial performance.”

Siebel Systems

“CRM is the process of managing interactions with existing as well as past and potential customers.”

Insights Success

“CRM is the business strategy that aims to understand, anticipate, manage and personalize the needs of an organisation’s current and potential customers”

PWC Consulting

“CRM is a strategy that companies use to manage interactions with customers and potential customers. CRM helps organisations streamline processes, build customer relationships, increase sales, improve customer service, and increase profitability.

When people talk about CRM, they are usually referring to a CRM system, a tool that is used for contact management, sales management, productivity, and more. The goal of a CRM system is simple: Improve business relationships.”

Salesforce

“CRM means a combination of business strategies, software and processes that help build long-lasting relationships between companies and their customers”

Creatio

“CRM (is) an enterprisewide business strategy designed to optimize profitability, revenue and customer satisfaction by organising the enterprise around customer segments, fostering customer-satisfying behaviors and linking processes from customers through suppliers.”

Gartner Group

“CRM is all about understanding customers within the marketplace in order to meet and exceed their expectations, which will help achieve organisational objectives.”^*

* Bulton, R., Creating and Managing a CRM Platform for Your Organisation, Routledge, 2019.

Richard Bulton

Introducing the Concept of CRM

We can see how the idea of CRM as a system, just a digital tool, is largely in the minority amid those definitions. The most salient word among them is “strategy.” It suggests that CRM is first and foremost a logic, an approach, a strategic view of the business and not just a software tool. And it makes sense as building relationships with customers is the essence of any business, the kernel of the recent developments in marketing. When the idea of marketing was conceptualised, the purpose was to crystallise a methodology around the interaction of businesses with markets. In its earliest version, Pete Borden’s Marketing Mix that included the famous 4Ps,^* showed his mainstream idea to leverage on policies to impact on markets and ultimately on each customer. Only 20 years later the American marketing scholars Leonard Berry and Barbara Jackson added a fresh theory about Relationship Marketing: While Berry argued that Relationship Marketing is a marketing activity to “obtain, maintain and promote effective relationships with customers,”^† Jackson improved the concept of Relationship Marketing as a fresh new approach for the marketing industry. Her contribution focuses on the essence of Relationship Marketing which, according to her, is to “attract, establish and maintain a close relationship with enterprise customers.”^‡

* Borden, N. H., “The Concept of the Marketing Mix,” Journal of Advertising Research, 1964. † Berry, L., Relationship Marketing. American Marketing Association, 1983. ‡ Jackson, B. B., Winning and Keeping Industrial Customers, Lexington Books, 1985.

“The aspect of long-term relationships with customers and other stakeholder groups has been neglected in mainstream marketing management literature, as pointed out by several scholars (Christopher et al., 1991; Dwyer et al., 1987; Ford, 1990; Grönroos, 1994b; Gummesson, 199...