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Defining CRM

Defining CRM? CRM or Customer Relationship Management stands for processes, tools and practices for managing Customer Relationships. It covers entire Journey of Customer with your organisation. Right from identifying the customer to Marketing to Sales and then post Sales Service.

Generally when we speak of CRM, we refer to some software tool. But even before the advent of software and IT, there always was a CRM system. How could you imagine a business without Customers and when you have Customers you obviously have systems to manage relationship with them. So CRM has been always around, right from the time when Man first did some trade (or even a barter).

Who needs CRM ? well anyone who has customers will need a CRM. However higher transaction value and longer Sales cycle require CRM.

One of the biggest myth about CRM is that its a reporting or data entry tool. In fact CRM is a decision making tool. It should help Sales Managers and Executives to take important decision like whom to contact, when to contact, How they can utilise their time, which customers to target and which opportunities to work on.

However most companies fail to achieve this result, they just focus on how to do data entry and get reporting (how to enter data and how to extract data). Doing data entry and getting reports is useful. But CRM can be utilised to do something much more useful.

CRM is supposed to be a decision making system. However it is mostly misused as data entry and reporting tool.

Defining CRM based on Type of use

Marketing CRM:

Generate and capture Leads (or Enquiries). There can be numerous ways leads can be generated. But unless all the leads and its relevant information is reliably captured in to system, it gets wasted. Lead capture is done Manually or automatically. Nowadays most CRM software are capable of multichannel information capture.

A good CRM is also able to categorise and classify existing customers for cross selling and up selling. Your existing Customer base is the ideal source of lead generation. Remember, selling to exiting customer is much easier than selling to a unknown person.

MythBuster: Marketing CRM is not equal to Mass Emailing. although most of CRM solutions are able to integrate CRM data with Email Automation tools.

Sales CRM:

Once the Enquiries are generated they need to be converted to Sales. Managing Sales Stages and Funnel Management is the main challenge to be handled. CRM will make sure that you don’t miss your followups. CRM will also help to contact customer through various channels like Call, SMS, Email. Most of the tasks can also be automated using various work-flows and automations.

Sales CRM helps in executing the Sales process and also finding the shortfalls. This makes life of Sales Manager extremely easy.

Fortune is in Followup, CRM helps you with trigger for next action for all the enquiries.

Service CRM:

Handling after Sales Service in CRM (AKA as Ticketing System) becomes very important part of any CRM Solution. It covers right from ticket registration, followups, SLA enforcement, Escalations, Automated notifications to the customers etc. Service CRM may be integrated with Website or Customer service portal enabling customers to create and track tickets from their browser or mobile.

Single biggest advantage of Service CRM is that CRM will blow the whistle before customer blows it. You know in advance if customer is going to be annoyed.

Call Centre CRM:

Call (or Contact) Centres become very integral part of Sales / Service team. Companies use Call centre teams to generate leads or nurture the leads or even handle customer services. Call Centre CRM  generally are with multi-channel integration of Email, Calls, SMS and even Social media.

Call Centre CRM generally includes telephony integration as that becomes integral part of Call Centre operations.

Deploying only telephony Server will not help you to serve the customers, You need a Call centre CRM to manage the process correctly. CRM + Telephony is the answer.

Defining CRM based on Deployment Options

Any modern CRM generally CRM has more than few components. (1) Main Application which does all the computing/logic part (2) The actual Database Engine (3) Mobile App (4) API for Integration (5) Reporting Engine. Its not necessary that it will have these components as distinct applications. Few of them may be bundled in one also. Eg: Sugar CRM does not have a separate reporting Engine its bundled along with main CRM software.

I will be writing a complete article on deployment options and other parameters like Cost, Security, performance etc. However generally speaking any Modern CRM can be deployed in multiple ways:

Hosted SAAS Model:

This is also known as online model. Here you CRM is given as a service. Just make the subscription payment and it gets started. No need to worry about server type, scaling, space or anything else. In fact the entire infrastructure is provided by the CRM provider. Example:

Here, generally the commercial model is that of a monthly subscription like per user / per month basis.

One of the most popular models as of now, because there is almost no capital investment and it can be instantly scalable.

On Premise Model:

Here the CRM is installed in the premises of Customer. Customer has to incur all the expenditure in Hardware, Networking, Operating Systems Database and everything related to IT Infrastructure. This generally looks to be cost effective but it is not. This model is only suitable for a very large Enterprises.

On premise does not necessarily mean that the cost of CRM is one time, it can still be subscription based. Example: SugarCRM provides On premise deployment, but the charges are per user per month basis only.

Smaller Enterprises should never use this. However they are mostly the ones who demand for onsite deployment.

What is not CRM

One of the most under-utilised software platform might be CRM. There are more than few myths about CRM. One I have already explained in the beginning of the article. Here are following points – which can be anything but CRM.

Unfortunately many times CTO and CFO take decision for CRM, hence they tend to focus on wrong sets of functionality. CTO thinks that Technology can solve every problem. CFO thinks that if he has financial data everything can be controlled. Both of them are wrong, drastically wrong.

  • CRM is supposed to manage relationships and not inventory. Many companies try to include inventory more than opportunities. This is absolutely wrong.
  • CRM is best utilised as a decision making tool, however it is mostly utilised as data entry and reporting tool. Its complete wastage of entire concept.
  • CRM should be enabler. It should not be looked up on a mechanism to track and control. This is one of the main reason why CRM fails. People get thing entirely wrong.
  • CRM is different from ERP, not only in respect of  functionality but also in terms of psychology and philosophy of the entire platform. Works manager and CFO is more concerned about the outcomes which ERP provides. Where as CMO and CSO would be more concerned with what CRM can provide. However many times since the decision is done by CFO and CTO hence things go wrong.
  • CRM is not a software, its a culture. Its a way of life of a Sales Manager and Sales Executive.
  • CRM is not a HR tool, it cannot replace faulty HR policies or practices. Many times there are actual HR problems with Sales team but companies try to resolve them using CRM, which almost every time fails.
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7 thoughts on “Defining CRM

  1. Real good piece of article ti be read could of times and understood by those who are in search of CRM. Even CRM users should read this to inopportune their understanding of CrM. Probably their perspective will change.

  2. Good work Shimona . Its in lucid language making it simpler for understanding even for NON-IT. Good explanation without using technical jargon… keep it up.

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