by Andrew Freiburghouse
There comes a time in every CRM software implementation when the question arises: is this stuff working? Here are three measuring sticks to answer that question.
CRM software sales is a field that possesses some of the best sales people in the world. Commissions can be lucrative, the need is there in the marketplace, and the future looks bright. However, the success of a CRM salesperson or the overall growth of the CRM industry should never be taken as an indication that a particular CRM application at a particular company is actually working and worthwhile.
In order to verify that CRM is working in a specific case, here are three good tests.
1. The Sales Force Actually Uses the CRM Application
CRM software, like any software, means that employees should learn new systems. It's natural that change may be resisted by some employees who are used to doing things their own way, the old way, or some combination thereof. Without a doubt, management must sometimes push CRM until it can roll of its own momentum.
Nevertheless, there comes a time in many CRM software implementations where it's obvious that the sales force does not like and is not using the CRM software. Notice this lack of use. And take it as a sign. A Gartner Group study found that 42 percent of CRM licenses purchased were not even installed. As CRM systems have developed, that number has likely declined. Still, CRM use lags behind CRM purchasing.
2. Customer Relationships Are Getting Better
It's called "Customer Relationship Management" software for a reason, right? But in many cases, that is wrong. On the contrary, some CRM applications--or, rather, their misuse--may actually damage customer relationships.
For example, a CRM application that is heavy on the contact may offend customers who want a less constant, more transactional relationship. For such a customer, the repeated sending of email updates, newsletters, and product offerings can be an unwelcome annoyance.
It is a shame when a CRM system destroys relationships it was meant to enhance.
3. Sales Being Generated? It's a Yes or No Question
There is something to be said for improving sales processes and making a sales force more efficient. But these things to be said are not as loud as the thing said by more sales. The correlation between a new CRM application and more sales is not one-to-one, but a connection should be visible.
Often, a CRM application that is working may generate more sales from both existing customers and as a result of more attention being paid to customers that are not yet ready to buy but are thinking about it. The glory of a good CRM system is the ability to monitor and interact with all customers in a meaningful way, whether they're longtime accounts or some random guy who came from the Web site.
Specific CRM tools, such as power dialers, seek to exploit the mass marketing function of CRM. Other CRM tools, such as the emerging social networking aspects of CRM, are much more focused on maintaining and deepening existing relationships.
All CRM that is working, though, works to produce more sales.
Andrew Freiburghouse is a writer and a businessman. As a partner at Los Angeles tax preparation firm Pronto Income Tax of California, Inc., Andrew has advised thousands of clients on a variety of financial matters.