The prerequisite definition is Customer Relationship Management, in reality it means changing the focus of your business to become customer centric. Funny thing about that statement is most organizations believe they are already customer centric. Yet a great percentage of businesses both large and small have not committed to building long term relationships with their customers.
After being in the CRM industry for ten years, here is my definition: CRM is about engineering your company, it business processes, departments, workflows, customer service, and marketing, products and business intelligence for the benefit of increasing customer loyalty, and longevity . A properly implemented system can offer a ROI of up to over 900% or more in a two to three year period.
Let me say that CRM is not a box of software, some computers and a telephone. It is not a task you hand to your IT / MIS department and say lets do this !. CRM requires a knowledgeable consultant to help design, implement, customize, the CRM tools, and help train your staff on how to use the system.
An immediate analogy is the CRM consultant is much like the architect of home. It is spending time with the clients, learning the lifestyle of the customer, how the home will function, what amenities, décor and the esthetics, and of course budget of their clients. It is only then the architect will develop a blueprint, and maybe a model of the house.
You can try to build your house without a sound blueprint, and you may even end up with something that sort of looks like a house, but oops what happened to the second bathroom? What happened to the garage? Well you get the idea. It certainly would not be considered a good house.
I got my start in CRM at an early age. I worked for a finance company that made small loans to mostly blue collar families in Indiana. Our particular office made 6-8 loans each and every day. Most of our customers could easily qualify for such small amounts (usually $ 1000 to $ 3,000) with their local bank or credit union. The interest rates we charged were as high as 36%. Yet our office grew, and was extremely profitable due to our customers came back time after time. Why you ask; Because, we knew our customers on a very personal level. We knew their families, what they did for a living, we offered loans with custom payment schedules, and we were there when our customers needed us. We had relationships with our customers.
As I went into business on my own, I wanted to use computer technology that would not only help grow my business with new clients, but also generate referrals, and allow us to up sell, cross sell, and earn repeat business. It would take a lot of time and investment, trial and error until I figured out a winning combination. At the time in 1989 you just could not go out and purchase a CRM package. The idea did not even exist then. I began with a copy of a database called Corner Stone written for MS DOS.
At the time it was state of the art, and a huge investment. Other associates of mine asked why not use a rolodex? What am I going to do with that data anyway? It was if just building a database of my customers was an foreign concept to them. I mean computers were just beginning to show up in offices to run Visi Calc (a spreadsheet application), and WordStar (a word processor).
I grow my mortgage brokerage and historically "ACT!" came into the market. We installed it and used it with varying successes. We then moved on to a product called GoldMine, which was a much more robust system. It was then that I decided that I wanted to get into the CRM business and become GoldMine consultant.
That decision has led me down a path of spending a great deal of time learning what CRM is and what it is not. I have had the opportunity to work with some of the smartest sales and marketing experts in the world and within a short period of time to become one of GoldMine's most successful resellers in the western states.
I left the world of GoldMine in 2001, for another business venture, but kept up with the changes in the industry. When Microsoft entered the business with their CRM tools I was impressed. Microsoft CRM in my opinion offers that toolset that allows a CRM consultant to offer a easy to use, extensible, application to help our clients realize a successful CRM project.