What is a CRM system?
A CRM system is a piece of software which provides a single secure home for all customer-related data; from prospects, leads & opportunities through to product delivery and customer service records. It then efficiently manipulates this data to provide users with an extraordinary array of capabilities such as managing sales funnels & marketing campaigns; automating tasks; producing sales orders, contracts and quotations; constructing real-time business intelligence; integrating communications such as telephone, email and social media; managing customer enquiries & complaints and a lot more.
The rapid increase in computer speed and storage capability over the last twenty years at prices small to medium-sized businesses can afford allowed CRM developers to expand functionality dramatically. The key features of a CRM system today are as wide as they are deep. CRM systems are now sophisticated and highly efficient business engines which provide seamless customer interaction, drive sales and business automation to maximise productivity.
That’s all very interesting but you may well ask “What can CRM do for my business?”. Today, we are swamped with enticing software which seems to be able to solve all our business problems quickly. Digging deep at an early stage to understand how this functionality may apply to your business is critical.
If you’re interested, here’s a little bit of history…
The notion of managing customer relationships has been with us for as long as customers have existed. Back in the late 19th century, the industrial revolution had given rise to a need to formalise the way businesses organised and nurtured a growing list of customers. During the first half of the 20th century, companies relied on physical filing systems, diaries and of course the ubiquitous Rolodex, a cylindrical card system that all self-respecting salesmen and managers would have on their desk to give easy access to the details of hundreds and perhaps thousands of nurtured customers.
These methods were slow, and data was distributed so proved very inefficient. Furthermore, they were reactive systems. Information was inert. It would happily just sit there until an alert secretary, personal assistant or more operationally minded manager proactively went searching for it to achieve something positive as an outcome. These were the first attempts at Contact Management and look unbelievably antiquated by today’s standards.
The term Contact Management gained traction in the 1970s as mainframe computers were able to start collecting and analysing large batches of customer data. When the first spreadsheet software became commercially available in 1979 (VisiCalc by Apple for the record), companies were able to take this analysis to a new level, and the concept of database marketing emerged.
Now increasing volumes of data could be input efficiently but more importantly, that data could be manipulated to become really useful. Customers could be segmented by geographical, demographical or cultural groupings, and they could then receive targeted communications, promotions, applications, surveys etc.
By the early nineties, database software had become part of the business lexicon, and it was now possible for small to medium enterprises to look further than these early aspirations of Contact Management. The customer journey was now tracked from first cold contact, through a warm lead, an even warmer opportunity to ultimately a first sale to a new customer. For a period, this more ambitious process was known as Sales Force Automation, but the rapidly increasing functionality of such systems meant that a more holistic term was needed.
Customer Relationship Management had arrived.