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University of Massachusetts Amherst

Family Business Center

CRM: A Needed Boost to Productivity and Profit

by Shel Horowitz

"If you remember you had a conversation with Charlie and you don't remember his last name, how do you retrieve that?" Will Ryan, of System Sales Support, believes the answer is using Customer Relationship Management (CRM) software.

It's ironic, he says. Sales people "create a change in the recipient company. Yet the most resistant profession to change is sales; people are very attached to their Franklin Planners and their Day Timers.

"Most secretaries are gone; the gatekeeper is voicemail. But when people call back, it might be several days later. I have no idea" what the context is, or even what company the caller is from. "I say, 'I really appreciate that you called'" (stalling for a moment while he brings up the computer record of all previous interactions -- something that doesn't work with a paper system).

Ryan sees other advantages to CRM, too. "Remember carbon paper? Today, you've got information that people in your network need to have. You're not sure about a lot of them, but you send it to everybody. Is it all that useful? You're changing the paradigm from supply-push to demand-pull. I meet with customers and prospects, I document all the interactions. We don't do sales trip reports any longer because it's all in the system. If you have a need to know, you go get it. It decreases the information overwhelm.

"Anybody who talks with a prospect or a customer is in sales, even if you don't have that title. You represent your company to your customer.

"In traditional sales, I won't pay any attention if there's not going to be a sale for 90 days. So [the client] finds a new supplier, because you haven't talked to him.

"CRM is the fastest-growing class of software in American business. You build a triage: very hot, moderately hot, and those that haven't bought for a long time. This software will send love letters to your Class Three, so you're in the clients' minds when they're ready to buy.

"When I started years ago, with IBM, the sales trainers used battlefield metaphors. Fortunately, we changed the game. We're in relationship with our customers. We are managing the relationships and sharing that in our org so we sound like one voice to our customers. The seamless connection is high-quality service.

A good CRM system stores all information about customers and contacts in a single location; integrates communication -- whether by postal mail, email, phone, fax -- and makes it easy to collaborate and share information within your own organization. And the return on investment can be astounding; one of Ryan's slides claims:

  • 52% got 51 to 500% ROI
  • 30% got over 500% ROI
  • 58% got payback in a year or less
  • 35% got it in one to three years

Comparing carrots and sticks, Ryan says sticks generally don't work. If you try to mandate a CRM system, it won't happen. Instead, show your sales force how they benefit: higher commissions, better relationships with customers, to support their role as a bridge between their own and their customers' companies.

It's also important to "pick a system that's compatible with your infrastructure. If you have strong systems people, set up in-house. If your systems people are weak, get a hosted solution. If you do not look at your process, and you put in one of these elegant tools, you'll make a bad process faster. Start with functions that provide leverage right now, add functions later as needed, based on user experience. It's a very different paradigm. If you're not ready, then don't start.

"All the vendors will tell you they're the best. We say, come in and show us a customized demonstration of your system running in my business. Interview them, get feedback, and pick the one you're most comfortable with.

"Pick the sparkplugs [within your company] who are driving the change.

Let them beat it with a stick, try to break it."
Finally, CRM may have benefits well outside the sales cycle, in such applications as shop floor loading predictions, trend spotting, metrics -- and information sharing among service, sales and marketing. "The worst thing that can happen is the 'surprise sales call,' when the service person visits and everything is a mess, and the next day the sales person walks in [confidently expecting an easy sale, and gets dumped on]. With CRM, the sales person looks at the records, says, ‘ Oh my God,’ and comes into the meeting saying, ‘we saw what happened yesterday and here's what we're doing about it.

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