Why CRM is more than a database

4 minute read

Spending the last few days looking at CRM systems has only served to galvanise my opinion on the subject, namely data is great and even poor CRM is good. But when it comes to data, good is not good enough.

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Everybody knows that data is valuable. In fact your data is probably the most valuable asset your company has (sorry to disappoint you but it’s no longer you!), and these days everyone has some form of CRM. It’s reported that over 90% of companies with 11 or more employees use some form of CRM. Business news provider Forbes report that 64% of businesses strongly agree that data-driven marketing was critical to their success, with 47% agreeing that data-driven marketing produced tangible benefits for their business.

However the true value in our data lies not in the data itself but in our ability to extract insight from it. Applying this insight allows us to better understand our situation, make better business decisions and accurately forecast the outcome of these actions. Poor CRM can do some of this, but great CRM is a game changer.

CRM comes in all sizes from simple spreadsheets to enterprise level implementations. Of the top 5 CRM suppliers, Salesforce.com leads the market. The other major players are SAP, Oracle, Microsoft and Adobe. Below this the market comprises a long tail of hundreds of other CRM systems – SugarCRM, Zoho CRM, Insightly, and Pipedrive are just some of those you may have heard of. There’s also a significant market of open source and custom built CRM applications.

Each provider has their own slant on what CRM ‘is’ but a common theme is the progression of contact relationships with the view to increased sales growth and improved customer retention.

So stage 1 CRM of implementation is to use it as a glorified address book. Many people stop there and that’s good in itself. It keeps all of your contact data in one place and, if it’s integrated with other applications, it gives you the ability to share this information nicely across your organisation.

However, even simple CRM systems are much (much, much) more than name and address databases. Stage 2 is where the ‘relationship’ bit of C ’R’ M comes in – the ability to capture the very nature your ‘relationship’ with your customer, and of course how you can then influence this for the better. This involves adopting a CRM ‘state of mind’.

The second common theme when describing CRM is that it’s a business approach. It’s easy to think of CRM as a software application or even as a database but in practice it’s neither. CRM suppliers are keen to emphasise that CRM is actually a methodology which encompasses aspects of strategy, software implementation and user execution. The software applications and the data itself are almost by-products of a successful CRM approach.

Use the functionality of your CRM to collect the intelligence that will allow you to really understand your customers – their situation, their habits, their preferences, and then use this to plan and design your business (and as a marketer your communication) strategy. In my experience, stage 2 CRM is about 20% technology and 80% strategy.  To be successful it needs the confluence of 2 waves – a top down wave of evangelism and a bottom up wave of user adoption. The beauty is that it doesn’t need to be excessively complicated or expensive, These days there are lots of easy to use CRM systems that make it easy to capture and model your sales process and turn this into a powerful communication asset.