A Primer in CRM

Customer relationship management is the key to keeping your network up to date and your employees on the ball

Smart salespeople leverage their strengths and get help with their weaknesses. For many of us, organization isn't one of our strong points. Keeping track of which customers to follow up with when, how, and, most importantly, why usually requires some support. Hence, a few decades ago a new industry was born -- CRM, customer relationship management.

I don't want to give away my age, but I was considered a real leader on my sales team way back in the mid-1980s, when I kept track of my prospects on a "laptop" computer from Radio Shack that ran on a fistful of C batteries. My fellow sales reps and customers were amazed that I could carry a simple database of my customers' information around and update it at will. I don't recall what size CPU it had but I bet my cell-phone could out-power it now.

When it comes to CRM, to steal a line from an old advertisement, "We've come a long way, baby." Now there's a wide variety of CRM solutions, something to fit every size and situation


  Shopping for CRM is like shopping for a car. First you need to think through your needs. Otherwise it's like not knowing if you want to buy a Silverado or a Corvette. Some companies use CRM primarily to make their customers happier and increase repeat sales. Some use it to increase initial sales. Some use it to decrease their overall cost of doing business.

Once you know your needs, research those CRM solutions that meet them. Then pick one and get started. Don't fall into "paralysis by analysis." Like any technical product, you'll learn as you go, but you'll never learn if you never get started.

CRM is available on three platforms: individual- , server- or Internet-based. Of course, there are combinations of these too. If you're a lone ranger, perhaps the sole employee of your company, an individual-based CRM system that sits on your computer or laptop might be best. This type of solution would give you maximum privacy and control.


  An individual CRM system is a database of what you know. Once you've typed in your customers' kids' names and birthdates or their favorite sports teams, you'll always know this information. However, when multiple people touch one CRM database, something magical starts to happen. It starts to collect data on your customers from various sources and now it collectively "knows" more than any one person could.

If you want several salespeople to see the same database of customers, you could look at a server-level solution. With this option, you keep one CRM on your corporate computer and several employees can enter and modify the records. This would give your company privacy and control.

One concern with these first two platforms is they both require increased technical support, including installing, customizing, and supporting all the hardware and software you need to buy.


  If that sounds like too much work, an Internet-based solution is a worthwhile consideration. This is especially great if your employees aren't co-located. You'll experience increased flexibility and value but, on the other hand, decreased privacy. There's also always the risk that the computers of the master database could go down and people in your CRM network wouldn't be able to get to or use their data.

I've used this type of CRM because I could add independent contractors anywhere in the world, and we shared contacts and information. When they left, I just eliminated their access codes and carried on. Since the Internet is everywhere, when I travel I can leave my computer at home and log on at computers around the world to pull up some contact information or add to my database.

There's a second consideration in choosing a CRM, and that's the desired level of complexity. Some sales organizations want to record every last detail about their customers. This benefits management because they can see exactly what's been going on with a customer. This also helps when sales reps leave because detailed records exist for whoever takes over the account.


  Management should be careful here. Having lots of boxes to type in sounds good, but since most sales reps aren't detail-oriented, this can create friction between sales reps and their managers. If you're like me, you got into sales because you're a people-person, and every minute spent typing in notes about what a customer said is a minute you could have spent making another sales call.

Also, customer information can become stale and worthless. A bigger CRM database isn't necessarily better. Kit Wong may have been the VP of Finance at Company ABC 10 years ago, but if his record isn't occasionally refreshed, this bit of data becomes useless.

The most simplistic CRM solution I found is software from Post-It Notes called Digital Notes. It literally organizes digital sticky notes. What a contradiction!


  A third consideration is how far you want your CRM system to extend. Some CRM systems only touch the sales team. On the other end of the spectrum, some solutions reach into HR, finance, marketing, and even manufacturing.

The biggest problem with all of CRM isn't in choosing which implementation to buy, it's the risk of taking your eye off the ball -- your customers. The last thing they want to hear from you is, "I'm sorry I didn't do what I promised but our CRM was down."

Choosing and using the right CRM for your situation is a necessary but difficult task. There's even a magazine dedicated to the field, CRM Magazine. However you manage your customer relationships, find a system that helps you organize them, and your sales will surely soar. Happy selling!

Before it's here, it's on the Bloomberg Terminal.