White Paper

Introduction to Customer
Relationship Management
Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Expectations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Transition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

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Copyright 2013 Ziff Davis B2B. All rights reserved.
Ziff Davis|White Paper| Introduction to Customer Relationship Management

Introduction
The time when a company decides to move to CRM (Customer Relationship Management)
tools marks their progress to professionalism and profit in multiple ways. This Introduction to
Customer Relationship Management provides guidelines for companies contemplating this
critical step in their development.

Before computers, salespeople used a combination of manual tools to track prospects and
their multiple contacts with those prospects needed to turn them into customers. These tools
included yellow tablets, stacks of business cards with notes written on the back all bound
together by rubber bands, and Rolodex cards. Haphazard methods like these guaranteed
haphazard results, which is why many vendors leapt on the new PC as a means to organize the
sales process.

Behold, the spreadsheet appeared, and provided a new way to organize random scraps of
data. Thats the reason, 30 years later, far too many salespeople still use the spreadsheet as a
replacement for yellow tablets, business cards, and a Rolodex. They may have moved chaos to
a computer, but they have not accepted the philosophy of CRM as a way to drastically improve
their sales and customer relationships.

SFA (Sales Force Automation) software appeared soon after the PC, and helped organize
many salespeople. But CRM is much more than just software: CRM done right is a new
philosophy of handling customers throughout their entire life cycle from first contact to first
order through multiple orders. Most salespeople looked to the PC not as a tool for CRM but as
an easier way to handle scraps of paper, yellow tablets, and business cards.

While SFA was a decent first step for many companies, those software applications focuses
on the sales process, not the customer relationship process. Sales gets the most attention,
but managing the customer over the lifetime of the relationship cycle provides a real revenue
stream and needs many more tools than SFA software provides.

The Decision
Companies planning to grow and succeed realize customers are the lifeblood of their business
in a more profound way than when they started, and properly managing customers becomes
the key to long term growth. They begin to notice certain signs that indicate a step up to CRM
is necessary in order to improve the value of them to their customers, and of their customers to
them. These signs include the following, and more: Lack of insight into the sales process:
Lack of insight into the sales process
Haphazard reporting from sales people
No clear sales funnel process to convert contacts into prospects then customers
Inability to track prospects across social media

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

No consistency of customer engagement materials across salespeople

Difficult to get a grasp on the total prospect pool across salespeople
Salespeople competing for the same company through different contacts
Losing prospect information when a salesperson leaves the company

Notice these signs indicate a lack of something important: useful reporting, insight into the
sales process, usable information about future sales in the pipeline, and the like. The best way
to predict the future is to analyze the past, but in sales, if you have no prospect data to analyze,
youre still just guessing.

The three foundations of a good CRM system are people, process, and technology. Too
many focus on just the technology and spend months analyzing minute details of competing
software applications while their sales drift aimlessly. Smarter companies analyze the sales
processes they have now, make note of where improvements are needed, and start building
new processes with employee training as well as the software application. Technology is only
one of the three successful lets of a CRM system.

Sales managers start lobbying for a CRM system before anyone else in the company
because they understand how critical the information they are missing is to future growth. But
companies where the sales manager chooses and implements a system on their own have
more program failures and waste than companies who gather a consensus between sales,
marketing, IT, and the back office functions before moving forward. Everyone, from the CEO
down to the newest shipping clerk must be understand how they fit into the new customer
relationship management process-- whether they use the actual software or not.

The decision to invest in CRM software is important. The decision to invest in a CRM initiative
throughout the entire company is critical to continued growth and success.

The Expectations

Every major initiative like a CRM project creates wildly variable expectations among
employees. Managing those expectations often becomes more difficult than managing the
software installation.

Take time to define the expectations each department has of the new CRM process, make
sure they align with other departments and the capabilities of the CRM software involved, and
make sure those who arent behind the new project dont create unmanageable expectations.
Keep a close watch on the CRM software vendor as well, as their enthusiasm for their product
may outrun the abilities of your particular installation.

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

Heres a short list of some of the many things a Customer Relationship Management system
will do for your company:
Contact acquisition processing
Conversion from contact to customer
Establish the customer relationship
Retain the customer longer and more profitably
Establish the value of each customer
Add cross-sell and upsell opportunities
Improve close rates
Reduce sales and marketing costs
Improve customer service

One way to solidify the expectations of all the CRM stakeholders is to carefully examine and
record the sales management processes that are place now. This may be difficult if there are
many manual parts used by individual salespeople, often in direct defiance of orders from
management. Establish a non-judgemental team to document all sales processes as they are,
not as how management thinks they are. Every salesperson will need to be involved, but their
information can be gathered anonymously. In fact, the salespeople will be more forthcoming if
individual names are specifically excluded from the report. If sales management is smart, theyll
already know the preferences of the salespeople, which is often a major reason for the push to
modernize with a CRM system.

Once all major steps of all major salespersons are gathered and averaged to get a clearer view
of your current processes, mark each against the three main stakeholders in the new CRM
system: people, processes, and technology. A few of the expectations may be applied like the
following:

People
Training
New collaborative processes

Processes
Workflow changes
Integration with social media

Technology
CRM software

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

Apps and shortcuts for mobile user access to CRM

Each department will have some preparation for the new CRM system. One executive
should be designated the CRM Pilot (or some other name that works for your company, like
Champion or Advocate) and perform project management duties to coordinate all departments
in all things CRM.

Planning the contents of your CRM database and document management helps crystalize
the expectations of all parties. The typical sales information, meaning prospects and their
company names, along with all pertinent contact information, will always be in the CRM
database. But do you expect your CRM to export shipping names and addresses, or connect
with the customer delivery information inside your accounting software? Some software pulls
data from the CRM to the accounting software, some pushes from accounting to the CRM,
and some need a separate database both programs can access easily.

Other information usually handled by the CRM:

Account history
Past sales
Invoices
Quotes
Letters to the customer
Emails to and from the customer
Marketing materials
Notes on customer conversations

Notice several of these information sources exist in your company already, such as quotes,
letters to customers, marketing materials, and emails. Integrating those data sources within
your upcoming CRM system takes planning, and perhaps some retrofitting if your company is
larger.

Details like these are why expectations must be codified before the project starts. Finding and
managing these details will take at least two passes before the selection of the CRM software
for your company. Even then, be prepared for this expectation on the part of some employees:
We were sure you knew we needed this feature and didnt have to TELL you. Yes, they will
ignore multiple emails, announcements made during meetings, and direct questions when they
lay some new feature demands on your desk the day after the software is installed.

Expect a new focus on customer-facing software, best practices, and communications. With
the proper preparation, customers should be the target of all these processes:

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

Marketing
Inside sales
Outside sales
Order processing
Management
Customer service
Sales support

The largest expectation, and the one that will benefit your company the most, is the total
overview of every customer engagement, every sales process detail, notes from every
customer contact, and reports of which potentials are likely to become prospects and then
become customers. Every department in your company will rely on this information, whether by
using the CRM software directly or by receiving information from CRM reports.

The Transition
Heres the real-world segue from Expectations to the Transition to a CRM system: Expect a
bumpy ride. The process rides a roller coaster: its terrible, its getting better, its worse than we
ever thought, were finally home safe.

The sales department, the group most affected by the new CRM system, suffers the most.
Those who have used other CRM systems will complain because the system at your company
is different than what they know. Those new to automated sales management software will
complain because they must change work habits developed over years or decades, and
change can be challenging.

Salespeople often claim sales is an art, not a science. Treating sales like a science puts
too much emphasis on contact metrics and reporting, and not enough on building personal
relationships and trust. Objectively, this rings true because the relationship between a
salesperson and the prospect triggers the transition of that prospect to a customer.

However, salespeople forget that an automated sales process maximizes the time spent
finding prospects and moving them into the customer category. Sales artists rely too much
on personality and not enough on the process, and sales scientists go too far the other way.
The right CRM system for your company will split the difference and make sure processes are
followed to enable the sales artists to develop new customers while providing the structure
necessary to keep prospects engaged until they are ready to move toward customer status.

CRM software tracks every interaction with prospects and customers, and salespeople arent
used to that level of transparency in their work. Typical concerns of salespeople include:
Others can see my prospects

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

Others can piggyback on my work and take credit

CRM changes me from a sales professional into a data entry clerk

Management must be sensitive to these issues and others during the transition. Stress that
the goal of the CRM system is not to take away the sales job, but to support them and enable
them to reach more and more customers.

Sales managers often have a mixed reaction to CRM systems. On one hand, they appreciate
the fountain of information about each and every salesperson and their activities. On the other
hand, they suddenly realize other company executives can drill down into the sales process as
well, meaning their own work processes are more transparent than ever.

Just as salespeople can be overwhelmed by increased oversight by sales managers, sales

management can be overwhelmed by other executives trying to micro-manage the newly-
transparent sales process. Many sales departments face animosity from other departments
(why do they get to take customers to lunch when Im stuck in the office?) and a CRM
system lays bare the sales process. Smart management recognizes this potential point of
conflict and prepares guidelines to keep other departments focused on their own work rather
than jumping into the business of the sales department.

Expect bumps when populating the new CRM with all the information about prospects and
customers. Many companies force the salespeople to type in all the information, but that
slows ongoing sales and makes the salespeople resent the new system. Get help from other
departments, interns, or part-time typists for data entry.

Transferring existing customer information to the CRM system will take at least two passes.
Even if your accounting system spits out all data perfectly the first time, once into the CRM
software youll immediately find you should have imported the information slightly differently.
Take two will go better, so budget your time accordingly.

Finally, training the salespeople and sales management on the CRM system will speed the
transition enormously. Train salespeople and sales management separately. If possible, offer
one-on-one training for a time after the installation is finished. The more users dig into the
CRM system, the more questions they will have. Follow up training sessions will provide a huge
boost to sales productivity.

The Results
Finally, all customer information will be in one place, including social media interactions and
call-center support (depending on the advanced features of your particular CRM). You will
be able to see the entire sales acquisition process from initial contact through prospect to
customer to long-term customer. That is the best result of the CRM process.

While many focus on CRM for customer acquisition, the real value over time is in customer

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Ziff Davis|White Paper| Introduction to Customer Relationship Management

retention. This is why we call it Customer Relationship Management rather than Customer
Location and Acquisition.

Numbers vary, of course, but a good rule of thumb is that a current customer is worth five
times more than a new customer. Customer acquisition is important, but customer retention is
profitable far and beyond the first sale. The cost of acquiring customers is high, but retention
costs are low, even when figuring in the cost of the CRM to help you maintain the customer
connection.

Profitable companies retain customers and become more important as a primary supplier of
goods or service every quarter. The way to find and connect to customers for the long term?
Use Customer Relationship Management software and supporting processes within your
company to bind your customers to you for their increasing satisfaction and your
increasing profits.

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