Desperately seeking CRM

Managing customer relationship management used to be pretty simple. Most shopkeepers knew their patrons personally. They lived in the same community, frequented the same places, and their children attended the same schools. Success or failure was dependent on the personal relationship between customer and shopkeeper.

Not anymore. Our global community makes it impossible to have a personal relationship with every customer. Face-to-face greetings are being replaced with automated messages. Leisure shopping excursions are being exchanged for the convenience of online buying. What does this mean for multichannel merchants?

You need to find meaningful information to develop marketing and service strategies for customers that live miles — or worlds — away. Customer relationship management software can help.

CRM systems help you identify and use information to better serve your customers. They move beyond recency, frequency, monetary and other traditional marketing tools to integrate disparate databases, identify buying trends, and optimize marketing campaigns and customer satisfaction.

Individual CRM systems vary as much as the companies they serve. Some include order management or integrate with existing software. Others are stand-alone systems that access information through data warehouses. All of them aim to improve your company’s ability to individually serve and connect with every customer. The right one will improve customer satisfaction, retention, and profitability. But how do you choose the right one?

It’s not easy. A few companies once dominated the market; today choices include add-ons to order management systems, software as a service (SaaS) for on-demand users, and complex enterprise systems. The players are changing, too. Vendors keep acquiring competitors and expanding some offerings while eliminating others. New CRM products and suppliers are entering the marketplace.

You need to develop a CRM deployment strategy to ensure they have the best program for their company and customers. Direct marketers have the home court advantage over e-commerce and bricks-and-mortar enterprises. Data management is already an essential part of their business as they have been capturing and analyzing customer information for decades. Since the foundation already exists, many direct marketing industry companies are opting to grow their own CRM system.

National Allergy Supply, an allergy, asthma, and sinus products supplier, has a CRM system that is not “grown, it is in the process of growing,” says marketing manager Steve Hill. With do-it-yourself CRM, the merchant is going to get exactly what it wants.

National Allergy’s data mining initially confirmed lifetime value and cycles, which had been previously estimated. As the process continued, the company found customer and product patterns it could use to reactivate dormant buyers. Its CRM software incorporates information from every area of the business and encourages participation from their entire staff. Hill says, “One of the benefits is that we are receiving home-grown ideas cooked up by the team on the frontline.”

For instance, National Allergy Supply’s customer service representatives now hand-personalize notes to customers during down time. This strategy keeps the CSRs busy during idle time, and the personal touch makes customers happy. The initial results are promising, Hill says. uses a CRM system from SAS. With CRM, “we can get in there, slice-and-dice, so we can really understand who the customers are. It allows us to gain insight from data,” says the merchant’s Its vice president of customer knowledge and marketing planning Aaron Cano.

Working with business analysts rather than programmers allows to be more analytical and learn in the process of building models. Cano noted that the company has had a quick turnaround where it could generate insight today and put it into practice tomorrow. The benefits include increased profitability and a 15% to 20% increase in response rates.


Selecting a CRM system is similar to buying a new car: It’s all about the fit. The road hugging sporty model that delights a young man will not meet the needs of a growing family. The CRM product that meets your company’s needs today may be outgrown tomorrow. There are four stages to selecting the best product or mix: objectives, analysis, selection, and evaluation.

Always start the selection process with your objectives. If your analysis and integration is sophisticated, you may simply need to upgrade your existing resources. If your data is disorganized or managed with an obsolete legacy system, you may need a complete overhaul. The key is to know what you want to accomplish and how you will measure the results before your start shopping for a solution.

The analysis stage is when you determine exactly what is missing from your data analysis and customer service tool belt. Can you easily access raw data so you can verify the reporting? Or are you dependent on canned reports preprogrammed within your system? What do you need to change about how you touch your customers? How well can you track results? Are you fully using your existing tools?

There are four types of CRM software products: On-demand (SaaS), niche (specialized for unique challenges), enterprise packages that can cover every aspect of the business from marketing to order management, and hybrid systems that select the best features from multiple offerings.

You also need a CRM vendor that fits your needs. This requires more than creating a feature requirement checklist and sending out requests for proposals. All of the top vendors meet basic requirements for core marketing, sales, and customer service capabilities. You want to find one that is flexible, scalable, and matches your corporate culture. This will allow you to grow without an annual system conversion.

The culture is important because you will be working closely with the vendor to create the perfect environment for your organization. Be sure to look at the supplier’s work environment, too. If its support hours are 8 a.m. to 5p.m. Monday though Friday, and your company operates 24/7, there will be a time when you are in trouble with no hope for help. Resolve those issues before making your purchase decision.

The evaluation stage is when you get to test drive your solutions of choice. Take your time to ensure that it will be a good fit. The system and vendor must be reliable because any failure can permanently alienate customers.

For example, a company that I shop with recently made a system change that affected its automated e-mails. The first hiccup was duplicating the generation of its monthly newsletter. I received 24 copies within an hour. A personalized apology and 22 more copies followed it.

Then, when customers started opting out by “replying with unsubscribe in the subject line,” I received those, too. Another letter of apology followed with a promise that it was corrected. The opt out e-mails continued for a week. Judging from my inbox volume, I doubt they have any customers left.


The costs of CRM systems vary depending on type, features, and number of users. The introduction of SaaS is making CRM affordable for every company, regardless of size. SaaS eliminates purchasing software and hardware for on-premise deployment. Many CRM vendors have SaaS versions available now or are in the process of developing them. Pricing can be as low as $39.95 per month for single-user on-demand access.

In addition to the base cost for the CRM software, there are internal expenses to consider. These include resource allocation for conversion, training, and integration. A good rule of thumb is to take the estimated first year cost (software, hardware, monthly charges, etc.) and triple it.

As with most technology, CRM systems will continue to improve and costs will come down. The transition of the Internet to a computing platform will yield better analytics and more Web-based applications.

The days of face-to-face transaction between shopkeepers and loyal patrons may be slipping away. But merchants must still aim for one-to-one marketing. The right CRM software can help you attract and keep loyal customers.

Debra Ellis is president of Wilson & Ellis Consulting, a Barnardsville, NC-based firm specializing in management, marketing, and operations consulting. Publication of her book Multichannel Magic is scheduled for the fall.

A quick look at some CRM systems

Company Features What’s new Cost
• Contact, marketing, campaign, and project management, salesforce automation, accounting, telemarketing Integration with Intuit’s QuickBooks $-$$
• Contact, e-mail, and list management, marketing and salesforce, automation integrated shopping cart, automated credit-card processing, accounting, affiliate tracking, flexible reporting Conversion tracking of pay-per-click $-$$
Microsoft Dynamics CRM
• Opportunity, sales process, order, and salesforce management, e-mail/direct marketing, e-mail response management, marketing campaign management, integration with Microsoft Office and Vista On-demand SaaS version coming soon $$-$$$$
• Salesforce and marketing automation, customer service and support, employee management, order management, project tracking, Website and analytics, partner management Integration with eBay $-$$
• Customer behavior modeling, predictive analytics, specialized industry modules, marketing, telemarketing, partner and sales management Enhanced financial services $$$-$$$$
• Service, sales, marketing management, analytics, forecasting On-demand system for telecommunication companies $-$$
Sage Software
• Salesforce and marketing automation, customer care, Outlook integration, Web self-service Enhanced functionality including data segmentation and territory management $$-$$$
• Sales, marketing, and service management, e-commerce, interaction center operations and management, channel and partner management Improved integration of communication technology and business systems $$$-$$$$
• Marketing performance management, Web analytics, customer retention, profitability and interaction management, segmentation, digital marketing, marketing optimization Enhanced versions of financial, capital, and strategic performance management $$$-$$$$
$-$$ = Affordably priced for small to midsize companies
$$-$$$ = Mid-range pricing for midsize to large companies
$$$-$$$$ = Higher-end pricing for midsize to large companies

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