Sunday, September 03, 2006

The role of software in a CRM program

In the last couple of weeks I have been part of many discussions on CRM programs and the scope of software in CRM. Being part of the industry, I think it is my responsibility to clarify (again) that CRM is not a piece of software as most of the people think.

Even some of my learned colleagues from the Direct Marketing & CRM industry think otherwise, such is their knowledge and awareness about CRM.

And hence I thought it would be useful if I tried clarifying the role of software in CRM and try illustrate what happens to CRM if we don’t have a software system with some examples.

Data collation

This is the first step of any CRM program.

The data helps us understand who our customers are and what their needs, wants & preferences are.

We used to fill in sheets of papers before technology made our lives simpler. Now we use online forms, web based data capture forms, touch screens etc.

Advantages of technology

1) The time and effort needed to decipher handwriting and collating all the data into one platform is minimized

2) Capture errors are minimized

What if we didn’t have technology?

There wouldn’t have been any change, except an additional few hours capturing data from a sheet of paper and standardization.

Therefore technology or no technology a CRM program can be initiated.

The technology is only meant to make our lives simpler.

Now that you have collected data and know your customers / prospects, what is the next step?

Using the data to offer what the customer wants.

And hence building a relationship with the customer.

What do we do? (some examples)

1) Send communications in the language a customer has requested for.

2) Send him the offers he had requested.

3) Leave those customers who didn’t want to be contacted alone.

4) Send the customer an invitation for the category he / she is interested in.

What if we didn’t have technology?

An office boy and an account executive from the direct marketing agency would be sorting all the feedback forms from the customers and arranging them up in piles according to preferences.

This sorted / standardized pile would be used for the exercise they are planning to undertake.

This is a manual process and hence the process needs to be repeated for every exercise the brand wants to do.

Therefore you don’t necessarily need a data warehousing or reporting software for a CRM program. You need two patient people with two good pairs of eye to do the job.

These are some examples to prove that a good CRM program would survive without any software support.

To sum up

1) Any CRM program starts with understanding who our customers are, without C there is no CRM.

2) A software program helps us minimize time and save costs.

3) Software is not and cannot be, the be all and end all of any CRM program.

4) CRM is a dynamic environment, you can’t have a one size fits all solution.

5) Software works on algorithms, a customer doesn’t . He relies on his experiences with the brand, his impulses and his needs & wants.

6) Customer Relationship Marketing, as the name itself suggests starts with building relationships with your customers. A software can’t build relations, only humans can.

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