CRM 101: Do you begin with sales or service?

Choosing between sales and service to begin your CRM initiative can be a tricky problem. The first step is some internal analysis.

The answer to whether to start a CRM initiative in your sales or service department essentially comes down to another

question -- where do you need it?

"The right question is 'should you begin?'," said Denis Pombriant, founder and managing principal of Stoughton, Mass.-based Beagle Research Group. "And then how should you begin? I think you begin with analysis -- it's hard, dirty and no fun, but it works."

According to Pombriant, companies really need to conduct business analysis to answer fundamental questions like, "Where is the business hurting?" "What areas need improvement?" "What is our focus -- product excellence, service, low price?"

Also, a company should identify industry norms, like call waiting times, to help determine where its level of service falls and, ultimately, if it needs a CRM initiative, he added.

Finally, armed with its own analysis, a company should apply this information when investigating and negotiating with vendors.

"What you need to do is ask the vendor how their customers typically stack up against known metrics," Pombriant advised. "And then from that you should be able to determine if there's going to be an ROI."

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At this point in the process, a company knows whether to begin its CRM initiative with sales or support -- at least theoretically.

However, many times, instead of business analysis, a crisis or a competitive threat pushes a company, particularly a small and medium-sized business, into rethinking its strategy, said Laurie McCabe, vice president of SMB business solutions for New York-based AMI-Partners, Inc.

For Sharon Dill, chief information officer of PADI, a scuba and snorkel training company based in Rancho Santa Margarita, Calif., the straw that broke the camel's back occurred one day in a company-wide meeting. During that meeting, several different departments admitted to speaking with one customer in the course of a week without realizing the other had also spoken with the client. This seemingly minor event propelled Dill into action.

"We really wanted to be informed as we talked to the customer," Dill said, so that everyone at PADI could view a customer's history to avoid any redundancy.

Even if there's an "event" -- small or large -- that gets the CRM ball rolling in a new direction, the truth is most companies aren't starting from scratch, said McCabe.

The reality, McCabe continued, is that most companies have existing sales and support systems in place, and will likely upgrade one or the other. As a result, CRM is often deployed in a "hodge-podge" fashion. Either companies may not have the budget to upgrade both, or some users just don't like change. So, oddly enough in some scenarios, a company may choose a solution with both support and sales, but only employ one of those components.

Despite this fact, McCabe stressed that companies, particularly SMBs, can still be strategic with their CRM initiative.

"Sometimes the step that gets skipped with the smaller company is the evaluation and comparison process," she said. "Obviously, they don't have as much time to compare as in-depth or as many products as a larger company, but I think it's still really important to pick a couple -- two or three -- and really put the vendors through their paces."

Some firms, however, will simply take the path of least resistance.

"It's easier to start with SFA [sales force automation]," McCabe said. "A couple of sales reps can go out and buy ACT and start using it. It's easier for people to start using stuff like [ACT], whereas in a customer service department you really have to have a more coordinated approach."

With customer service viewed as a cost center and with so much focus on the bottom line, the reality is that many companies are sales driven, McCabe said.

Dill started with sales, but for a different reason.

"They're the ones who are in contact with the customer every day," she said.

PADI's sales team had tried using ACT, but ran into synching problems. "[Ultimately] the overhead of trying to get ACT to work was too great for us [PADI]," Dill said. For these reasons, she didn't want deploy it across the company. Dill knew she needed to find a more integrated solution.

PADI was successfully running Macola ERP (enterprise resource planning) software from Andover, Mass.-based Exact Software. Supported by that example, Dill chose its sister product e-Synergy CRM collaboration tool.

"e-Synergy is Web-based, so all you need is Internet Explorer and that makes it an easy implementation," Dill said. "So, it's one database, there's no synching involved. Anything that's put in there is real time and that has great value."

Dill also liked the idea of dealing with one vendor, which she believed contributed to a greater chance of a successful integration between products. Macola, using XML, can speak to e-Synergy. "There's no finger pointing [with one vendor] if there are any problems," Dill said.

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