BARELY SIX MONTHS after starting New York chocolate company Sweetriot in 2005, Sarah E. Endline reached an organizational impasse.
“We kept current customer info in QuickBooks and prospective customers’ information everywhere else,” Endline says. Between going back and forth between Microsoft Outlook and Excel to get contact information and keeping tabs on updates via other employees’ spreadsheets, the office was a mess. Tracking the company’s progress was next to impossible, too. “We needed a unified system. We wanted a place to not only put contacts but also a place for notes and reminders,” she recalls. And most importantly, “we wanted to track the lifecycle of a customer.”
Enter customer-relationship-management (CRM) software, which aims not only to organize even the most hapless of offices but also help companies cultivate customer relationships. At its most basic level, CRM software is a more comprehensive Microsoft Outlook. While Outlook may be used for managing appointments and emails, CRM lets multiple users collaborate and manage a customer’s overall contact history and essentially make notes in the margins. The technology also helps businesses design targeted marketing campaigns, suggest complementary or add-on products based on previous purchases, track customers’ purchase behavior overtime and assess what’s not working, too.
Indeed, says Jennifer Shaheen, president of Technology Therapy Group, a computer training company in White Plains, N.Y., one of the chief benefits of CRM is being able to develop a better pipeline. For example, “I know [in general] how many phone calls and emails it takes to follow up before a sale is made,” she says. “If you know it takes you a month and a half to close [on a project] you can start planning when to bring on other projects as well.”
CRM is ideal for start-up businesses that want to grow their contact lists and plan significant email marketing campaigns. “If people have better intelligence about their customers, they can better cater to them,” says Peter Marston, an analyst at Forrester Research in Foster City, Calif. “It is about having better info about people you want to target, cultivating leads and managing those prospects.”
As CRM software can either be downloaded to an individual computer or accessed via a web-based platform, the cost and capabilities of various options will differ. Here are a few considerations:
You should first consider your respective business’s needs, says Ramon Ray, a technology consultant and editor of Smallbiztechnology.com. For instance, a small business with a lot of clients, but not a lot of products, might look into “baseline” —
that is, less powerful — contact management tools that have CRM capabilities such as Microsoft’s Business Contact Manager and GoldMine. In contrast, businesses that are product-heavy and use multiple vendors and distributors might want to consider more robust services such as those provided by market leaders including Entellium, Maximizer and NetBooks, which also offers financial-management services.
If you have employees, make sure the application is user-friendly, says Shaheen. It’s a good idea to check product reviews on CNet.com, or ask other businesses in similar industries what works best. If it’s difficult to use, employees may reject the CRM and go back to Outlook. “If you’re comfortable and they’re not, then there will be a fight,” she adds.