Is your immediate perception of the acronym ‘CRM’ that it’s just a piece of software that you install on your computer or phone, or subscribe to and access online?
Well, that’s partially correct.
But before you jump in and just sign up for a CRM service, let’s open your eyes positively to a wider context to it through this free training series. Because not doing so could cost you and your business lots of wasted time and money.
Welcome… Whether you’re new to CRM or feel you’re a seasoned veteran of the topic, there’ll be plenty in this quick-fire training series that you can take away to improve your client services business.
There’s a 1-hour video that covers the entire topic on the ‘What Is CRM?’ homepage and there are links to the right to the other modules in the series.
This module is an introduction to ‘What Is CRM?’ and I’ll address some of the core principles and misunderstandings of CRM and get you on the right track to benefit from this in your business.
The ‘What Is CRM?’ Series:
Your time is your scarcest resource in your client services business, so I’ll ensure that you maximise the return on the time you invest in this series back in your business.
What CRM stands for
Let’s get a fundamental out of the way. CRM stands for:
‘Customer Relationship Management’.
You may also see references to ‘Contact Relationship Management’, ‘Client Relationship Management’, or even ‘Commercial Relationship Management’.
But the fundamental core to any description of CRM is actually the word ‘relationship‘.
Without business relationships – with prospects, leads, clients, suppliers, referrers, your network – you don’t have a client services business.
What CRM does – The 3-S Method™
Because relationships are at the core of business, managing those relationships is fundamental to successful business operations.
Customer Relationship Management (CRM) splits into three core pillars:
- CRM Strategy – is your business’ approach and values to managing customer and prospective customer relationships in your business.
- CRM Systems – are the core processes that underpin the way you manage those relationships. The defined – or, as yet, undefined – processes for how you market, sell, get paid, deliver and support.
- CRM Software – is / are the software products that you use in your business to run those systems that achieve the customer relationships strategy.
We call this the 3-S Method.
Note how ‘software’ is the third part, and how it needs clarity of strategy and systems first with it. Without these it becomes considerably less effective, but let’s explore these three pillars more closely.
Relationship management (CRM): the strategy
Most client services business owners stumble into a way of working and never clearly outline a desired, or planned strategy to themselves or to their staff and service partners.
But if you take a step back from the coal face, there are five crucial strategic decisions to make about how you will deliver services and manage client relationships in your business.
They sound simple, but you’ll recognise that most businesses are inconsistent across them. Here they are as a strategy review questionnaire:
- Outcomes – How do your clients judge the quality of the outcomes of working with you?
- High quality – we often get referrals and thank you’s and clients often come back again. Easy to manage those who aren’t happy.
- Exceptionally high quality – well beyond expectations – every client blown away. Almost every client we work with provides referrals, testimonials or works with us again.
- Slightly above or around expectations. We may occasionally have quality issues and have lost clients in the past.
- Attention – How attentively are you going to manage client work:
- Clients fit a structured process – we always find out if there are problems, and we always know when they’re delighted. We get LOTS of testimonials and referrals.
- Highly attentively – we’re in regular contact so can be highly responsive and adapt very flexibly.
- Clients just get back to us when there’s a problem
- Communications – How are you going to manage client communications before, during and after they’ve been served:
- There’s a clear communications plan, with emails sent out from templates to save time and calls also get scheduled if appropriate.
- All personalised and regular – always try to speak with clients and try to use the same approach each time.
- Probably do a bare minimum of communications, if honest.
- Fees – What fees are you going to charge for the services you provide, relative to other providers of services like yours?
- Higher than almost all – e.g. top 20-30%
- Probably about the same as others
- Lower than many – e.g. cheaper than 60-70%
- Profitability – What will your net profit per client look like after all your costs – including time – are taken into consideration?
- Good and predictable, 20% or more net profit (revenue minus cost of sales and expenses);
- Modest, ~10-20% net profit
- Low or danger of loss-making, 10% or lower net profit
Now you’ve read them, go back over them considering them from these three perspectives, to the best of your awareness:
- a service business that has served you fantastically in a commercial or personal setting;
- then consider a business that has served you poorly, and finally;
- consider all five from in the context of your business. Try to do so not as you – the owner – but from the perspective of a client of yours.
As you went through the above, did you reflect on how most business owners consider their service levels as being higher than they are actually perceived by their customers? This is what commonly happens.
We’ll cover ‘what’ gets missed and let you consider ‘why’ in the second ‘S’, systems.
Before that, consider how your current strategy is for managing customer relationships in your business. Is it categorised by any of these three summaries:
- High Value: Involves attentive client care, high personalisation of service, personalised communications. Typically associated with high client fees and potentially good profits per client, but if you get the balance wrong, lower, unsustainable profits!
- High Value, Predictable Returns: Involves attentive client care, with standardised delivery of service, mostly standardised communications. This delivers profitable operations and clients recognising that service gets delivered as promised.
- Low Value: Whether intentionally or not, leads to inattentive client care, undefined standards for service delivery, and sporadic, unstructured communications.
It is not an entirely stress-free life trying to manage at the high value end where there’s an absence of systems predictability.
Nor does any business owner really get satisfaction from being at the low value end of the above range. But neither is it usually their plan or intention to run their business that way. However, life and activity and chasing work creates chaos and disruption. Standards and client care can slip. The inattentive client care outcome is just an impact of circumstances and lacking systems and structures.
In practice, for small client services businesses, and where time and resources are limited, the ‘high value, predictable returns’ path is the surest path to profitable, lower-stress business.
So how does a business get there….? Let’s look at systems.
Relationship management (CRM): the systems
There are 11 business processes that are common to most client services businesses:
- Capturing and managing enquiries and leads
- Following up with leads
- Booking sales meetings
- Managing the sales meeting
- Creating quotes / proposals
- Getting paid
- Doing bookkeeping and accounting
- Delivering services
- Managing customer care
- Winning additional work with existing and past clients
- Managing communications with leads, clients and past clients
The unsystemised business
The unstructured business doesn’t systemise these processes and this results in unpredictable and inconsistent activities. Inconsistency leaves to chance that any one of these activities could create more work, introduce delay, or not give predictable outcomes at any point in time. Without systems, processes get managed on clients’ terms and whims.
The systemised business
The more structured, systemised client-services business has processes in place for all or most of these. This helps them to manage business more simply, quicker and in a more connected and predictable way. It reduces delays and increases the likelihood of consistent, predictable returns from activities. With systems in place, clients are clear about the ‘rules of the game’, and they work on your terms, because they are clear and defined in your processes that they’re interacting with, consciously or unconsciously.
Relationship management (CRM): the software
If you’ve felt bemused at not knowing where to start with CRM or marketing software, don’t be surprised. As of last spring, there were 6,829 marketing technology services on the market. In 2011, there were only 150 providers. Want a visual representation of how chaotic and confusing that looks? Chiefmartec.com produces a ‘supergraphic’ of marketing technology provider in its annual “Marketing Technology Landscape Supergraphic“.
So if you’ve been confused about where to start, it’s not your fault!
However, there is good news. You’re not going to be like thousands of other business owners sticking a pin on a diagram and picking a CRM product on a whim.
The choice of a CRM software becomes considerably easier when you know that you know what strategy and systems you want to support.
It becomes a question of assessing providers against your simplified selection scorecard.
I’m not going to pretend that all CRM software is simple and does the same thing.
If it did, my business, Connectably, wouldn’t have a USP.
Likewise, I am going to encourage you to think beyond having an impression that your business will transform through a glorified digital address book style CRM. At least 95% of CRM software providers are little more than that: a contact record, with a little bit of segmentation capability, and somewhere you can record notes.
Well, that’s not going to address many of those core processes is it?
It’s not going to tick many of the CRM Systems criteria.
As we’ve established, CRM combines strategy, systems and software. Your only priority in assessing software providers is to match them up against your defined strategy and existing, or newly established, systems.
The number one mistake businesses inadvertently make around CRM…
Despite this ‘hidden in plain sight’ insider secret that you now know, most businesses start-, and often end-, their approach towards customer relationship management (CRM) in their business with the ill-considered selection – and half-hearted implementation of – a generic CRM software.
Can you see how that could potentially be a simple but costly mistake?
It’s invariably a decision that’s taken without consideration of their target customer relationship management strategy.
Worse still, taken without confirmation that the software will allow them to create new, – or, operate existing – systems.
Yet worse, it’s often followed by a period of confusion, frustration and underwhelm that the time investment they’ve made isn’t really paying off. Then there’s thousand or two pounds spent on the software itself…
They don’t want to admit it to themselves, so they persevere. But then, 8-12 months later, they cancel the subscription.
They blame entirely the software for the failing and rue their original decision and ever coming into contact with the software company in the first place.
If you’re one of those businesses that’s previously signed up to a CRM software on a marketing whim, or half-recommendation, then take it from me, it’s not your fault. Or perhaps reading this now, you would have been one of those businesses.
Software marketing dollars
Why? Well, because huge software marketing dollars have been spent by large CRM software companies to give you a perception that it’s only about the software. If you’ve spent any time at all trying to research CRM software options then you’ll no doubt have struggled to find a single provider of software that encourages you to think about the strategies or the systems first.
You are, however, in the right place here. Whilst I now run this CRM software business, Connectably, it is borne of 12 years running client services businesses. Ironically, the last 7 of those years have been as a CRM consultant. Or, should that be ‘thankfully’? Either way, you’re in the right place to benefit from those insights.
So let’s get you thinking about your CRM strategy, your CRM systems that run the strategy, and CRM software that helps you to implement the systems.
Taken step-by-step, it’s not complicated. Time spent now to understand it and plan properly will save considerable wasted time and money later.
Why CRM is important
- Strategy without systems or software is a recipe for overwhelm.
- Systems without strategy results in confused relationships and communications. Systems without software creates inconsistency.
- Software without systems or strategy results in frustration and underwhelm. It becomes the software’s fault you haven’t fixed your business’ relationship management problems.
Prescription without diagnosis is malpractice
There is an awful lot of misguided information online that ploughs straight in to providing ‘software’ recommendations, or telling you what the first software solution you should buy is. They occasionally start with advice like just starting with a spreadsheet or a simple email marketing solution. I don’t get that advice. As they say in health care, ‘prescription without diagnosis is malpractice’:
- Spreadsheets: The danger with CRM by spreadsheets is that data without unique contact insights is just managing an address book. What does that spreadsheet bring you? You can’t create unique communications with it, nor can you position
- Simple email marketing: Seeking outcomes without individual insights into contacts leads to shooting in the dark. So, if your email marketing an entire list en-bloc without unique insights about them, how do you speak to individuals about their individual problems and pains.
- Solving the wrong problem: without strategy and systems in place, papering over the gaps with loosely connected software is at great risk of solving the wrong problem and not achieving any tangible goals.
Who needs CRM
What’s next in this ‘What Is CRM?’ series?
CRM Training Modules (Overview)
I’ve structured the training series into an order that will suit most client services businesses exploring this topic, so I’d recommend visiting each module in turn, but if you have a pressing need for one topic over another, then do not hesitate to jump into that topic first.
CRM for small business
When you’re ready to start on this, please visit the CRM for Small Business module.
Xero and CRM integration
When you’re ready to start on this, please visit the Xero and CRM Integration module.
CRM and lead management
When you’re ready to start on this, please visit the CRM and Lead Management module.
CRM and marketing automation
To discover more, please visit the CRM and Marketing Automation module.
What does CRM cost?
To start first with this, please visit the ‘What Does CRM Cost?’ module.
Why CRM fails
Getting a CRM implementation wrong in your business can be costly – expensive in both financial and effort. If you’re looking at this from a ‘tell me what’s going to go wrong first’ perspective, then I’d recommend you prioritise this module on ‘Why CRM fails’ as one of the first. Fore-warned is fore-armed.
Which CRM to choose?
When you’re ready to start on this, please visit the ‘Which CRM to choose?’ module.
Your CRM implementation plan
The CRM implementation plan module helps you to plan out your successful CRM rollout in your client services business. The module also includes links to download your implementation plan. It’s the last module in the series and leads into an implementation help series.
The 3-S Method™ and this ‘What Is CRM?’ training series are copyrighted materials © Connectably Ltd 2019 and may only be used or referenced with permission. Please contact us via the chat icon at the bottom of the page to discuss.