Understanding Your Customers

CRM and your Business

As part of a move to improve customer service and sales, many businesses invest in a customer relationship management (CRM) system. CRM brings information like customer data, sales patterns, marketing data and future trends together with the aim of identifying new sales opportunities, delivering improved customer service, or offering personalised services and deals.

In addition to improving sales and profitability, CRM is reckoned to be very effective in handling customer complaints and can have a tremendous effect on your reputation. One study reported that only 17% of people tell someone when they receive good service, but 41% tell others about bad customer service they receive.2

CRM solutions fall into one of four broad categories:

1. Outsourced solutions

Application service providers provide web-based CRM solutions starting at around £45 per user per month, plus an initial set up fee of around £5,000.

2. Off-the-shelf solutions

Software companies like Oracle, Navision, SAP, Peoplesoft, and Microsoft's Great Plains offer module-based CRM applications that integrate with existing packages. Cut-down versions of such software may be more suitable for smaller businesses.

3. Bespoke software

Consultants and software engineers will customise or create a CRM system and integrate it with your existing software. However, this can be expensive and timeconsuming. If you go down this route make sure you carefully specify exactly what you want.

4. Managed solutions

A half-way house between bespoke and outsourced, managed CRM involves renting a customised suite of CRM applications as a bespoke package.

For more about investing in a CRM system for your business, read the implementation checklist.

² Society of Consumer Affairs Professionals in Business, 2004

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