Do You Need CRM? 10 Questions to Guide Your Customer
Relationship Management Strategy
by Geoff Ables

(1) Am I trying to communicate with a large audience
of perhaps 500 or more individuals, on a consistent
basis (4 times per year or more)?
A few years ago, I was speaking with a friend who is a
senior executive at a large restaurant franchise. The
conversation went something like this: (2) Will I be able to benefit (lower my costs or increase
my revenues) by addressing that audience through
direct channels such as snail mail, email, web,
telephone, salesperson or point-of-sale?
Executive, "We're thinking about investing in a CRM
program, what do you think about that?"

Me, "Sounds great," but I knew that they had very slim
margins, low revenue per transaction and many
transactions. "How do you expect to justify the
This is not survey or focus group data, but detailed
data such as transactions, sales stage, segments
and demographics. Your goal is to leverage this
data in a way that makes your sales more targeted,
relevant and personalized allowing you to get
customers faster and keep customers longer.
It's a fair question. But because of all the
misinformation still in the marketplace, the answer can
be elusive.

At the most fundamental level, every company has
customers. And every company should maintain some
basic information about those customers (names,
addresses, purchases, contracts, invoices, etc).
Therefore every company should have at least some
basic "CRM Technology" to track and serve their
customers. Even small businesses use Outlook,
Quicken or other applications for this purpose.

(5) Is the data used to analyze, segment, personalize
and target customers available?

This last one can
sometimes be difficult to
answer. Ask yourself
three more questions to
bring clarity: (i) Do I
already have data

through 4. If you see a lot of opportunity in your sales
group, then make it a priority to streamline the sales
pipeline process. If direct mail is critical to your lead
generation or customer communications processes,
then focus on database marketing. If the Internet is a
popular channel with your customers, then consider
personalizing it for each customer, tracking it, and
collecting click stream data.

The more of those questions you answered with a firm
"yes," the more likely you are to benefit from CRM. If
you comfortably answered "no" to all of those
questions, then focus on fine tuning other ways of
getting new customers and serving existing customers -
you're not likely to get much value out of CRM.

If more than one or two of your answers are "maybe,"
then sit down with someone you trust to be objective
and experienced and try to firm up your answers.
There is one more question you should ask yourself. It
is usually for companies that have become more
sophisticated in managing and using customer data.
But it is important in that it can lead to a significant
competitive edge. So I include it here for your long-
term thinking:

Once you've made the decision that CRM is for you, it's
not a matter of deciding to do it. You need to
understand ...
(5) Will custom tailoring your products, services, prices

more communication channels (i.e. sales force, direct
mail, email, web site, call center, telemarketing, etc):

(1) Where are you having the greatest volume of
customer interactions?

Summary and Helpful Hints

• Don't jump in too quickly
. Just because a competitor
is "doing CRM" or a salesperson is selling cool
technology is no reason to leap in. Decide if it is a
good match for your business before investing.

• Go for the "low hanging fruit."
Discover which area of
CRM can deliver value the fastest and focus on that -
don't try to do too many things at once.

• Get help
. If you think CRM is for you, but you have
little expertise, then find an objective outside expert
that can help.

• Take it slowly
. CRM can be thought of as an
evolution. There is no final destination, and you will
continue to fine-tune even your best processes and
technologies. Break projects into affordable pieces
can be delivered within 2-5 m