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CRM systems are for customer relationships, not transactions

Companies need to stop viewing CRM systems as just a place to house transactions.

As a CRM consultant, I've observed many companies that tend to view CRM as a piece of software, much like Microsoft...

Outlook or Word applications. You install it and use it, and it serves a purpose. It is viewed as nothing more than an electronic record system. I've even heard of customer relationship management defined as "customer record management."

The main purpose of CRM systems is not to serve as a place to house records or transactions; it's a place to define customer relationships. For some companies, this means a change in thinking for CRM to have a true impact. It's not simply a piece of software, but a means of transforming business operations.

What do we mean by this? Let's consider examples where software is transaction-based.

Many businesses rely on Excel or other spreadsheet-based systems to store information about business operations. It might be as simple as a spreadsheet of figures or something as complex as a pricing matrix. They may also use Word for creating documents and other correspondence. At the same time, Outlook might be the application to manage interactions with customers through things such as email, appointments and tasks.

All these applications serve as repositories for transactions. In their own way, they serve a useful purpose, but in no way manage customer relationships other than just recording information.

And as vital as these technologies are, could you look at these applications and immediately see all business touchpoints? Or identify the state of your relationship with customers or prospects? Could you, based on previous interactions, tailor a marketing campaign to a particular need?

CRM should be used or viewed as a vehicle to drive change, to transform a way of working.

Implementing a CRM technology allows companies to capture and manage data and information, but adds a layer of relationship management on top to manage customer interactions and offer better service.

For some companies, this is a new concept. CRM has to be viewed as more than just a transaction recording system. CRM should be used or viewed as a vehicle to drive change, to transform a way of working. It should be viewed as a window into your interactions with customers and potential customers. In this way, a good CRM implementation becomes more about transformation than transaction.

As an example, for many years, a successful business relied on tracking leads, conversations and appointments in its email system; it already stored its data. But what it couldn't do was quantify success. When the CEO wanted to see how productive calls were, it was difficult to have a view of this.

Implementing a CRM system allowed the company to transform its way of working. It still recorded calls, but details were captured in a managed, free-text manner. While this was a new way of working, requiring salespeople to spend more time recording interactions, the business benefited with insightful and useful information on call quantity and quality.

Another company completely changed their process by implementing a CRM system with an automated workflow engine. Previously, as the sales process moved from sales to warehouse through finance and shipping, each stage was manually processed with a great deal of paper and email. It was difficult to visualize where sales was in the process. An automated workflow allowed the transformation of this way of working, speeding up and logging stages of the sales journey.

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