3 CRM use cases: Which is right for you?

Go to any customer relationship management (CRM) vendor’s website and you’ll be inundated with wondrous tales of how the CRM system can transform your business, increasing profitability and customer satisfaction at the same time. CRMs give you access to new markets, provide executives with a 360-degree view of the customer relationship, enable real-time responses to myriad customer problems, increase sales productivity and improve operational predictability, all while whitening teeth and freshening breath! The good news is that there isn’t a single lie in any one of those websites. (What they say is guaranteed to be true in someuniverse, if not the one we inhabit at the moment.)

Of course, a CRM system itself doesn’t transform anything. It’s a piece of code enabling visibility, automation and follow-through. What will actually change business performance are the behavior changes in your people, the improvement in data quality/relevance, and the process improvements enabled by the CRM system.

Buying the best CRM in the world is like buying a Ferrari or Lamborghini expecting to immediately start winning races. In fact, if you don’t change the way you drive, these cars will make you a very sloppy driver.  In the CRM world, the only way you get superior results is through users who are actually happy to work in the system and data that’s clean and accurately reflecting the customer situation. That’s hard.

Seen in this light, a CRM system can be viewed as a tool that helps you realize your team’s potential. It’s like buying a better tennis racket or the coolest new skis. If your organization doesn’t have the potential to really do what you want — to play tennis or ski, as it were — the CRM project merely exposes the weaknesses. It doesn’t help you to do clumsy, dumb things faster.

Think realistically about your organization’s readiness and the breadth of how you actually manage and cultivate customer relationships today. There are plenty of business categories that have yet to evolve to need everything that’s on the CRM menu.

Here are the big three CRM use cases. Which fits your organization’s processes and people?

1. The CRM system as a smart file cabinet

In professional services firms and boutique financial services, for example, the main focus of the CRM system is to make sure everyone in the organization knows the current status and history of the relationship. The relationships are long-running, sometimes lasting decades, and personal. While every company has a sales function, there is little in the way of classic sales focus. Unless you’re “Better Call Saul!”, high pressure sales tactics don’t fit with law firms or accountancies.

One telltale sign of this kind of organization: Nobody has the word “sales” or “account manager” on a business card, and there’s little focus on traditional lead generation. Of course, transactions occur — but the real deal-making is done over dinner or golf. The sales cycle is implicit, and the deal stages may be as simple as universe, interested, negotiation and closed.

The focus of this use case is making sure the relationship is properly cultivated, with periodic updates, while also avoiding redundant or uncoordinated calls from multiple workers. Doing this means collecting and organizing as much information as possible, as easily as possible, about prospects and customers. Key inputs are email, contact lists, address books, event attendee lists, external professional databases (such as LinkedIn, CrunchBase, or LexisNexis) and documents. Key outputs are alerts about upcoming or overdue action items, periodic relationship status reports, relationship “one-pager” briefing sheets, and activity summaries. Typically, this use case involves little to no process automation: the users are in charge, the system is just a tool. Due to the professional nature of the users, travel and offsite work is a fact of life, so there’s a real need for mobile device access and remote collaboration. That’s why cloud CRM applications have been cleaning up in this area.

2. The CRM system as collaboration & coordination tool

This is the use case where most companies start out, and it’s the default for many CRM products.  The classic sales force automation, marketing automation, and support ticketing systems fit here, as they are focused on making teams work more efficiently and predictably.  For companies whose business depends on account management, renewal/upsell business, and multi-phase contracts — for example, large capital equipment manufacturing, OEM supply chains or commercial construction — the CRM’s main function is enabling collaboration and coordination among marketing, sales, engineering, manufacturing, service and support. In these companies, sales and support cycles are clearly delineated, typically embodied in five to 10 stages that are discrete even though they may be complex and sometimes intertwined.

In addition to the scope described in the “smart file cabinet,” the CRM system needs to be integrated with several other IT systems to provide at least daily updates so that users can see the customer’s “state of play.” Further, the system needs to run several lightweight workflows with alerting emails and user prompts to make sure the ball is moving down the field in a coordinated way. While the system does provide reminders and manages action items, the actual process being executed is entirely in users’ hands. Collaboration with customers is typically enabled using communities and user forums, live-chat windows on the website, and “dedicated” customer support agents, all integrated with the CRM.

For organizations that need to do a lot of interaction for customer/prospect problem solving, a collaboration system such as Chatter or Jive should be integrated with the CRM to improve organizational responsiveness. Seriously consider integrating your web conferencing system and social media monitoring tools with the CRM as well. This goes double if your company has a large set of internet-based customers, as problems fester quickly there.

3. The CRM system as task master & process driver

This is the most ambitious CRM use case, with the biggest results for organizations that really are ready. High-performing B2C companies in the electronics, software, gaming, and financial services, or B2B high-tech industries, all need highly synchronized marketing, sales and customer service organizations. There will be tough quotas, high commissions, and tight SLAs, both internal and external. In this use case, the CRM is a foundation for the company’s competitive advantage. A good example of such a company is Salesforce.com itself.

Here, the sales and support cycles are closely measured and highly standardized. These companies often have multiple marketing, sales and support processes running in parallel — for example, standard vs. 24×7 support, enterprise vs. SMB sales, and omni-channel sales. In these organizations, you may see metrics even on predictions, such as forecast accuracy or models of backlog burn-down rate.

In this use case, the CRM must do everything from the first two use cases while adding tighter linkage with other systems and business processes. Data may be synchronized hourly or even continuously. Workflows aren’t just advisory messages or read-only data, but have blossomed into fully transactional approval cycles, escalations and management by exception. The CRM need becomes the heart of a giant state-machine to manage the humans doing marketing deliverables and programs, sales cycles, order expediting, customer support, professional services, and renewals/loyalty programs. Collaboration will be more tightly integrated as well: Call center phones are linked to the CRM, and customer support is provided through self-support portals. This becomes a key success factor to executing an omni-channel strategy for sales and support.

As powerful as this use case can be, it involves a significant amount of change management, process optimization, and even some job redesign.  That means politics if it isn’t handled well.

This use case provides the most mouth-watering projects for CRM integrators and consultants. If you need all this, budgets will involve at least six significant digits (and the biggest projects may need double-precision for the total budget).

Which CRM use case is right for you?

The foundation of each of these 50,000 ft. use cases is information sharing and increased visibility. Every CRM implementation should see those benefits, to the degree that users actually use the system and the data is up to date. It is usually best for organizations to start at the first level and get it working solidly in your business before moving to the next level. Moving prematurely or by executive fiat will magnify risk (we all know how reliable FIATs are).

The three CRM use cases described above can overlap, particularly in a large corporation. For example, one department in your company will operate at the collaboration and coordination level, while another uses the CRM as a task master. Not every business process needs to evolve to the task master use case – and some should never go there.