The Money Files

This month on ProjectManagement.com we are focusing on business process management. A popular topic in this area is CRM – customer relationship management. Many project managers will find themselves implementing CRM systems, often at huge expense and upheaval to the company. You may have one such system in your own company. But for those who haven’t worked with CRM, it can be a bit of a mystery. So what is CRM software actually for?

CRM can tailor marketing information

CRM software can be used to support sales by targeting customers with what they are really interested in. For example, if you work in a car dealership and send out a company newsletter to customers, you could tailor the newsletter to be relevant to each individual customer by including articles about the type of car they bought from you, or offering special deals on cars that you know they have registered an interest in. Instead of getting a generic newsletter, the same as everyone else, they get something tailored to their interests. This gives you more of a chance that they will come and buy something, or take up a special offer. It’s the same principle as getting vouchers from your supermarket in the post – the vouchers are probably for something that you have bought before.

To make this work, CRM projects involve setting up large databases to capture customer information and preferences. However, it also runs the risk of being a bit too targeted – how many times have you logged into Amazon or something similar and seen a ‘you might also like’ promotion that is completely irrelevant to you? They may be displaying something based on a gift you once bought for someone else, or the day that you let your cousin use your account to buy something for himself.

CRM can track customer behaviour

Companies want to know more about their customers, and CRM can help. The theory is that the more you know about what customers are doing or buying, the better you can tweak your sales offering to pick up more customers, or keep those original customers coming back. For example, if you run a coffee shop, you could track the busiest times of the day and offer promotions for people who don’t come to the shop at those times. This could give you extra customers during the quiet periods.

CRM can help sales

Once your CRM project has created a massive database to store customer information in, you can use it for supporting the sales team. In fact, many CRM projects have the sales team as the major stakeholders. Sales personnel can use it to record conversations with customers so that customers get a better level of service when they ring back again – they won’t have to repeat everything a second time, for example.

CRM can help build relationships

If your CRM project is well implemented and has good strategic goals, it can be a great asset for the company. Having the records of how you dealt with a customer last time can be really beneficial, especially if the records show that the person is either a valued customer who spends a lot, or someone who complains all the time about nothing. Of course, most customers fall in between these categories, but even knowing the last time they bought something from you can help build relationships. In a recent personal example of where this failed, I tried to order some flowers online as a birthday present. I had used the company before, and thought that the purpose of creating an account would mean that next time I needed to send flowers, all the data about me would be stored. Unfortunately, that wasn’t the case and I had to enter everything (everything!) again. Apparently the only reason the company has used my data over the past year is to send me junk emails that don’t relate to my purchasing history at all. They could have sent a tailored special offer (or even just a reminder email) that so-and-so’s birthday was coming up and did I want to send flowers again? That would have been useful. As it happens, I probably won’t use their services again – they have failed to make their CRM initiative of value to the customer and they certainly aren’t building any relationships with it.

If you think of your project stakeholders as customers, your stakeholder analysis and communication plan become part of your ‘project CRM system’ – a way to track and interact with the people you are working with. I think the easiest way to think of CRM is to imagine yourself on the other end. What do you want people to do with the information they hold about you? How can it be used to provide a better service? Just as you tailor project communications to your stakeholders, depending on what they want to know and how they want to receive the information, your company is doing it on a much larger scale to their customers. That’s what CRM is, although it is just as likely to fail as it is to succeed.

About the author: Elizabeth Harrin is Director of The Otobos Group, a project management communications consultancy. You can get in touch with her via ProjectManagement.com, Google+ and Facebook.