Although the term CRM is now synonymous with software it is a concept that has been utilized for decades by companies that operate customer centric policies.  It basically involves the processes and methodologies employed in managing the relationships between the company and the customer.

Customers are fickle creatures. They want to be looked after, nurtured, and made to feel special.  A typical customer’s basic instinct is to be loyal.  It’s like any relationship.  It may not be everything you want but it’s familiar and comfortable.  But just like a relationship, if you ignore and neglect your customers, they may get a roving eye… and your competitors are always out there trying to snap them up.

If you only have a few customers, it’s possible to remember and manage them with a minimum of technology.  Provide a good service, keep track of their orders, call them every now and again to see that they’re happy, send them thank you cards and so on.  That’s effectively customer relationship management.

But what if you have ten customers, fifty?  Will you remember every aspect of every transaction?  Will you remember to follow up on every call?

The purpose of CRM software is to enable you to manage multiple customers personally.  To automate processes that ‘touch’ your customers on a regular basis and then to remember every instance of every conversation, email, appointment, or transaction of any kind.  All of these transactions are stored directly in your customer’s unique record so that your total relationship with that customer is always available.

Good CRM systems feature ‘Activity Managers’, which can automatically create a sequence of tasks and events.

Let’s say you meet a bunch of people at an event who express an interest in your service.  You’ll enter them into the CRM system and then apply an ‘Activity’ from the Activity Manager Library.  A typical activity (series of tasks and events to be posted to the client’s record) would be:

1. Do immediately:  Send an email to express how happy you were to meet the person
2. In 1 day:  Send a flyer or brochure of your services by mail
3. In 3 days:  Make a phone call to reconnect and confirm that your flyer was received and is there anything more you can do at this time.
4. In 10 days:  Send eNewsletter (and add to monthly newsletter mailing list)
5. In 21 days:  Invite to your own network meeting
6. And so on…

Multiple activities can be created and applied to existing customers, new prospects, network partners or anyone else in your database.  The whole series of events is immediately applied to the customer record and the system updates all the relevant task lists, to-dos and appointment schedulers.

No matter how many customers or prospects you have, the CRM system will be managing the relationship, sending out reminders and thank you cards, scheduling phone calls, remembering renewal dates and so much more.  And all of these events and transactions will be neatly filed against the individual customer records.

Good CRM systems offer full synchronization with portable devices like your PDA, Blackberry, iPhone or Windows Mobile device.  Synchronization works both ways so that if you’re at a meeting and enter an appointment into your Blackberry, it will synchronize and update your CRM system.  If you constantly use Microsoft Outlook to schedule appointments, then it too joins the party and synchronization becomes a 3 way process.

CRM software has evolved over the years to accommodate new technologies and methodologies.  It used to be the preserve of big companies but nowadays, highly intuitive but hugely powerful systems are affordable by the smallest of businesses.

In my experience, a fully utilized CRM system typically increases business by over 30% because it encourages you to treat your customers the way they expect.  Where, in the past, you may have neglected to follow up, thank, send out renewal applications, cross sale and up sale notifications, special offers, anniversary cards, newsletters and so on, your CRM system will methodically churn out personalized materials and your customers will continue to love you and do business with you.

CRM software has become an incredibly important category.  How well you know your customer will determine how much business he or she will do with you.  As Sir Francis Bacon once said, “Knowledge is Power”.  That knowledge can be contained in your CRM system.