Product category:
Supply chain planning and execution software
News Release from: SSI | Subject: Customer relationship management
Edited by the Manufacturingtalk Editorial
Team on 18 December 2002
CRM is a mindset, not an application
Customer relationship management is trendy at the moment, but like so many trendy things, it's not always clear exactly what it means.
Customer relationship management (CRM) is trendy at the moment, but like so many trendy things, it's not always clear exactly what it means So says Trevor Lewis, CEO of supply chain solutions vendor SSI
This article was originally published on Manufacturingtalk on 26 Jun 2001 at 8.00am (UK)
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"Vendors of 'CRM systems' would like you to believe that it's an all-encompassing software product that, when implemented, will transform your business into a customer-delighting powerhouse; but the evidence is that a systems approach alone will not deliver CRM nirvana," says Lewis.
So what is CRM? Analysts AMR have produced research showing that firms who implement big-ticket CRM systems generally don't get the sort of returns they expect.
Moreover, for medium sized companies in sectors such as manufacturing, the relevance of these systems would be questionable even were their track record flawless.
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"Big-ticket CRM includes a wide range of modules, from marketing campaigns management, through call centre management and computer telephony integration (CTI) to after-sales service.
And, in truth, many of these modules are only of passing interest to the typical manufacturing company," says Lewis.
"For a large company that sells to individual consumers - a supermarket, say, or a financial services provider - big-ticket CRM is vital, because it allows them to target, monitor and support customers individually, and mimic the kind of service delivered by old-fashioned small vendors," Lewis continues.
"It's CRM that enables supermarkets to use loyalty card information to send you offers that are tailored to what you like to buy.
For manufacturers, who usually sell through middlemen, though, this kind of system is less relevant.
Their potential client base is much smaller, and they don't need to appear smaller and more personal than they are.
Most importantly of all, they generally earn the majority of their income from people they already know.
New business is important, but it isn't so huge a proportion of revenue that it justifies spending big money on IT to support it.
If you have salesmen on the road, simple sales force automation tools will do the job; you don't need the monolithic CRM approach." When it comes to supporting existing customers, though, good IT systems are crucial.
Winning more business from past customers is proven to be much cheaper than acquiring new accounts, so the return on any investment will be quicker, too.
So, for a medium-sized manufacturing company, CRM - according to SSI - should generally be about supporting your existing customers.
Can your staff see customer data and give accurate information about when an order might be received? Do you have an easily accessible record of the products your clients have bought in the past? Can customers check the progress of their orders via your web site? And are you able to identify likely prospects among your client base for a proposed new product? "These are the key questions of CRM, not whether or not you can accurately target a 100,000 recipient mailshot," says Trevor Lewis.
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