Customer Relationship Management Solutions Benefits And Disadvantages

'"What are the advantages and drawback of the electronic CRM?" -- Mossi Malela

Whenever I read this type of question, I'm inspired to double my efforts in helping more selling professionals and marketers of technical solutions the help they need to get more from their Customer Relationship Management solution. Here are some excerpts from a resource, "27 Ways to CRM Return on Investment", to help answer this frequently asked question.

First, using Customer Relationship Management (CRM) software beats tracking customer relationships with Yellow Legal Pads and Manila Folders for any technical services business! This is a legitimate answer; because I've seen, many clients do well without computers (outside the accounting department) but have always benefited from some structured central system for tracking customer interactions.

A centralized system provides a place for interactions across your company. How often has one employee solved a problem that comes up again months later, but has to re-investigate and solve again because no one remembers the history for that particular account. In "Enhancing Customer Information to Improve CRM Return," I call CRM the "Guardian of Customer Data."

Customer Relationship Management software is also a place to document and measure what customers wants. Use your CRM system to track customer feedback, interactions, mapping expectations, and other areas that improve a customers buying experience.

Another benefit of customer relationship management is its ability to let you see the larger picture of customer interactions. Have you ever wondered what's going on with Customer X, or Segment Y? CRM can help you extract this useful information right away. However, these benefits (and there are many more) are only as good as your ability to utilize them.

The major disadvantages of Customer Relationship Management software isn't the tool itself as much as how business-to-business firms implement it. "A poor craftsman blames his tools." Too many companies jump into CRM software with less thought than they put into the clothes they put on that morning.

When implementing a customer relationship management (CRM) system, it's critical to have a clear plan, both pre and post training for users, and a systematic approach to rolling out features. I outline these critical points in my tool kit for CRM implementation called "27 Ways to CRM Return on Investment" which clients highly recommend for anyone planning to purchase or change their CRM environment. (That's why I wrote the kit in the first place.)

Here are a number of other mistakes sales and marketing managers make when selecting a CRM solution:

• Not integrating with accounting and marketing information, focusing too much on how sales people use CRM;
• Not connecting with service departments, forgetting that customer relationships span the entire life-cycle of a service engagement;
• Not planning or staging roll out with a systematic approach shaping the software to your company not the other way around;
• Forgetting to set baseline measures then testing new features to drive improvements in your selling system;
• Expecting customer relationships management to improve customer retention without implementing specific retention efforts;

I don't want to scare you. There are just as many drawbacks as there are benefits, some companies will see these problems more than others will. The key understanding it's preparation for a successful roll-out that can eliminate the drawbacks. Just like if you've never used a hammer before, you are more likely to hit your thumb, but it's not the hammers fault -- the same goes for Customer Relationship Management.

© 2006-2009 Ask Justin Hitt, All rights reserved.

Justin Hitt helps B2B selling professionals and marketers of technical services turn any Customer Relationship Management software into a sales building tool. Mr. Hitt is the author of "27 Ways to CRM Return on Investment", a resource for selecting and using CRM to your best sales advantage.