Understanding the Benefits of CRM

What is Customer Relationship Management?

The concept of Customer Relationship Management became a “thing” relatively recently, when you consider the fact that buying and selling and therefore “Customers” has been with us humans for about 150,000 years[i].

Thus, it was at the far end of our commercial history, when, in the 1970’s the idea of obtaining feedback directly from customers began the earliest glimmers of “Relationship Management.”  It was, however, the development of the database used widely in business that allowed the idea of tracking and managing the relationship with the customer as an ongoing process to help sell and upsell to them to truly take flight. The first widely used system for small business was developed in the mid-eighties[ii] and featured the basic concepts that remain foundational for any Customer Relationship Management system:

  • Tracking Information around people and organizations
  • Tracking activity history between the CRM user and people and organizations
  • Tracking opportunities for the CRM user
Because modern CRM systems are used by almost ANY type of organization to track almost ANY type of information, you will notice throughout this blog that we avoid the assumption that you will be using your instance of Dynamics 365 to track only Leads and Opportunities for selling. In fact, Microsoft Dynamics is used by thousands of organizations that don’t sell anything directly, but need to track very specialized sets of data.

Since this was over 30 years ago, you may suspect that these basic features must have evolved and widely expanded.  You would be right about that.  In fact, the concept of Customer Relationship Management was originally applied to organizations that sell goods and services to people and other organizations, but CRM systems have evolved to the point at which almost EVERY organization of almost EVERY type can benefit from tracking a wide variety of information about those that they interact with.

How Does my Organization Benefit from CRM?

One of the most important things to understand is that in recent years it has emerged that “data” – that is, information ABOUT people and organizations, has intrinsic value.  When we discuss the benefits of Customer Relationship Management, it’s important to understand that there are two major classifications of benefits:

  • Operational Benefits
  • Executive Benefits

As you will see later in the document when you consider the tactical strategies of deployment, it’s sometimes tricky to balance these two sets of benefits to ensure a successful deployment.  For now, however, definitions are in order.

Operational Benefits

Modern Customer Relationship Management systems are designed in a way to improve operational efficiency. That is, whatever business process is in place, or whatever business process needs to be designed, or re-designed, a good Customer Relationship Management system will support, and perhaps even help enforce an efficient operational process. If the process, whether it be sales, service, marketing, or another completely different type of process is supported by a well-designed CRM, you can expect to realize the following benefits:

  • Universal Access to Useful Information. With a centrally-managed, relational database that is presented properly, and accessible from anywhere, staff from throughout the organization can be apprised of historical and current information about the people and organizations they are dealing with.
  • Automation of Process. Repetitive and mundane tasks can often weigh an organization down. A fully-featured Customer Relationship Management system like Microsoft Dynamics 365 supports the ability to automate steps during any process, so that when data changes in one area of the process, data is created, changed, or transformed in another area of the process.  The simplest example of this is an automatic task/reminder to follow-up with a person or organization is created under a certain set of conditions.
  • Enforcement and Support of Process. Efficiency is often achieved through a disciplined approach. This is true for sales, but also service – for instance, what is done by staff when a service request or trouble ticket is received?  Or what are the steps to onboard a new customer? If those steps are accessible by everyone in the system that is designed to track their activities in the first place, then operational efficiency is achieved when the steps are supported by the software system.  The most obvious example of this is the chevron-based business process flows that ship with Microsoft Dynamics 365 by default for the Lead and Case entities.
  • Structured Communication. One of the most time-consuming tasks that burden the modern worker, whether it be sales or service, is communication. This is especially true if the same email needs to be sent under the same conditions, time after time. A good CRM will automate these communications and give back those minutes and hours back to the staff member.


Executive Benefits

While it is true that operational benefits will “roll up” to the Executive level, we present here some benefits that directly impact the Executive branch of the organization with the use of a well-designed and implemented CRM.

  • Improved Reporting. One of the great benefits of a CRM is the ability for the Executive staff to immediately gain answers to questions about their business, without having to ask anyone. For instance, one of the traditional tasks of the Sales Manager in many organizations is to prepare a weekly, monthly, or quarterly “sales report,” for those that they manage. This is presented to the Executive staff. With a CRM that is used properly by all staff, and with well-designed dashboards and reports, the answers can be had immediately and without taking time away from the sales management team. This, of course, is true for any type of organization, sales-driven or otherwise.
  • Forecasting. With good data comes good forecasting. This is especially true now, with the advent of Machine Learning algorithms, a number of which are represented as add-on applications that can be installed on top of your instance of Microsoft Dynamics 365.
  • Staff Visibility. For the Executive staff, it’s important to understand the activities of the employees across the organization. If staff are widely using a centralized system to track activity, this visibility is instantaneous and ongoing.
  • Holistic View. With a well-designed system of dashboards that answer specific questions under specific criteria, an Executive benefit is the holistic view of the entire operation, or output, of the organization.
  • Data. It could be argued that with recent developments in Europe (GDPR), that this benefit may be slightly rolled backward, but the fact remains and is likely to remain that information about people and organizations, and their historical behavior and other criteria is intrinsically valuable. So much so that fortunes have been made by mergers and acquisitions based on little else but the value of the database held by the target of the acquisition[i]. Thus, it should not be discounted that the aggressive use of a well-designed Customer Relationship Management system could potentially increase the value of the organization.

[i] HuffPost (2017), Capitalizing on Data-Driven Acquisitions in 2017, https://www.huffingtonpost.com/entry/capitalising-on-data-driven-acquisitions-in-2017_us_58adbf9de4b040d4868a6337

[i] Watson, Peter (2005). Ideas: A History of Thought and Invention from Fire to Freud. New York: HarperCollins Publishers. ISBN 978-0-06-621064-3

[ii] Wikipedia, ACT! Software History