CRM: Strategy and Demand

CIO magazine offers a tutorial on CRM that addresses many practical questions and considerations. For example, companies should be emphasizing CRM as a strategy, not just a technical solution. This approach, in many ways, is similar to the way companies should implement ERP solutions; if management just considers an ERP system to be a technical solution, without thinking about strategy and change management, the project is doomed to fail. CRM’s strategy helps an organization understand its Customers and grasp how to meet their requirements. This strategy translates into selling customers what they want, cross-selling if possible, obtaining new customers while retaining old ones, closing deals faster, and in general, offering better customer service. Companies can implement this CRM strategy through call centers, Web sites, advertising, or other channels. Patterns of customer behavior can be tracked from each of these areas and combined into a single depiction of the customer. According to CIO, if someone has multiple accounts with one bank, it is to the bank’s benefit to treat this person well each time it has any contact with him or her, even if the employee serving that customer has very little business with him or her. A CRM project should be run across all departments, like an ERP project. And management buy-in and commitment is critical for it to be successful. Traditionally, financial services and telecommunications organizations have been the first to adopt CRM. Manufacturing organizations are the last. There has been a shift toward on-demand CRM, but some companies have Reported problems with this newer delivery of the software. In 1999, Salesforce.com introduced on-demand CRM, which was an attractive option for small to midsized companies that wanted to get into CRM without a huge initial investment. However, integration can be tricky, especially with larger and more complex integration spanning many departments; upgrades are problematic; and privacy-sensitive organizations, such as health care, are reluctant to give up data to a third party.

Questions:

1. What are the advantages and disadvantages of on-demand CRM for a small to midsized company? What are the advantages and disadvantages for a large company?

2. On the Internet, visit Salesforce.com and report on the various products the company offers. Assume you are running a small Internet business that sells tickets to concerts and sporting events. Would you be able to use Salesforce software? Why, or why not?