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Robust tools help nurture customer relationships
by Elizabeth Martin Remember when your Rolodex was enough?
These days your customer list could fill several Rolodexes and you might have to ask your sales manager who was the last person to talk to a customer. But everyone can have access to basic customer information in addition to details about payments, invoicing, and purchasing trends when you use a customer relationship management (CRM) system.
Chances are, you’ve already got a CRM system of some sort. But the choices and capabilities of these types of systems have greatly expanded in the past few years. These days, business owners have options such as off-the-shelf databases, custom-built software applications, and everything in between.
A quick survey of Officemax.com shows that CRM systems such as ACT! 6 and Goldmine sell for around $900 for five users. But Matt Meents, CEO and founder of Edina-based Reside LLC, warns that there may be hidden costs, such as a yearly license fee, fees for additional users, and an annual maintenance fee that can cost up to 18 percent of the purchase price.
Although off-the-shelf software may not meet a company’s needs right out of the box, the software can be customized. In addition, because off-the-shelf products typically run off a server, hardware or software updates may be necessary in order to run the CRM software. Reside builds and customizes CRM systems for clients.
Products such as SalesLogix, made by United Kingdom-based Sage Group PLC, also offer hosted CRM systems, in which the software (and your data) is stored on a computer located at the vendor’s facility. The benefits to hosted CRM systems include no hassles with system set-up and maintenance. Like off-the-shelf software, hosted systems also tend to have tiered pricing, which is based on the number of users.
Revolution in progress
Today CRM is in the midst of a revolution. Although “typical” CRM software required manual input of data, today’s systems are continually expanding their capabilities, including capturing data for potential customers via the Web and automatically tracking e-mails and appointments made with customers.
Roseville-based Student Transitions Inc. uses its CRM system to track customer data, including the names, school names, grade point average, ACT score and other data of more than 200,000 high school students across the country. It also notes people with a disability that requires them to receive home care.
Student Transitions is the management company for its two subsidiaries: Student Paths and Student Experience. Student Paths shares information from interested students with the advertisers in the newspaper it distributes to high schools around the country.
Initially, says Saunders, the company was typing the data on the response cards into its CRM system (ACT!) themselves. But it took the company’s 15 full-time employees three weeks to enter 1,000 responses. Not only was the process time-consuming, but Saunders also felt that the software couldn’t handle the volume of data he expected to see as the company grew.
“It’s a great product off the shelf,” says Saunders of ACT!. “The big point would be that that would never be able to handle 400,000 names coming in.”
Student Transitions decided to invest in SalesLogix, which Saunders describes as “an ACT! on steroids.”
Student Transitions spent $10,000 on the SalesLogix product, which included a server license and $2,000 for each user. So far, Saunders estimates his company has invested $30,000 in the system.
Offshore data entry
The company also contracted with a firm in India to perform the data entry that had previously been handled by Student Transitions employees. The data that the company receives is 93 to 94 percent accurate, Saunders says. Although employees still need to double-check the data that comes back for accuracy, performing these checks is faster and more efficient than doing the data entry themselves.
After the data is checked, SalesLogix generates Excel spreadsheets that are then sent to each advertiser containing data from interested students such as their name, address and grade point average.
The new system also allows the company to track data over time, which ACT! couldn’t do, says Saunders. With the new system, Student Paths can see which schools have the highest response rate and which ones have had a sudden change in performance.
Not off-the-shelf
Menttium Corp. uses CRM software to manage its database of mentors and mentees. The Minneapolis-based company has a variety of programs to match senior business executives with upcoming business leaders.
"As we prepare to match mentees and mentors together, there's a lot of information that we require to match them," says Kim Vappie, COO. Menttium has 25 employees and does not disclose its revenue.
Participants in Menttium’s programs log on to the company’s Web site and enter information about themselves. They can also sign up for events and complete surveys through the site.
Menttium upgraded its system in order to be able to absorb data from the Web. But the unique nature of Menttium’s business mean challenges with finding CRM systems that work.
“We're not an off-the-shelf kind of company, so we have to customize anything we buy,” Vappie says.
The company’s system is integrated with Menttium’s e-mail system and can track and record e-mails that are sent to clients. It also works with the staff’s computerized calendars to track appointments. Vappie says there are also other capabilities built into the system, including invoicing, that the company hasn’t turned on yet.
Her advice to businesses looking to invest in or upgrade a CRM system:
“Find the right vendor to help you. I think that is your best and most impactful investment outside of the system itself."
But for all the promise of CRM systems, Kim Albee, CEO of Plymouth-based Einsof Inc., warns that CRM systems are a tool, not a self-contained solution.
"Most often, one of the challenges with CRM is that everybody's promised a silver bullet,” she says. “Buy a system and you'll instantly have customer relationships and you'll be managing them well.”
For Satisfaction Management Systems Inc., a Minneapolis-based market research firm, CRM is about more than just software.
"Our CRM system is more of process versus a system, so it’s not a piece of software per se, but it's how we manage our relationships," says Jeri Meola, co-founder and president. Satisfaction Management Systems has 11 employees and annual revenue of around $2.5 million.
Although the company uses Goldmine software to keep track of its clients, Meola says she considers the education of clients in the market research process to be part of the company’s CRM system as well. That, she says, is a result of the company providing a service, rather than a product.
"We're viewing customer relationship management from a service perspective, not from a product perspective,” says Meola. "We're tracking product life cycle as our form of CRM."
As an example, the company e-mails status reports to its clients every Monday, so that the progress of a project can be tracked. The document is sent in Microsoft Word so that clients can easily forward the message on to others within their own organization.
When it comes to giving advice about CRM to other service providers, Meola emphasizes that communication is good and surprises are bad.
"I think what's important when you're in a service industry is there's no surprises."
Kim Albee, Einsof Inc: 763.383.6081; ka****@****of.com; www.einsof.com. Matt Meents, Reside LLC: 952.835.1930; mm*****@****de.biz; www.reside.biz. Jeri Meola, Satisfaction Management Systems Inc.: 952.939.4310;****@*******ys.com“> jm****@*******ys.com; www.satmansys.com. Gregg Saunders, Student Transitions: 651.638.2693; gr************@****************ns.com; www.studentpaths.com; www.studentexperience.com. Kim Vappie, Menttium Corp.: 612.436.4595; ki********@******um.com; www.menttium.com.
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