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CRM Journey
The Differences Between Sales Force Automation and Customer Relationship Management

The road to CRM starts with Contact Management, morphs into Sales Force Automation, and may ultimately lead to full blown CRM.

quote Man is a singular creature. He has a set of gifts which make him unique among the animals; so that, unlike them, he is not a figure in the landscape – he is a shaper of the landscape. quote

- J. Bronowiski

What is the difference between Sales Force Automation and Client Relationship Management?

Molding your destiny rather than being led to it.

Your startup began with Contact Management, Microsoft Outlook, and then moved to Sales Force Automation. Many businesses never leave that stage. Why? Revenue continues to grow and so do profits. It may have been a painful journey to get to the kinks out of the SFA software, but now it’s working. People resist change, and if the business is growing, well - you know the old adage – If it ain’t broke, don’t fix it.

For other businesses, a alternate path occurs. They’ve identified processes that work and utilized the SFA software to enforce and maximize them. But for them, the more successful they become, the more disharmonious the relationship between the Sales, Service, and Marketing departments. Marketing plans campaigns and informs sales and the ordering department two days before the kickoff. Sales scrambles to respond albeit in scrambling mode, and deals slip through the cracks. Procurement is late and confused because there wasn’t enough lead-time. Service is flooded with calls from bewildered new clients. The old 80/20 rule kicks in and you lose that one client who makes up a high percentage of your revenues.

What makes one firm stay at the SFA stage while another decides to advance to CRM? Usually pain. Excruciating life-threatening pain. Sometimes vision.

To play the music, to create the reactions instead of responding after the fact, everything must work in concert and function to a corporate pulse. Marketing, Service, Sales working hand in hand, each feeding symbiotically off the others. The tool for this purpsoe is Client Relationship Management.

Making sure no sales prospect falls between the cracks, but not knowing why they’re loyal, and what will keep them coming back, that’s SFA. With SFA, you don’t have the complications of involving marketing, fulfillment and service, measuring successful campaigns, building on what works and retaining customers. You automate the processes that are there. It helps. It’s reactive. It identifies your failures but does not pinpoint what works. Reactive, that word pops up a lot – because most successful businesses plan - but deviate from the plan when the unexpected occurs. 

Customer Intimacy, a 360-Degree View of Each Client
With CRM we have an infinite loop, marketing driving sales, service driving customer loyalty, shared information targeting customer interests so intimately that marketing can become more pinpointed, bumping sales, assisting clients, and the loop repeats, ad infinitum. A true concerto soothing the savage profit driven beast, which pounds in the heart of every entrepreneur.

The level and repository of customer intimacy varies across industries and executive teams. In a direct selling entity such as Avon, each member of the sales force interacts intimately and directly sells to the customer. Since Avon differentiates itself from other cosmetic entities who sell through wholesalers and retailers, here, the most intimate client knowledge resides with the individual sales person.

A company like Amazon on the other hand, also sells directly to the client, but software systems house the repository of client knowledge. While the Avon representative will build and refine knowledge of the end-user of the product line through face-to-face contact, Amazon automates and tracks patterns based on previous orders. Whether your firm sells to wholesalers or retailers or directly to the client, having a 360-degree view of the client is vital to retaining customers and increasing customer share. We all know the old adage about the costs of adding a new customer versus losing one.

In this Internet driven communication age, most companies manage multiple sources and channels for building customer intimacy, such as credit card databases, specific SEC industry profiles, web cookies to track patterns of Internet usage, and histories of Internet purchases. Utilizing multiple sources and channels interactively, and constantly modifying that customer profile rapidly is the key to maximizing the customer experience and maintaining a competitive edge. Will your chosen CRM solution be able to build and refine that customer profile? Is it designed for multiple sources and channels? Obviously, Amazon and Avon cannot implement the same CRM solution, their business processes are vastly different. But, could each of them maintain their competitive edge without them? Not in this century.

Channels of communication include anyway you touch that client; email, fax, telephone, site visits. Consider consolidating the data from your current channels of communication and evaluate any others not used such as Electronic Data Interchange (EDI). If you are in the retail or wholesale business and plan to market through Target or Wal-Mart, they won’t do business any other way.

Staying ahead of the competition translates to a growing customer base, which in turn grows revenue. Customer intimacy, CRM, the ultimate key to success delivers through multiple methods.

Increased sales efficiency and effectiveness. Decreased sales costs.
Why? Honed marketing. We know what works, we learn from our mistakes. CRM software measures the success of our marketing campaigns and gives quantifiable Return on Investment (ROI) statistics so we can constantly increase the productivity of successive campaigns. Automating the campaign process typically results in lowering sales costs. There are many other hidden benefits which better your ROI; the ability to focus sales force training and knowledge produces a more productive sales force, which in turn can give you the ability to shorten the sales cycle, which in turn results in more accurate forecasting, which in turn allows Just-In-Time inventory deployment. The host of other hidden benefits that result from all of this begins to grow in scope, from the ability to plan for new hires because you can predict the success of a marketing campaign, to the impact on payroll and Human Resources, an infinite cycle repeatedly honed.

Increased Customer satisfaction.
Why? Maximized employee productivity, clear business processes, measuring and monitoring at each touch of the client, these all result in increased customer satisfaction. A happy client is generally a loyal one. If you cannot measure your service successes and provide pleasant methods of resolving support issues, that client simply goes elsewhere. Put simply, it’s easier to sell to someone who has already bought one of your products or services than it is to persuade a new client onboard. Documenting and automating simple processes to make your client interactions consistent, especially in the area of service or support allows you to refine the processes and retain customers.

Increased Profits.
Normally, this could be considered a quantitative measure, but in many cases, the perceived business value is a future, which cannot be measured. Take the instance where accurate sales forecasting results in better business decisions. We know how much to buy, when to order, how many new hires are necessary to meet the forecast. Documented best practices to train and support employees means a new hire can hit the road running. Nimble, informed measurements mean the organization can shape its destiny, not simply stay ahead of the competition, but create new opportunities. How do you measure the impact of the above?

It’s a given, the more specific your metrics, the more accurate your decisions. How do you think Starbucks knows when and how many to staff for the morning rush? Designed into their systems are measures by detailed time increments. Cups of coffee per minute, types of drinks ordered between 8:00 and 8:15 enable a manager to make staffing decisions appropriate to the rush and keep inventory appropriate for that specific Starbucks location. A successful CRM implementation takes a tailored approach and includes metrics that drive critical decisions.

Publicly traded companies gravitate more to CRM than privately held ones. SEC driven statistics can put a wavering stock price onto the pink sheets if a company misses its forecasts completely or repeatadly. Disaster for the company, but justification for implementing a Client Relationship Management if it will result in more accurate forecasting.

Increasingly, new technologies breed new methods of selling and marketing. Being able to take advantage of these is crucial in this information driven age, and is almost impossible without some software solution and in particular true CRM software.  More CRM Journey


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