CRM is not a software

Crm is not a software, first and foremost crm is a business strategy, business strategy that answer the question how to create loyal, satisfied, profitable client, how to increase your value proposition, how to defeat your competitors, how to guarantee your future business success. And this notion I want to bring to all my past and future client. Software is just a tool, one facet of the crm.

The big problem is that customers, mostly, don’t understand this, especially in fledgling crm markets as in Ukraine, for example. They think that what they need is just a software package and in many times it contains only customer database with names, addresses and other flat information. They don’t know who their customer is, they don’t think how to increase the value proposition, they don’t analyze competitors and their products.

But how we can achieve business goals, increase profits and competitiveness of the business just by installing software tool? We need to change how we work, how our business processes work, how our people work. And this problem is bilateral: clients can’t get their business goals, crm consultants can’t differentiate yourself from partner network colleagues, software creators and distributors.

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Stop selling, start helping

Today, in tough economic times we all suffer from such problems as: increasing customer buying power, competition pressure, decreasing customer demand, market share and sales volume. That all make our business’s future blurred.

So, we understand the need of changes, and first of all we have to change the way we work with our clients. I suppose, there is needless to discuss the importance of good customer service and quality product for retaining our today clients. But what I want to stress in this post is how we work with new, potential customers, how we attract them in our “sales funnel” and convert them in real clients.

The main cause of low conversion rate, besides non-effective marketing and non-qualified lead generation, is a mistake we doing through sales cycle. And the biggest one is how we treat out potential customer. Many sales people treat them like an object, object for making sale, not as a person with their needs and problems. They try to push their products, pitching it and using their cruel sales tricks, psychological and manipulation techniques. That tricks are commonly known and I can admit that maybe every decision-maker could recognize them. For me, this is enough to talk several minutes with such sales person and I can recognize all this tricks. And off course after that, I will not buy from him anything.

Because the people don’t want to be manipulated, all what they want is to solve their problems, achieve their goals and accomplish their dreams. And the best way for sales people is to take part in this, trying to help them in their path.

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In general, to be successful you have to satisfy your customer's needs better then your competitors, the value of your product/service need to be higher and you should offer a complex, not product, but problem-oriented solution.

The problem arises when we communicate to customer our product's features, but not the benefits that are brought by our product. We should remember that customers don't need your product, they want to solve their problems.

So, how we can achieve this full understanding of customers needs and in this way create more appropriate product portfolio? Do we need any sophisticated software tools? No, we don't. Only what we need is to change the way how we work with clients by making shift from one-way to two-way communications. By establishing "customer connection", communicating with our clients, involving them in our company's operations (marketing, R&D, customer service) we can not just create more successful market proposition but also increase customer satisfaction and loyalty.

Think smart! Act smart!

What do I mean under this statement? To answer this question we have to consider a current economical situation, an implications of financial crisis and their impact on business. It’s clear that the way we do business has changed. Increasing competition, customer power, risk, uncertainty, market turbulence, slashing demand, financial resources availability, market share – this is just a few problems business has encountered.
So, the only way to keep and increase you market position, improve financial performance and achieve strategic goals is to adapt your business model for this realities. And you have to do this in SMART way. First of all we have to take a systematic approach for our business model, we have to analyse all top business processes, supply and value chain, all functional areas: marketing, sales, finance, IT and of course corporate strategy. Without this, with only partial, incremental changes we will not achieve our goals.
Take for example CRM. We can’t greatly increase sales volumes and marketing effectiveness just by implementing CRM software without positive changes in value proposition, marketing communications, staff behavior and so on. We have to take a systematic approach to customer relationship management by starting our efforts from CRM strategy formulation, customer life cycle and marketing channels analysis, value proposition. The big mistake in CRM initiative is inward company orientation and understanding CRM just as IT technology without customer focus. We have to recall Peter Drucker’s words that the purpose of any company is to create a customer, so all our CRM efforts should be concentrated on maximization of customer needs satisfaction.

Hello world!

Hello, everyone!
This is my first post, so I want to appreciate all of you who is a part of this global social internet community and who will read my blog. Several words about me. My name is Alexander. I'm an economist, IT specialist and CEO of Smart Capital Invest LLC, business consulting and technology company. Now I want to make a review, announcement of my line of interests and future posts themes. Entrepreneurship, innovations, business and economical trends, contemporary IT technologies and business concepts as enablers of competitive advantage and business success. Also, other part of my interests concentrates on human behavior and psychology, because economy in broad sense this is first of all people, with their emotions, fears, psychological motives. So, I hope, my ideas will be interested for you.
Thank you.