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Recently read an article about how Best Buy has used CRM to come up with
brand new store configurations. They collected millions of customer
records in a CRM database and then put on their data mining hardhats and headed
into the great unknown. After a lot of digging and marrying of sales
transactions to demographic data they decided that female customers, especially
moms, are a very underserved market. These women are interested in
appliances, technology and media to enrich the lives of their children and
exercise equipment. So Best Buy rolls out a store configuration to meet this
need. With a very happy ending - increased sales.
Now I am not trying to make fun of Best Buy. To the contrary this is a very
profitable way of leveraging CRM in their marketplace. You can't
really understand your retail business unless you have the ability to mine a
mountain of data and understand buying patterns of specific demographic
profiles.
Then I read an article about how an Ice Cream store franchisor is going
to use CRM to communicate and collaborate with 1000 or so franchisees. A
very different use of CRM. Now I don't think that the big retail example and the
franchisor/franchisee example are two ends of the spectrum when it comes to CRM,
but they are far enough apart to give us a sense of the completely different
ways in which a company can use CRM, based on the specific needs of their
business model.
Certainly if you are a huge retailer, who has perhaps billions of
transactions, you are not going to opt for an on-demand CRM solution. You
need some major infrastructure to support the level of data analysis for this
business model. On the other side, if you have a thousand franchisees who
all need access to the same CRM system, how are you going to accommodate them
with an in-house client-server solution? It can be done, but it wouldn't be
pretty and an on-demand solution looks like a better bet.
The upshot? CRM, unlike it older brother ERP, must be more flexible and
adaptable. Double entry accounting is a well understood body of knowledge. What
you expect from ERP is stability and specific functionality. The market now
considers ERP the staid and stable older brother (how times have changed!) and
CRM is the rambunctious, hyper little punk that makes everyone a little
uncomfortable.
This explains why CRM raises eyebrows in some quarters. It does not feel like
ERP, with which we have become familiar. CRM requires more time and effort to
understand its value proposition. The most important lesson is that CRM,
whatever your business model, adds value to relationships with customers or
clients. But the Big Retail CRM is not going to fit the Engineering Firm
CRM.
CRM, unlike ERP, is really business model specific. Before any company starts
looking for a CRM system they need a complete inventory of how they currently
interact with customers or clients. Do you have highly paid technical staff who
deliver services? Or retail staff who sell to strangers on the floor? CRM as a
collaboration tool, or as a sales transaction engine? Fortunately there are a
lot of options in the marketplace and you won't have a problem finding one that
fits. First understand that the CRM acronym is not helpful and that you need a
highly specific requirement to make a good match. | 
