Make Money or Save Money
Within the same week I was told by two different clients, quite emphatically, that CRM can only produce increases in revenue but not reduce costs, and that CRM can only reduce costs but not increase revenue. So, the big question is which point of view is correct? I say, “let them eat cake!”
When I look at my own experiences I can recall clients who have wanted to make more money, but ended up only able to reduce costs. I have some clients who have wanted to reduce cots but have only been successful with improving revenue. And then of course, there are those clients who were not able to achieve either.
So, what to make about all of this? Taking a look at a recent editorial in the April issue of CRM Magazine some trends are reported that offer up a little insight. In this case, those organizations that are looking to increase revenue from CRM are focusing on the sales force. This certainly makes a lot of sense because if you use CRM and SFA tools to improve efficiency it will either lead to better use of time driving better sales or it will lead to sales people being able to spend less time at home or in hotel rooms doing admin tasks. But, it won’t reduce any cost (although the sales force is happy about having more time with their families).
Back in the 90’s a lot of my CRM experience was focused on call centers, much of which were dedicated to customer service. Unless you use CRM to migrate service personnel into blended sales and service roles, your only hope for bottom line results is through driving out costs. And, I believe there were plenty of examples of success where CRM improvements within the call centers led to cost reduction – mostly in the form of being able to scale the call center to handle growth without adding comparable headcount.
Taking this all into account, it may be that the answer to the question of whether CRM is good for making money or saving money is that it can do either one, but it might depend on which function you are supporting with the program. But, to complicate things, let’s throw the marketing function into the mix.
CRM software and process improvements can help drive lead management efficiencies, plus automation can dramatically drop the cost of managing campaigns. At the same time, analytics that drive better targeting and evaluation can improve lift. Marketing can realistically achieve both benefits of making more money while saving money.
Getting back to those strongly convicted clients of mine - you can have your cake and eat it too.