September 6, 2016

CRM Basics #1: What is a CRM system

I remember creating my first Microsoft Access database at school, when I was perhaps ten. The task was to create a database to store the football allegiances of kids at school.

I remember setting contact number as the ‘unique key’, and not understanding why that mattered. I also remember populating my fledgling database with a few records, all of whom supported Tranmere Rovers.

I had an over-active imagination, even then.

When you peel away all the features, bells and whistles, all modern CRM systems all have at their core something similar to my football-fan database. Most use a set-up of relational database tables to store data.

When you strip away all the shiny bells and whistles that’s the plain, unglamorous reality.

Your business swims in data, all the time. A CRM system will attempt to store all the relevant prospect and customer data you need to make decisions. This could include contact information, contact interests, engagement metrics, purchases made, referrals made, relationships to other contacts.

If you don’t capture the data as is appears it quickly evaporates into the atmosphere, never to be seen again. The job of your CRM system is to capture the data you need before it evaporates, and convert it into usable, actionable information.

Data itself has no meaning; you could think of data as one’s and zero’s on a spreadsheet. Data only becomes information when you apply meaning to the data.

Your CRM system might look at the one’s and zero’s, and identify a high value customer who hasn’t clicked on any of your emails in four months. That’s information, because you can do something with it.

The input of a CRM system is the raw data of all the relevant customer interactions happening around you.

A CRM system converts raw unusable customer data into usable, actionable customer information. This information should be at the centre of your customer-facing operations, available to your customer facing staff at the right time and in a usable format.

The output of a CRM system is action based on this information. Actions could include emails going out, mailers going out, to-do notifications. You can even push a contact into a remarketing audience based on information from your CRM system.

Inputs and outputs are equally important. The outputs are the things you want to happen. The input is the data you need to make those things happen.

Different CRM systems cater out of the box to different inputs and outputs. Most businesses never take the time to identify their inputs and outputs, which leads to shoddy CRM decision making.

Take the time to identify your inputs and outputs before you start looking at bells and whistles.

Rob Drummond

Rob Drummond runs the Maze Marketing Podcast and Maze Mastery. Rob specialises in content production, ad creation, storytelling and CRM systems. He has two published books, Magnetic Expertise and Simple Story Selling, affordable on Amazon.