Small Business Customer Relationship Management

Key CRM Concepts You Need To Understand

February 7, 2008

I want to get you up to speed not so much on features, but on broader concepts that you need to keep in mind when selecting CRM technology.

Fit With IT

It’s a good idea to pick a CRM system that your IT staff are capable of supporting. That said, be careful not to dismiss very good choices because your IT staff may not be familiar with current, main stream technologies. Being that you’re a small business, your IT staff should be reasonably
up to speed on main stream small business technologies.

You need to look at how well the CRM technology fits in with the skills and competencies of your IT staff. For example, if your IT staff is familiar with MS SQL Server (common for small businesses) as a database back-end and the CRM solution is Oracle based (usually used in larger
Enterprises), this could cause some problems. Certainly, your IT staff will not have a comfort level (at first) of working in that new environment for back-ups and database maintenance issues.

Contact vs. Account Centric

There are two basic paradigms for CRM systems:

  1. Contact Centric: In Contact Centric systems, the primary organization is around independent contacts.
  2. Account Centric: In Account Centric systems, there are two levels to the basic organization: a company or account layer to which multiple contacts can be related.

Reasons for Compromising on Technology

Contact Centric

In a contact centric system, the database is organized around individual contacts. So, if you have dealings with 3 different people all from the same company, you would have 3 different contact records and in each record would be the company name.

There may be ways to relate different contacts together, but these will be in the “workaround” class. A Contact centric organization makes sense if you are dealing with individuals and you do not need to do such things as look at an organization’s combined history. It is very difficult/clumsy to track company related information separately from contact information.

For example, if you want to track information about a company (e.g. sic code, # employees, annual budget, etc.) separately from contact related information (e.g. favourite hobby, home phone number, spouse’s name, etc.). there isn’t an easy way to do that:

  • Under which contact do you store the company information,
  • Which contact becomes the primary record,
  • Do you store the information under both contacts…which makes updating difficult.
  • Do you create a “contact” record to serve as the company record and somehow relate the contacts to it?

Account Centric

Account centric CRM systems have a layer above contact, the organization or account, that can tie multiple contacts together. This has the advantage of being able to track company-related information entirely separately from contact-related information. This approach is usually easier to:

  • See all opportunities for an account/company.
  • See combined history.
  • Do address updates.
  • See the organization and all its contacts in one view.
  • Report on company vs. individuals easier.

Unless you are working in an industry where you only need one contact record per account, choose an Account centric CRM system.

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