Chapter 1: Microsoft Dynamics CRM 3.0 Overview

We know you're eager to get into the details of how Microsoft Dynamics CRM 3.0 works and learn more about its great customization capabilities. Before we can jump into those details, we need to cover a little background information about Microsoft Dynamics CRM 3.0 and introduce some of the core concepts and terminology you'll use throughout this book.

Life Without CRM

Think back to a particularly bad customer service experience. Maybe you called a customer service phone number and were transferred to five different people, and every single person asked you the same questions, so you had to keep repeating the same answers over and over again. Or perhaps a salesperson pulled together a proposal for you but forgot to include your preferred-customer pricing in the quote. Or maybe a credit card company mailed you an application for a new account, even though you've had an account with that company for 10 years. You probably thought to yourself, "Why doesn't this company know who I am?" Does this sound familiar?

As its name implies, the goal of customer relationship management (CRM) is to enable businesses to manage each and every customer experience better. More importantly, CRM strategy recognizes that customer experiences span over time and that a typical customer might interact with your business 50 to 100 times in the course of your relationship. Ideally, your company could provide each customer a personalized experience based on the customer's unique history of interactions with you. For example, you wouldn't ask long-standing customers if they would like to open an account; when customers call your customer service department, you wouldn't have to ask them to answer the same questions over and over again; and your most valuable customers would always receive preferred pricing.

Important 

The purpose of CRM is to enable businesses to track and manage all of their customer interactions over the lifetime of the customer relationship. CRM is a business strategy, and companies typically use a CRM software system as a technology platform to help implement their CRM strategy, processes, and procedures.

In today's competitive business environment, mistreated customers can easily find other vendors or suppliers that are eager to replace you. However, if you give your customers a personalized experience, they're more likely to value their relationship with you and continue to patronize your business. The CRM philosophy makes so much sense, so why do so many companies force good customers to suffer through bad experiences every day?

As you probably know, it's very difficult for companies to embrace a CRM strategy and create consistently great customer experiences. Some of the factors that make a CRM strategy difficult to implement include:

• Multiple customer management systems Almost every company uses more than one system (such as sales tracking, warehouse management, or financial accounting) to run its business. Most of these systems can't easily communicate with each other to seamlessly share data. Therefore, you can imagine how salespeople using a sales tracking system might not know that a customer just opened an urgent customer service issue in your customer service system.

• Remote workers Even if your company is lucky enough to use a single system to track all of your customer interactions, remote and offsite workers might not have the ability to access data in the customer management system.

• Rapidly changing business processes You might recognize the saying, "The only thing constant in life is change," by French author François de la Rochefoucauld. This expression really hits home regarding the business processes of our Internet-enabled world. No sooner does a company finalize a customer management process than it must reconsider how that methodology will change in the next month, quarter, or year. Rapidly changing business processes challenge employees to adjust quickly, but most CRM systems can't react and adjust as quickly as the business needs it to.

• Multi-channel customer interactions Customers expect to be able to work with your company using any communication channel that they prefer. With the proliferation of different technologies, these customer communication channels might include Web sites, phone, fax, e-mail, mail, and instant messaging. If a company wants to track all of a customer's interactions, its customer management system must work with each of these technologies.

• Difficult and rigid systems Adopting a CRM strategy usually requires a company to select a technology system as its customer management platform. Earlier CRM systems earned the reputation of being difficult to use and complex to install. Even worse, companies could customize their CRM systems to their business needs only if they invested large sums of money and time in consultants who would customize the software for them.

CRM isn't a particularly new concept and it's earned something of a bad reputation among businesses. These are just some of the reasons responsible for its less-than-stellar track record over the years.

So what would happen if a company could successfully implement a CRM strategy and software? What types of benefits might the company receive?

• CRM could track customer interests and purchase history over time and then proactively generate new marketing initiatives for customers based on their unique histories.

• CRM could log a history of a customer's service requests so that a service technician could easily view all of those requests when the customer called with a new issue. Reviewing a customer's service history might help the technician resolve a customer's new issue much more quickly.

• A manager could view all of the interactions with a customer across various functional areas such as sales, marketing, and customer service. People typically refer to this cross-functional history as a 360-degree view of the customer.

• Marketing managers could analyze and report on the effectiveness of their marketing lists and campaigns to determine how they should re-allocate future marketing investments.

• An analyst could use business intelligence tools to segment customers and prospects to identify trends and create predictive models for sales and customer service planning.

This list doesn't include all of the benefits of CRM, but it's clear that a successful CRM implementation can provide many short-term and long-term benefits for any business.