Reaching the crossroads

18 May 2006

Judging by the surly ‘service with a snarl’ attitude you’d encounter in some Irish stores and coffee houses, Ireland’s position as a services-oriented economy seems questionable.

The linchpin of services is sales, or more specifically cross-selling. Nevertheless, it is surprising that the engine driving the sales efforts of global firms in the 21st century — customer relationship management (CRM) — is currently employed by less than 10pc of Irish companies, confirms David Larkin (pictured), general manager of Sage CRM Solutions.

Larkin points out that despite being deployed by so few Irish companies to date, the deployment of CRM is considered by these firms to be vital to their performance.

Over the past few months Sage has conducted a survey of more than 110 Irish companies that have deployed CRM technology. The survey covered a broad sector of Irish companies in industries such as construction, food, finance, agriculture, media, charities, transport and manufacturing. According to Larkin, even a few Irish politicians are using CRM to maintain a link with their electorate.

“It’s a perception issue. When we used to approach companies about CRM many would have replied ‘but I already have a database’. The reality is that CRM has nothing to do with software. It is a methodology for managing your business,” reveals Larkin.

Of the firms that have deployed CRM in their organisation, 24pc of the firms said they increased their effectiveness by 100pc. The survey found that 93pc of firms that deployed CRM also experience a better flow of information through their organisation. Larkin says a common problem in organisations is information being held by individuals and not being shared.

Another problem facing businesses is when an experienced member of staff leaves, often taking valuable knowledge and know-how with them. Larkin says the effect of this can be crippling to a firm and it can be weeks before things are back to normal and a replacement worker trained up.

According to the survey, 90pc of the participating companies say they can work with an uninterrupted workflow thanks to CRM. “The term for this problem is ‘corporate memory’ and when someone leaves, the company often struggles to maintain relationships. It used to take two weeks to train someone up. A good CRM system will have a new person up to speed in three hours,” says Larkin.

CRM, the survey claims (100pc of respondents), also leads to better organisation of information in a company. Some 84pc of the 110 companies covered in the survey said they are able to target specific customers better, deliver their message more effectively and keep costs under control.

The use of CRM also enables companies to reduce the number of databases they employ, which Larkin claims has a knock-on effect in terms of credibility and effectiveness. “Some 84pc say they are more credible when talking to customers. This is very important because you only get one chance to make a first impression,” he adds.

Some 77pc of respondents to the survey said they were better able to follow up opportunities and 80pc said customer satisfaction levels have improved. “In terms of customer retention, this is vital.”

If CRM is so vital, why then is it that so few Irish companies have actually deployed it? “Awareness is very low in Ireland,” explains Larkin. “But I believe that companies that have deployed CRM will never go back to working without it. It is important to remember that it’s not so much a technology but more a methodology. Companies can use it to better organise themselves and refine their approach to their customers.”

He points to successful deployments of CRM in Ireland such as that of estate agents Sherry Fitzgerald and also the Department of Foreign Affairs, which is using CRM to spearhead its ability to handle situations such as when people go missing overseas. “Some 88pc of companies that have deployed CRM systems believe they’ve got value for money,” Larkin concludes, pointing to a part of the survey that asks respondents what would happen if their CRM system was taken away.

Reponses include: “Our sales in a particular area would suffer badly; Impossible to function; I’d be lynched; A chaotic leap backwards; and Mayhem.” Oh, and my favourite: “Agghhh!”

By John Kennedy