ERM helps to drive revenue by leveraging key relationships.
Posted Feb 1, 2006
Many firms lose business deals because the competing firm has a powerful advantage: preexisting relationships. People prefer to do business with a business they know and trust, or know through a trusted relationship. To compete, companies must find out who knows who in their firm, and leverage each of those valuable relationships. Successfully identifying and using employee relationships provides opportunities to get in the door, secure new business, and generate more revenue.
How does a company transform all individual employee contacts into a trusted firmwide resource? When the senior team decides to embark on this type of company-wide initiative, it often appoints the CRM team to drive it; that team attempts to expand the CRM system beyond sales and marketing to become a central repository for all relationship information. However, this approach typically doesn't achieve the expected results and leads to disappointment. A CRM system should be a key data resource to manage customer relationships, but it cannot be the only data resource for managing all company relationships. There are three major reasons why:
Not all staff members participate in the CRM system.
Those who do use the system only enter a portion of their contacts.
The time and manual data entry required to create and maintain a comprehensive CRM system is not sustainable.
Innovative Companies Have Introduced Enterprise Relationship Management to Better Leverage All Relationships
Global sales organizations and firms in the professional services industries, whose relationships are the backbone of the business, have adopted enterprise relationship management (ERM) to leverage preexisting relationships. ERM is designed to eliminate the manual labor of keeping your professional contacts fresh and relevant for potential business opportunities.
For example, now there are tools available that use a Google-style interface, so users can easily search the name of a person, company or industry. The ERM tool would automatically analyze multiple data sources including CRM systems, HR ,and marketing databases, address books, and email traffic patterns to produce comprehensive, accurate results. The tool identifies who knows who by listing colleagues' names and the contacts they have at ABC Company, and ranks the strength of each relationship, which allows users to instantly identify which of their colleagues has the strongest relationship to the target contact.
Other ERM solution enables firms to maintain a community of former employees and leverage their extended relationship network. For some firms, their alumni are a good source of new business and low-cost, experienced rehires.
Because firms aren't aware that ERM solutions are available, they often turn to CRM or use an ad hoc approach such as keeping contact information in public folders on Microsoft Exchange, using a business development database, or populating Excel spreadsheet to track relationships. Unfortunately, these ad hoc approaches require considerable manual input and upkeep, are not comprehensive, and do not maintain a contact owner's privacy.
ERM for Managing All Professional Contacts
ERM provides more inclusive, comprehensive, and accurate results than stretching a CRM system to manage all relationships. Following are some guidelines to consider when evaluating an ERM solution to integrate with your current CRM system:
Total Employee Participation
Unlike CRM, which is typically only deployed to sales and sometimes marketing, every staff member has the opportunity to participate in an ERM system. Including everyone significantly expands a firm's extended relationship network. Recently, a consulting firm executive discovered that a colleague's administrative assistant had a key relationship to the executive decision maker at a target account. Identifying and leveraging that relationship helped the firm get in the door and close the deal.
The Ability to Capture All Relationships
Over 80 percent of valuable contacts are not entered into CRM systems. Employees simply don't feel comfortable providing all of their family members, former colleagues and classmates into such a public system. But, if asked, they would be willing to share this information on a case-by-case basis. ERM enables all relationships to be identified by analyzing multiple sources of information including CRM, HR and Marketing databases, address books and email traffic patterns. Contact names and companies can be quickly and easily searched and identified, while maintaining a high level of privacy. The decision to make an introduction or to provide contact information remains in the hands of the relationship owner.
Automated Data Entry
Professional services firms, who bill their clients hourly, are particularly reluctant to spend hours on data entry tasks. An ERM tool should automatically catalog, search and analyze information, eliminating the human errors that result from manually entering information into a system. Just weeks after implementing an enterprise relationship management tool, a financial services firm with 50 staff members uncovered more than 30,000 connections and is in a much better position to leverage its extended relationship network.
When pursuing new business, relationships are a critical enterprise asset. Having a corporate Rolodex to quickly, easily, and accurately access information about who knows who provides a significant competitive advantage. CRM was never intended to capture all preexisting relationships that every employee brings to the firm and cannot deliver the inclusiveness, comprehensiveness and accuracy that ERM delivers. Using ERM and tapping CRM as one of the data sources better position professional services firms and worldwide sales organizations to leverage their full relationship network to get in the door, secure new business, and generate more revenue.
About the Author
Geoffrey Hyatt, CEO and cofounder of Contact Networks, focuses on helping professional services companies maximize sales by leveraging their most valuable asset, their extended network of business contacts. ContactNet, the company's flagship enterprise relationship management tool, was developed based on Mr. Hyatt's more than 15 years of experience in management and consulting with high technology and investment firms. Mr. Hyatt holds an MA in management with distinction from Kellogg Graduate School of Management at Northwestern University, and a BA from Dartmouth College. Please visit www.contactnetworks.com
Sponsored By: Marketo and Real Magnet
Sponsored By: Genesys, Avaya, Verint, and Aspect
Sponsored By: Informatica
Sponsored By: Verint®, Confirmit and inContact