By Chris Lindsay, general manager for business applications at BT Business

Customer Relationship Management (CRM) is a powerful tool, but also open to misuse.

This article explains that while CRM systems can help profile promising customers, business need to be careful that they don’t invade their privacy.

Research from BT has shown that the recession has led businesses to rethink the way they operate, with around half of all businesses saying they have changed for the better. Furthermore, approximately 30% of businesses have said that they have benefited from using technology to market themselves better to customers.

CRM software can help companies market themselves to potential and existing customers but businesses need to make sure they don’t start to irritate rather than attract customers.

Don’t ask too much

Asking for too much information from your customers in one go can be off putting, and you may just amass a large volume of data that’s not even useful. In the quest for instant results, we are in danger of scaring the customer away by assuming they’re much more engaged with us than they are ready to be

Don’t lose customer data

Your business reputation is going to suffer if you lose customer data, by accident or to hackers, and you must have policies to protect it. A great advantage of a CRM system is it puts your customer data in one place. This makes it easier to execute and manage your policy. Businesses should look to put in place a management policy to see how, why, where and who has access to your customer data.

Don’t bombard with information

Be clear about why you are communicating with a customer. What are you trying to get them to do next or think about next? All too often, we send them everything because we’re convinced they must be interested in what we have to say — and in general they’re not. Focus on giving them the right information at the right time.

Don’t use every channel to contact customers

Customers self-select in what they let you know and how they want to be contacted. Respect the preferences that they have expressed by using the contact method they asked for. Ignore this, and you run the risk of irritating the customer, rather than interesting them.

Do use the information

Don’t just use CRM data to send ads, use it to manage customers. If you’ve got their data, it’s your job to know what they buy and why. Use this as an opportunity to sell to them in the future. Next, use it to manage the business. With CRM, you’re able to make real-time decisions and answer the question “what’s in my pipeline”, and is that going to allow me to close the business I need this year? CRM can also be used to store interactions with customers through social networks and blogs: when you react to a customer and follow up quickly, they’re impressed with the fact that you’re interested in them — whether or not they’re ready to engage with you. That’s always something that surprises and delights customers.

Do keep it legal

You must comply with the Data Protection Act and Privacy and Electronic Communications Regulations. Companies have to identify themselves upfront, make it clear what information they are collecting and why, store that data safely, answer customer queries about that data and stop marketing to customers who object. If you’re marketing directly to individuals, in many cases they need to agree to it; you can let them opt in, opt out or get their consent in another way. You should already have a process for consent, whether that’s buying lists where customer consent is already given or in your sales process. For marketing, especially email, you must have the opportunity for the customer to opt out.

Do change processes and tell people

Think about the change to processes a CRM system may bring. If you haven’t got a clear process for how you sell or how you service the customer, a new tool won’t help. And it’s not just the process that needs careful thought; people are as important as the process. You need to think about how to get staff using the new system rather than clinging to their own contact books. You reap rewards from improving the way you manage the business, if you’re at the top or if you’re a salesperson, but it needs a combination of both the carrot and the stick to help people adopt the system in order to get those benefits.

Do keep it clean and up to date

If you’re using customer data, you need to keep it up to date and avoid duplication. A lot of CRM tools have features for de-duplication and for finding leads that look similar to the ones you’ve already got. It’s good practice for everybody who is working on those leads and opportunities to check for duplicates. Additionally you should check your data with the Mailing Preference Services lists of users who wish to opt out from.

To find out more about BT’s range of cloud-based CRM applications visit http://business.bt.com/broadband-and-internet/business-applications