CRM – The Comeback King

Customer relationship management, or CRM was once touted as the way of the future for all businesses. If the customer was truly king, CRM would be the way we courted royalty and retained their support. But when the anticipated gains didn’t materialize many business analysts were willing to dismiss CRM as just another passing fad that failed.

Early CRM implementations tried to cover too many aspects of too many businesses. They were oversold and loaded with overpromises about what functions they could handle and were found sorely wanting in the performance area.

Most early CRM solutions were primarily sales force automation systems. They had little connection to the company’s marketing requirements and only scratched the surface of what CRM was supposed to do. The result was a disappointing return on investment – a once-promising CRM project that management and investors saw as an expensive failure.

However CRM never really went away. It’s such a good idea that its early failures caused many people to suspect that maybe the fault lay in the implementation rather than the concept, so they tried harder to make it work and to a great degree have got it back on the road to success.

A CRM system can be a valuable and very powerful tool. It’s often the only practical way of handling a large customer base and being able to give customers the service they want and that the business wants to give them.

The majority of SMEs do not have a CRM solution. Because of this, information is not shared; it stays locked up in various departments or even on certain PCs around the office. How much better it would be if their credit control, sales and marketing people and systems across the organization could act together.

CRM is not really a single solution. It is a package of several solutions that aren’t all needed by every enterprise. Particularly at the SME end of the market it needs to be a robust form of managing customer contact that interfaces smoothly with the people in the business.

CRM can, if needed, also be applied to such functions as analysis of marketing results, recording sales performance and calculating customer value. It can be a source of customer information that is accessed and used as needed by everybody in the firm. It’s all a matter of how the installation is designed.

It begins with the organization deciding just what it is that CRM is needed to do. The CRM system is then built around those needs. Trying to fit a proprietary CRM system to an organization is the wrong way to go about it, which is one reason for the long list of early failures. CRM is a journey, not a destination.

When companies begin their CRM journey they want to gain customer loyalty by enhancing their relationship with customers. The end goal is to achieve longer lasting and better quality customer relationships that deliver greater profitability.

This means that companies have to be sure they understand their customers before designing their CRM systems. What measurements need to be taken and tracked to determine what those customers want and how they wish to be treated?

Another key aspect of CRM is that it is capable of personalizing each customer�s experience with the company at every touchpoint. There’s no value in having a customer treated differently by different departments. There’s even less merit in having a system that lets the account department recognize a repeat customer but leaves the sales team in the dark. A customer’s perceptions of the business should be pleasantly reinforced by each contact.

Here is a brief list of the steps to follow before commencing the design and implementation of a CRM system:

1. Determine the quality of the existing customer data. Is it good enough to use as the basis for personalizing the company’s contacts with customers? It needs to be reliable and accessible so the system can work with it.

2. Define the objectives of the CRM system. Precisely what is it to achieve? What information will it obtain and deliver?

3. How will the offerings of the business relate to customer needs?

4. Where will the CRM system create personalized customer experiences and how will it do this?

5. What are the CRM system’s metrics that can be monitored to determine its rates of success?

Each of these steps identifies an area for research and evaluation. A committee should be formed that represents every department of the business to answer these questions in as much detail as possible. The accounts department will have entirely different demands from sales, but both sets of demands need to be met.

CRM aims to provide a single view of customers and prospective customers across the organization. It also aims to give each customer and prospective customer a favorable experience at every touchpoint, including those where the business reaches out to contact customers.

It can only do this if the system is designed with an integration of marketing, sales and customer service functions. The technology to do this has existed for several years; the application of this technology has in the past been overly focused on sales to the detriment of other business areas. CRM never failed; it was just badly let down.

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Copyright 2005, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com