Back in June 2001, a Gartner colleague and I revealed that 55 per cent of CRM projects were failing to meet expectations and warned that this could rise to 70 per cent by 2003. Vilified as we were for this, many ‘experts’ since have taken time to study what is and isn’t effective in implementing CRM. A number of their reports have crossed my desk recently, so this month I have extracted some of the new learning.
The first thing of note is that although the term CRM took a dive during 2002/03 with many alternative terms invented, the concept continues to grow in importance. In the not too distant future a company’s CRM assets will be part of its market valuation. So learning how to grow those assets is imperative. Yet studies show that 60-70 per cent of companies are still struggling to achieve benefits. What does the research teach us about implementing CRM successfully?
1. CRM implementation is not a capability build project. It’s an evolving strategy to build up CRM assets. Implementing that strategy needs a phased programme of synchronised activity. Each phase’s activity should meet maturing customer objectives – phase one may fix basic problems and improve customer knowledge, whilst later stages will develop relationships, improve collaboration and reduce cost to serve. Many companies who struggle initially do so because the CRM objectives of different activity are not aligned and political tensions arise eg technology resources are far more sophisticated than relationship practices and lie unused. Brand promise is totally unsupported by the experience of customer service because of unaligned goals. (see Customer Centricity – David Rance – free and The Art of Change – Jennifer Kirkby – free)
2. The scope of CRM activity is not sales, service and marketing – this is seductively easy but is encouraging limited, silo thinking. Sales, service and marketing are misleading proxies for relationship building practices across the customer lifecycle (e.g. awareness, acquisition, development, retention). The scope of CRM has 3 tiers:
- the relationship practices, plus
- the integrated operational capabilities that support them and build effectiveness, (e.g. knowledge, process, strategy, metrics, organization) and
- the underlying resources that enable them (e.g. channels, culture, skills, technology, data).
There are many models detailing the scope of CRM, all are roughly similar e.g. Customer Management – Key Messages for Senior Managers – Neil Woodcock, Merlin Stone – free and Eight Building Blocks of CRM – Gartner – free.
3. CRM should not be project based. From the start CRM needs weaving into the fabric of the organization – you are ‘turning a tanker’ not building a new one. That means co-ordinating teams in their business as usual roles as much as taking people away to man projects. CRM should be owned corporately, and involve everyone in the changes so that all activity become customer focussed, all of the time – not just some of the time. One of the biggest barriers in CRM initiatives is lack of resource, so to start with rearrange and redirect what is already there with the objective of fixing some of the important problem areas in current customer experience – customers and employees will tell you what these are. (see Make your business Fast + Simple for your customers – Budd – free)
4. A CRM leader can be highly dangerous. CRM needs senior leadership but not any leader will do – even one who is passionate about customers. The important requisites of such a person (or persons) is that they:
- are in it for the long term, and not just driving for short term goals
- really understand the scope and evolving nature of CRM
- realise that their role is one of change management -to enable others and help resolve tensions and conflict.
(see Impact of Customer Management on Business Performance – QCi – free)
5. CRM is not just important. Managers need to see CRM as imperative to their own objectives, not just important. Executive’s accountability for customer experience should increase as they climb the organisation, not decrease as they get further from the front line. Their rewards should be firmly linked to the achievement of customer objectives and eradicating the conflict caused by overlapping functional objectives.
6. The biggest contributors to business success are the least tackled CRM implementation activities. A lot of surveys have tried to establish the CRM activities which make the biggest difference to business performance (eg CRM Works – IBM – free and How much are customer relationship management capabilities really worth - Accenture – free). The findings have a lot of synergy and are listed in order of importance:
- Change Management – motivating people to align behind and deliver a brand promise. Encouraging customer service competencies – often found in people who are rule breakers.
- Customer Service & Experience –evolving flexible, adaptive, relationship building practices that customers value and which support the customer lifecycle. To start with relationships are often adversarial, once the basics practices like complaints management meet hygiene standards you can evolve motivating and collaborative services.
- Metrics and Goals – ensuring incentives and measures are in line with current corporate customer objectives and not at odds. Monitoring what is important to customers now, through feedback, not what is traditional.
- Value Proposition and Strategy– competitively positioning a differentiating, branded, value proposition in the market place – and adapting it to environmental changes.
7. There is no such thing as CRM best practice. The right way to implement CRM is unique to every organisation. It depends on understanding the market structure, how relationships are built in your market, competitor’s position on CRM, the maturity of current capabilities, geographical region, and organisation size. Even within a multinational company some practices like data integration can be implemented globally, but others like culture and regulatory issues need to be done locally.
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