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How to maximise CRM ROI

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23rd Jun 2008
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Spending on customer relationship management software is high and growing, but with increasingly tough economic conditions, how can companies ensure they maximise the return on this investment? Whilst it is often overlooked, data is the essential foundation for an effective CRM application, argues Tony Sceales.

Maximise CRM ROI

By Tony Sceales, Celona Technologies

Research by Merchants Consulting indicates that 18% of UK customers have withdrawn their custom from a business based solely on a bad experience with a call centre, and 69% more would consider doing so. Elsewhere, more than half the European consumers surveyed recently by Oracle said they felt let down by ineffective use of CRM technology.

British customers were the most likely to be critical, with 40% saying the service they received from call centres was ineffective. Oracle’s senior vice president for CRM, Loic le Guisquet, commented that the contact centre managers Oracle had spoken to highlighted better quality information as key to ensuring improved CRM. “Businesses need to go beyond the simple retention of customer information, and start to apply intelligence to the vast amounts of data they hold in order to meet the public’s expectations," said le Guisquet. "Turning information on customer behaviour and their life events into actionable intelligence enables the business to sense and respond to their needs.”

"Spending 90% of the time, money and effort on implementing and configuring solutions means that there is too little left to deliver the really good quality data needed to support the CRM initiative."

Modern CRM systems undoubtedly offer extraordinarily complex and sophisticated functionality for doing just that, but while cutting-edge CRM technology is an important element in creating a great customer experience, there are other essential components as well. These include well-trained staff, streamlined and effective processes, and good quality and accessible customer data. As le Guisquet has highlighted, data is the essential foundation for an effective CRM application - but one that is easily overlooked.

A great CRM implementation should be seen as a journey for the business, and should embrace all the component elements required for success – not just software. Spending 90% of the time, money and effort on implementing and configuring solutions means that there is too little left to deliver the really good quality data needed to support the CRM initiative.

Optimally, CRM requires a wide range of data. But the problem many organisations face is that this data is more than likely distributed across a range of siloed datasets. The trend to outsource and offshore call centres, and the move to managed services of one type or another, has further increased the complexity at the data layer. And, quite frankly, it is common for companies to hopelessly overestimate the quality of their data – discovering too late that it is a lot grubbier and a lot more fragmented than they had assumed.

While it’s understandable that acquiring new CRM functionality that promises to deliver a vital competitive edge is the focus of most projects, it’s important not to sweep the dirty data problem under the carpet in the enthusiasm for renewal. In the long run, leaving data issues unresolved will simply undermine all the gains promised from upgrading your CRM solution.

High CRM failure rates

CRM project failure rates are scandalously high according to many industry commentators. Over the years, the blame for CRM projects failing to deliver against expectations has shifted from technology, to process and organisational problems, before finally settling on data issues. Failure is rarely due to only one issue, but I think it’s fair to say that while good implementations might still have their data ‘challenges’, it’s rare to see a bad implementation where bad data isn’t a big problem.

"Over the years, the blame for CRM projects failing to deliver against expectations has shifted from technology, to process and organisational problems, before finally settling on data issues."

So how do you boost your chances of success? I would argue that you are much better off delivering a narrower scoped project well, rather than attempting to deliver a much wider scoped project and failing. It’s always possible to build on what you have achieved going forward, but delivering a less ambitious project successfully enables you to prove your business case and start enjoying benefits faster. Modern third-generation migration tools provide a range of functionality that can help you improve your chances of success by delivering not just data migration but business process migration. They achieve this in a number of ways.

Firstly, they decouple the technical problem of moving data from the business processes that use this data. Historically, these processes were written as code, but separating the business processes from the data vastly increases flexibility. By defining business data sets (as distinct from database tables, rows or fields), much more granular migrations can be achieved, meaning that it’s no longer necessary to perform 'big bang' migrations unless you want to. You can move customers over according to the priorities set by you, and in the quantities set by you.

Visibility is also a priority, and staff should be able to see what’s happening, drive what’s happening, respond to issues or errors, and set thresholds (such as error rates). Increased visibility puts business staff in the driving seat, ensuring that business and technical goals remain aligned throughout.

So if you’re one of the companies that are in the process of upgrading or consolidating their CRM in the next 24 months and you want to avoid the twin traps of poor user adoption and poor CRM performance then the message is clear: ensure that you get to grips with your data.

The right direction

Here’re a few ideas to point you in the right direction:

  • Don’t assume that data will be clean, consistent and available – chances are the only place it will look like this is on your power point slide!

  • Recognise that data migration is both a business and a technical problem – putting the business in the driving seat means that before we ask "how do we migrate data?" we first answer a series of important related questions including: why are we migrating data? what data should be migrated? when should it be migrated? It is essential that business drivers, not technical ones, should take precedence and define the solution and approach selected.

  • Plan for change – unless you can somehow freeze your data, in a dynamic environment it’s going to keep changing. This introduces the possibility of data reconciliation issues whereby your source and target data don’t match.

    The critical importance of getting the migration right from a business perspective was articulated at a recent British Computer Society meeting by BT’s Phil Dance. He highlighted: “Increasingly our business case is going to depend on how good we are at getting our data across. A bad data migration ultimately means a bad customer migration, and in a competitive market that’s very bad news.” This is why it’s so important to ensure your CRM upgrade delivers against all the benefits promised on your power point slide, and why it’s also so important to solve the data migration issues that could otherwise undermine it.

    Tony Sceales is chief technology officer at Celona Technologies.

  • Replies (1)

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    By kateitpr
    09th Jul 2008 12:36

    There are few mid-market organisations who have not dabbled in some form of CRM in the past few years. However, in far too many cases, the deployments have been ill thought out and have gained little staff commitment. Indeed, a significant number of CRM projects have been derailed by the resistance of sales teams. This has left many organisations with a tainted perception of its value.

    However, no company today can possibly deny that CRM technology is a critical business tool. It is, therefore, time to throw aside the disappointment of past CRM projects and to create a single view of the customer; designing more valuable customer-facing processes and achieve far more effective measurement to create a closed loop.

    Businesses must deploy a CRM solution with a strategic approach. Delegating CRM requirements to middle managers, who are so often limited by their tactical and departmental view, is clearly madness and will only result in further failure. An organisation needs to focus on its key business challenges and objectives. It is only by aligning the CRM deployment with these strategic objectives and assigning monetary values to them that an organisation can truly determine a justifiable CRM budget and set a realistic ROI timeframe.

    Organisations have been down the tactical route before; so why repeat the mistakes of the past, albeit with far more functional software? While implementing a system can be challenging, and expensive, if paired with a positive and strategic approach, an organisation will most certainly gain favourably from the installation of CRM.

    John Haigh,
    Head of CRM,
    CPiO Limited

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