Avoid the Four Perils of Crm

Topic :Avoid the four Perils of CRM

Why is CRM important?

Makes gathering customer data swiftly

Identify the most valuable customers

Increasing customer loyalty

Helps in creating customized products and services

How successful is CRM and why?

55% of all CRM projects don’t produce results

Ranked bottom three for satisfaction of 25 popular tools

Reason for failure is that the managers don’t understand  points -what they are implementing, the costs incurred and time spent on them

Cost of implementing CRM = an estimated $60 million to $130 million

Time taken to implement CRM = anywhere between 90 days to 24 months

Definition of CRM

CRM is NOT a software tool that will manage customers relationships

CRM is the bundling of customer strategy and processes to build  customer loyalty and increase corporate profitability over a period of time

CRM may be supported by relevant software

Peril 1: Implementing CRM before creating a customer strategy

Softwares can help in solving problem provided that a traditional customer-acquisition and retention strategy has been conceived of and implemented

Effective CRM is based on old-fashioned segmentation analysis

CRM without segmentation is like building a house without an architectural plan

Technology that affects customers must be aligned with an overarching strategy

Case study :NY Times

Peril 2: Rolling out CRM before changing your organization to match

For better relationships ,Company needs to revamp the key business processes  that relate to customers

Ensure changes in the customer-facing processes and the internal structures and systems before investing to CRM technology

87% failed CRM programs have been attributed to lack of adequate change management

Adopt customer-centric philosophies, change the structure and processes and alter the corporate cultures accordingly

Case Study :Square D & GE Capital

Peril 3: Assuming that More CRM technology is better

CRM can be managed without huge investments in technology simply by motivating employees etc

Assumption of a high-tech solution being better than low tech one is a myth

Well functioning CRM programs dot all points of technology spectrum :low tech ; Mid tech & high tech

Simple, inexpensive solutions can be more effective than complex, techie solutions

Case Study :Grand Expeditions –Healthy hybrid tech ;Square D –High Tech

What CRM Really Comprises of ?

Peril 4: Stalking, Not wooing, Customers

Most important “to maintaining relationships”

Focus on Build relationships with right customers the right way

Relationships are two-way streets; failure to build relationships with customers who value them means losing your customers to your competitor

Avoid building relationships with disinterested customer

Case study : Dallas Morning News

Learnings from Failure

CRM is not just another fad; it is a powerful idea, difficult to implement

Try understand CRM and then implement it to avoid failures

Successful CRM depends more on strategy than amount spent on technology

Effectively lead and  manage change, showing CRM support teams how to achieve their  goals through new processes

Sum up : CRM is Customer Strategy which involves where employees  are going and why ? & to align business process supported by technology later

Case Study : BMC Software

References

HBR Feb 2002 issue

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