Ten Common Mistakes To Avoid When
Purchasing CRM Software
BY PAT NESTIUK, SARATOGA SYSTEMS
Your company is losing market share. Your sales force is inefficient.
Your marketing is antiquated. Your customers are noticing. You know that
an all-inclusive view of your customers' buying patterns would enable your
company to make better business decisions, react quickly to market changes
and, ultimately, increase revenue. You know your best option is a
top-of-the-line CRM software purchase. What you may not know is how to
choose from the hundreds of solutions that exist today.
The best CRM solutions are based not only on facilitating the
coordination of sales, marketing, customer service and support, but also
on the customers' preferred channels of interaction -- a salesperson, call
center or the Web. To avoid costly oversights and set a more lucrative
direction for your CRM software, get your company on the right track by
learning from some of the most common mistakes made during the CRM
purchase.
Mistake #1: Unclear Goals
Setting clear goals is the first step in choosing the right CRM
solution. If your goals are multifaceted, you may never get out of the
starting gate. Typically, the more complex the goal, the more complex the
CRM system.
Are you looking to increase sales, have more effective support
resolutions, obtain higher customer satisfaction ratings -- or all of the
above? Be specific and clear, then think about the tactical questions. If
you automate sales with a SFA (sales force automation) solution, what
impact should your firm expect to add to the bottom line? How long will it
take to realize the ROI? Should you look for a flexible solution that can
be adapted to your specific and future requirements? How far and wide
might this solution be deployed -- departmentally, regionally,
internationally?
Once these ideas are thought through, your senior management needs to
put a stake in the ground and establish clear business goals, objectives
and timelines expected from the CRM implementation.
Mistake #2: Weak Sponsorship
Your executive team needs to position the CRM implementation as the
strategic cornerstone of your company, as a business-led initiative with
justifiable benefits. As such, it requires sponsorship or buy-in across
the company. It won't be successful if the CRM initiative is confined to
marketing or sales channels because customers interact with all touch
points of the organization, including distribution and shipping, customer
service and the Web. Your initiative simply will not succeed unless
sponsors at the highest levels across the company embrace its day-to-day
requirements.
Mistake #3: Poor Communication
One of the main reasons CRM proj-ects fail is that participants don't
fully understand the purpose of these projects, nor the companywide
benefits that could result from them. The lesson here is to develop a plan
that communicates the specific benefits to each department, and then
follow-up with training across disciplines to reinforce communications.
Successful CRM is founded on excelling in two areas: understanding your
customers and focusing your operations to serve them through all points of
contact. Beginning from the vision statement and strategy formulation, the
customer should be the focus of the company's communications activity.
Every employee in your organization needs to be intimately aware of his or
her critical role in serving that customer and should be rewarded
accordingly.
Assemble a team to explore the companywide processes that are going to
be impacted by the CRM implementation. Survey customers for their input
and make them members of the team. Communicate the goals throughout the
company, along with benefit statements as to why this was a major focus
for the company. Distribute throughout the company internal marketing
materials that state the benefits and progress of the effort.
Mistake #4: Misunderstood Customer Needs
At which points do your customers make contact with the company? How are
the interactions really working? How can you improve the way you are
responding to customers? If these answers are quantifiable, the findings
of this planning, research and analysis should flow smoothly into the
design and development of the system.
If your answers are vague, your internal person might analyze the
affected processes, only to understand toward the end that they didn't
realize the customer wanted something else. For example, instead of
requiring the customer to go through multiple screens from a Web-based
solution to make changes themselves (which is what the company thought was
desired), the customer wanted to have the choice of calling, sending
e-mail or contacting the company directly. Customers made mistakes,
incomplete forms resulted and the system failed.
Mistake #5: Blurry Workflow
To avoid this and get the most bang for your CRM buck, you will need
to study the way different groups capture and use information gathered
from a CRM solution. Having a clearly outlined workflow that shows how
information is captured, stored, updated and accessed will keep your
business operating. Having a clear understanding of your partners'
processes will keep your business flourishing.
Did you analyze the business process desired by your customers and
partners? Have you considered providing incentives to the data gatherers,
amidst the changes to their processes? Today, sales, marketing and
customer service departments work as separate entities in many
organizations and are faced with divisional boundaries to focus on
customers in a coordinated fashion. CRM provides a common platform for
customer communication and interaction in such cases.
Mistake #6: Confused Priorities
If the technology does not have the flexibility to grow with your
changing needs, and if it does not optimize your communications with
customers and partners, then what was the point? Different CRM solutions
have varying functionalities, capabilities, strengths and pricing
structures and are better suited for certain organizations, industries and
user requirements. Your business drivers and market sector requirements,
as well as your company's deployment needs, customer size and employment
levels will ultimately dictate the CRM solution and service providers your
company should evaluate.
Here are some priorities to consider. When choosing a CRM vendor and
solution, take into account how the flexibility and scalability of the
technology match your unique needs and adapt to a variety of departmental
processes and requirements. Choose the system that optimizes your
interactions with customers and business partners to achieve your goals.
Don't overlook the expertise that analysts and public reports can provide.
Evaluate the cost structure for the software and services, and consider
the deployment time and cost for adapting the solution to your needs. Talk
with your peers at other companies using the vendor's CRM system to learn
their experiences firsthand.
Mistake #7: Mismatched Partners
The GartnerGroup advises companies to be as diligent in the search for
a well-matched partner as they are in the hunt for the ultimate software.
If you don't understand the vendor's CRM solution in its entirety, nor do
you know the vendor's partners, you might wind up with no solution at all.
By choosing a vendor that has in-depth experience in your industry and
solutions that match your requirements, your firm will be better
positioned to tailor the solution for a wide variety of uses.
Mistake #8: Lack Of Awareness Of Human Tendencies
Keep your eyes open to the world inside your company. If you don't
convey the CRM benefits and reinforce them with incentives, sales support
representatives won't use the system, data won't be input properly and
sales opportunities will be lost.
The right hand needs to know what the left is doing; otherwise, the
customer is fumbled. Take the situation of the caller who notifies your
sales support department that he or she is the new customer contact. Sales
support uses its own database and doesn't update the companywide,
customer-centric marketing database. So when the marketing manager sends
an upgrade promotion to the wrong individual at the customer firm because
marketing does not have the new contact name, the result will be a missed
opportunity. It's important that functionality be built into the system so
that each group using the system benefits, making their jobs simpler and
more streamlined. If everyone in the company uses the CRM system, the
system will serve as an incentive to keep the data current and facilitate
data sharing between departments.
One way to avoid this mistake is through incentives that are available
through the system, allowing the sales person to see exactly what
commissions they could make on a particular approach. Make it simple,
clear and easy to use. Reinforce CRM by keeping the message in front of
every department, every day, for every customer of your company. Make it
your company mantra.
Allow dedicated time for training on new CRM software and for
addressing the cultural change related to buying in to a customer-focused
strategy. Change should be introduced in a well-managed and supportive
environment, like training and educational sessions, as well as workshops
that demonstrate how the CRM system will work. Plan for training and
acceptance workshops before the system is ready to be deployed. This needs
to be a forethought, not an afterthought. Consider using a professional
organization to help effect the change and deliver the training.
Mistake #9: Inadequate Resources
Now that you have set achievable CRM goals and recruited the right
proj-ect team to manage its selection and implementation, don't make the
mistake of not setting aside adequate funding to support the effort. CRM
is time-consuming and requires a significant commitment across the
organization. The GartnerGroup says that through 2003, 65 percent of
enterprises will underfund the vendor evaluation process, resulting in
inappropriate choices or project delays.
Don't be fooled into thinking that the system can be administered on a
part-time basis by an administrative person with little or no background
in systems administration. Pick a strong individual with a solid technical
background who will be an advocate for your CRM system. The system
administrator should proactively support users and continually look for
ways to improve the system and incorporate changes needed by the evolving
business requirements.
Mistake #10: Lack Of Quantitative Measurements
If your department is measuring the success of its CRM activities based on
one criterion, and another division is gauging on another, inconsistent
reporting will result, and you will have no true sense of its success or
failure. Agree to measure the same areas at designated milestones. You
might look at response rates, data capture rates, increases in orders, the
number of contacts used to close a sale, or at a higher level, the
increased revenue, increased market share or improved customer
satisfaction ratings. Your business needs to set the parameters and then
adjust them as the company develops new business goals and objectives.
Ensuring The Best Scenario
When it becomes apparent that your company needs to purchase a CRM
solution, and you've confirmed that your company is ready to focus on
improving individual interactions with your customers, then you can begin
the planning process. Just try to avoid the mistakes of your predecessors
and the bottom line will show immediate positive reactions. Your company
will share more timely and better information flawlessly across the
company, employ a more efficient sales team and serve more satisfied,
loyal customers.
Learning from your own mistakes is good. Learning from others' mistakes
is even better.
Pat Nestiuk is VP of Technical Services at Saratoga Systems,
overseeing all technical services, including hot line support, customer
education, consulting and customization services.
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