Congratulations
To The CRM Excellence Award Winners
Before I embark on a look at the challenges of implementing a CRM
technology solution, I would like to take this opportunity to congratulate
each and every one of the companies that have earned the high honor of
being awarded a Customer Inter@ction Solutions CRM Excellence
Award. In the highly competitive market of CRM, it is extremely difficult
to gain such a high honor and consequently, we salute you on a job well
done. All the best on continued success to all of the honorees from the
editorial staff of Customer Inter@ction Solutions magazine, the
industrys first and leading publication to establish groundwork for
CRM/call center and customer interactions since 1982. Part 2 of the CRM
Excellence Award winners will continue in the August 2002 issue.
The Story Behind Reported CRM Failures
Last month, our cover story reported on avoiding the failure of CRM
technology and solutions implementations. Nevertheless, and in spite of
some admittedly high failure rates reported in the media, the CRM industry
continues to grow significantly and we continue to stand steadfastly
behind the judicious deployment of such technologies and systems.
Depending on the research source, the CRM market is currently valued at
between 25-35 billion dollars. The CRM market is considered immature at
this stage, which means many of the failures could be attributed to the
early adopter syndrome. In addition, I believe part of the problem
is due to a lack of understanding of what CRM means and unreasonable
expectations or a lack of planning on the part of the companies that have
installed new software, not on the software itself. If you understand the
essence of customer relationship management, you understand that no
company can live without it. CRMs raison dtre is that companies
live or die from repeat business. The Cardinal Rule of remaining in
business is that without satisfied customers there will be no repeat
business, and without repeat business, companies cannot exist.
Understanding this principle fosters the understanding of why, in spite of
an alarmingly high failure rate, CRM technology implementations continue
to grow and be a priority in worldwide enterprise applications.
Putting The Cart Before The Horse
Businesses need to understand that it is not technology per se that
governs customer satisfaction, but rather the human side that continues to
build a relationship between a vendor and a customer. The best advice I
can give to those of you who are planning to use or currently are using
CRM solutions in your enterprise is to focus even greater attention on the
human side of CRM. The development of relationships between your company
and your customers is paramount simply because 75 percent of all buying
decisions are based on emotion. Therefore, it stands to reason that if a
customer does not feel a special affinity with your company, he or she is
not likely to buy anything more from you. This is simple common sense and
nothing new. However, a common mistake in CRM technology implementations
is some people believe that simply having technology in place is the
answer to customer management, forgetting the importance of one-on-one
relationship-building and not planning adequately for adjusting their
business processes for the new customer-centric focus. You cannot simply
install a software suite and expect all problems to magically be solved.
CRM is not software and it is not simply business processes; it is the
combination of business strategy, software and processes that turn a
company into a customer-centric organization, one that truly listens to
what the customers say and provides them with what they want.
Relationship-Building Should Be Priority # 1
Successful business-building begins with relationship development
supported by technology to manage and provide vital information about
customers and agents, always realizing that the human factor must be
involved in each and every transaction. In plain English, nothing
substitutes people-to-people interactive communication, which is the
foundation of relationship-building. Todays CRM technologies and
solutions are designed to facilitate that principle, and many are doing so
very well, as evidenced by our CRM Excellence Awards published in this
issue.
Avoiding CRM Failure
A brief, step-by-step guide to successfully managing customer
relationships and judiciously deploying CRM technologies might look
something like this.
1. First, take a long, hard look at what your company does and how it
does it. Concentrate and define what your core competencies are, what you
provide your customers and what your customers want.
2. Next, look at what processes and technology you have in place
currently: what are they, how do they perform, what departments or groups
are touched by them, and how current or legacy systems can be integrated
into any new solution.
3. Define both short-term and long-term goals (with an emphasis on
long-term).
4. Come to a consensus from all departments of what they need and
expect from a CRM implementation.
5. Reinforce the fact that this will be a companywide change and get
the management of all departments onboard.
6. Evaluate software and services from several different vendors. Look
for systems that allow you to impose your business rules upon them rather
than ones that force you to adapt to theirs. Examine how the new system
will impact your partners, resellers and vendors.
7. Purchase the system.
8. Train.
9. Study feedback from customers and employees and implement valid
suggestions.
10. Train.
CRMSo VitalYet So Illusive
Having said all of the above, and with reference to an article entitled
How To Avoid The CRM Graveyard by Richard Early of COVANSYS
(published in the June issue), I would like to enumerate the following as
some of the other contributing factors to the high percentage of CRM
failures:
1. Lack Of Know-How It seems like every time a new concept comes
along that appears to be successful, many people jump on the bandwagon
without really knowing what they are doing. This, by itself, in my
opinion, is the biggest contributor to failures.
2. Implementing A CRM Strategy There is a tendency to wish for the
benefits of CRM while neglecting the principles that make CRM a success.
Many companies jump into CRM without adequately strategizing and keeping
the entire corporations needs in mind. It is imperative to analyze your
customer relationship needs and match system capabilities to those needs.
Failure to do this also contributes significantly to failure.
3. Haste And Lack Of Due-Diligence To the extent that CRM
technology solutions have produced many successful results, as evidenced
by our CRM Excellence Awards in this issue, many companies hastily,
without proper due-diligence, try to undertake a CRM venture to their
detriment.
4. Substantial Consolidation And Innovations As in any growing
business segment, consolidation occurs in technology industries, which can
and does often lead to their failure (please see my explanation of this in
my June 2002 editorial). This factor, plus continuous innovations, can
lead to significant end user failures. Lack of continuity at the vendor
level certainly increases the probability of CRM failure.
5. Unreasonable Expectations I believe systems and software are
often cited as failures simply because someone chose the wrong system for
the wrong reason. CRM implementations encompass a host of challenges,
including having the appropriate personnel and rules in place,
understanding and managing the scope of the project and managing the data
strategy. Once again, due-diligence on the part of the implemeter is to
blame.
6. Lack Of Proper Buying Strategy Because CRM encompasses many
departments within the corporation, input and requirements from all other
divisions are required before deciding on the CRM solution. In short,
improper buying strategy will contribute immensely to failure, obviously.
7. The Bottom Line If you are not an expert about every aspect of
CRM, selection and implementation, get a true CRM professionals advice
and dont wing it because it will not work.
Keep these ideas in mind and you will be well on your way to designing
a winning CRM strategy, but never lose sight of the fact it is the human
element in the equation that is the foundation of building lasting
relationships. As usual, I welcome your comments.
Sincerely,
Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
ntehrani@tmcnet.com
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