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I believe " Successful CRM/CXM " is about competing in the relationship dimension. Not as an alternative to having a competitive product or reasonable price- but as a differentiator. If your competitors are doing the same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over the long haul.
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Dinesh Chandrasekar DC*

Friday, September 24, 2010

Demystifying Myths of CRM


Dears,
When I read about CRM failure rates, I tend to focus on the positive – a majority of companies now are at least somewhat satisfied with their CRM deployments. Why? The front office is full of free-wheeling knowledge workers — impatient, process-averse, and led by revolving door executives. So, why are the expectations so much different than reality? CRM benefits are still oversold, and the work and time (and organizational change) required is still woefully underestimated. Trying to find a short cut to customer delight isn’t new; But the myths of CRM still seem to be getting in the way of effective deployments.
· Myth 1: CRM can be bought. Despite vendors’ claims of “best practices,” the reality is that the “secret sauce” of CRM comes from your own customer processes, not the functionality of your CRM product. Lack of functionality or channel coverage can hurt – and newer industry specific solutions are more likely to include the industry terminology, functionality, and integration points you need. But for the most part, CRM technology is only a foundation upon which a CRM strategy can be built and evolved.
· Myth 2. CRM can be built. A CRM system is never done. Companies change, products change, customers change. And that means that CRM is less about initial deployment and more about ongoing incremental improvement. In the new Enterprise 2.0 world, the best CRM solution is the one that most easily allows the business user to tailor and evolve their own CRM vision (without heavy IT support). A realistic “best by date” for any given CRM deployment is about 12 – 18 months – don’t start if you don’t have the resources to continue.
· Myth 3: CRM can be delegated. It’s no wonder that CRM implementations sometimes underperform executive expectations when strategy work is delegated to line employees or consultants. Changing CRM processes is HARD. Only executives can weigh the tradeoffs between customer experience, staff time (and cost) and strategic importance. Executives need to be involved up front to set goals and priorities, ensure adequate IT staffing, check in through the process to mediate departmental conflicts and set priorities, and be front and center during and after implementation to lead adoption and assess (and act on) results.
· Myth 4: A 360 degree view is a CRM strategy. While understanding everything about customers is a great long term goal (or at least desire), it doesn’t prioritize what customer information to get first, provide incentives to line workers to get it, or ensure that the information will be effectively used. A good CRM strategy is specific about the business goal (revenue, retention, etc.), the target customer (existing or new customers, business type, industry, geography), the desired change (more orders, deeper relationships, higher satisfaction), and the steps (business process and organizational changes) – and customer information (metrics and data) — to get there.
· Myth 5. CRM means good customer data. Customer data management is a separate discipline, and companies relying on vanilla CRM applications to capture high quality customer information will likely be disappointed. Good data defaults and pick lists and data quality add-ons for address standardization and duplicate detection can all help improve the quality of CRM data. So can getting the right data loaded up front -especially if the business users own the data and the results. But only data stewardship and ongoing user education (and monitoring) will make CRM data a true corporate asset for the long term.
· Myth 6. CRM follows vendor product boundaries. Pesky customers often interact with multiple departments across multiple channels – some of which aren’t even part of the front office. That means that a key part of selecting CRM software is making sure it integrates well with the operational systems and channels with which customers interact. Any task that customers can request or perform themselves should be CRM aware – whether that’s ordering a product, requesting service, managing a project, or participating in a forum or event. The best CRM is in line – performed in the process of accomplishing a task with or for the customer.
· Myth 7. Metrics and reports are a follow-on project. Few people would consider a surgeon who operated in the dark without instruments. And yet, companies often seem perfectly willing to implement CRM with very little exploratory work to see what’s wrong or follow up plan to assess results. It’s not enough to decide to increase sales. Concrete metrics — such as number and quality of sales leads, lead freshness, cycle time and win/loss rates, and repurchase or upsell rates — can help management prioritize what to do first, measure CRM gains, identify adoption issues, and target areas for further improvement. Build a data warehouse when you can – but don’t wait to get basic progress indicators in the meantime.
· Myth 8. Social CRM is different…but the same. There have always been customers (and front office employees) who are influential beyond their own purchasing power or revenue contribution. Social CRM technologies allow companies to find and facilitate important peer-to-peer interactions — such as online recommendations and discussions, community-based service, and idea sharing. But without a clear purpose (awareness, lead generation, service resolution, referrals), it’s hard not to drown in the social cyber noise. CRM principles – such as starting with the process and desired outcome, deciding what to measure, recording/ tracking each interaction, and incorporating results (such as “top influencers”) in other customer interactions – make the difference between “cool” and game-changingly effective.


The bottom line – choose based on business strategy



Few months back I helped a government organization to select a CRM solution. The decision came down to two very different finalists. One met their current requirements at a economical cost. The other was more aspirational and in line with long term business strategy and little more expensive. They choose the more aspirational product, which better matched the strategy they’d defined. The Head of Business then identified the additional people resources needed to execute the strategy – and tied both together in the funds request to the board. They have a long journey ahead of them – but they’re off to a good start.


What myths ring more true to you? Are there other myths you’d add to the list. Please share your thoughts in the post/comments section



Good Luck
Your Partner and Companion ( P&C)


DC*


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