Management Guide: Implementing Customer Relationship Management

How does it happen?

It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organisation must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages to them at the right time to fit their needs.

Next, the organisation must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centres, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, and a large commercial savings account with one bank, it makes sense for the bank to treat this person well each time it has any contact with him or her.

Are there any indications of the need for a CRM project?

In general, there aren’t any.. But one way to assess the need for a CRM project is to count the channels a customer can use to access the company. The more channels you have, the greater need there is for the type of single centralised customer view a CRM system can provide.

How long will it take to get CRM in place?

A bit longer than many software salespeople will lead you to think. Some vendors even claim their CRM "solutions" can be installed and working in less than a week. Packages like those are not very helpful in the long run because they don't provide the cross-divisional and holistic customer view needed. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components.

How much does CRM cost?

In 2001, a survey of more than 1,600 business and IT professionals in US, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than US$500,000. That would appear to indicate that CRM doesn't have to be a budget-buster. However, the same survey showed a handful of respondents with CRM project budgets of over US$10 million.

Examples of types of data CRM projects should be collecting

What are some examples of the types of data CRM projects should be collecting?

Responses to campaigns
Shipping and fulfilment dates
Sales and purchase data
Account information
Web registration data
Service and support records
Demographic data
Web sales data

What are the keys to successful CRM implementation?

Break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Starting with a pilot project that incorporates all the necessary departments and groups that gets projects rolling quickly but is small enough and flexible enough to allow tinkering along the way.
Make sure your CRM plans include a scalable architecture framework.
Don't underestimate how much data you might collect (there will be LOTS) and make sure that if you need to expand systems you'll be able to.
Be thoughtful about what data is collected and stored. The impulse will be to grab and then store EVERY piece of data you can, but there is often no reason to store data. Storing useless data wastes time and money.
Recognise the individuality of customers and respond appropriately. A CRM system should, for example, have built-in pricing flexibility.

What causes CRM projects to fail?

Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, primarily because its sales force resisted all the previous efforts to share customer data.

If a company is just starting with a CRM project, what should they do?

If you're just starting out, you want to build you're requirements first. Define the problem, understand what's going to solve that problem and understand the functionality of that solution.

In other words, in order to increase your number of marketing campaigns this year, you are going to need individual customer profiles. That's just one example, but once you understand that it's a requirement, you can find the technologies that support that particular functionality. That's the right way to do it: the requirement, the functionality, then the tool.

Future of the CRM market space

CRM software is on its way to reaching a saturation point—those who are likely to invest in CRM already have. According to recent research by Cambridge, Mass.-based Forrester Research, as the CRM market returns to modest growth over the next few years, companies will change the way they collect and manage customer data in order to realize the full potential of CRM.

Forrester estimates that CRM revenues will grow from $42.8 billion in 2002 to $73.8 billion in 2007, a compound annual growth rate of 11.5 percent (characterised by Forrester as “modest”). Marketing automation software will make the most gains, growing at a 14.5 percent clip from 2002-04 and then rising to 17 percent thereafter. August 7, 2002 - CXO Media.

Home

Updated on Sept 04, 2002

Management Guide: Implementing Customer Relationship Management

Contents