Customer Relationship Management
CRM solutions have been developed to provide for increased customer satisfaction and greater sales and marketing effectiveness. Global competition means that companies now realise that the customer is both the most valuable, and vulnerable, asset. The Internet has created this scenario, and in return the Internet has allowed for the development of solutions: Customer Relationship Management solutions.
Henry Ford could be forgiven when he confidently stated that the customer could have any colour they wanted as long as it was black, but today's business environment is much less forgiving of the manager that underestimates the importance of what the customer wants. If your organisation can't meet these demands, there will be a queue of international and/or domestic competitors waiting in the wings that can. This is the real challenge of survival in the e-business age.
The Internets ability to allow customer access to market information has forced a major shift in power to the customer. Customers can compare prices and services at the click of a mouse, and source whatever they want, when they want it, from virtually anywhere in the world. In addition, customers can now interact with businesses in many more ways, including:
- Call centres
- Support desk
- Field sales
- Store attendant
- Online Store
- Voice Over Internet session
- Real-time text chat session
- Dealer network
- Fax
In order to ensure customer satisfaction and maximise each opportunity that presents itself from a customer interaction, enterprises need to coordinate all of these customer 'touch-points'. By knowing all previous interactions and transactions that the company has had with any given customer, regardless of channel, and by delivering that information to front office staff in real-time, the next time that customer interacts with the company, the company will be in a position to both satisfy that customer on the one hand, and drive revenue by selling complementary services and products on the other.
CRM solutions provide for the functionality to be able to integrate these 'touch-points' and to analyse, process and report this information to front-line sales and marketing departments at each customer contact. Organisations gain a personalised, or unified, view of their customers, in order to better understand their customers unique demographics and create customer profiles to be used by the sales and marketing departments.
While most CRM systems have a lot of functionality, experience has proven that any CRM implementation project should be managed in a staged approach starting with core CRM functionality that addresses the most frustrating issues facing the support, sales and marketing departments, rather than management or enterprise-wide functionality. This approach ensures the vital involvement and buy-in right from the outset of the end users of the system as they will gain immediately from the project. Additional enterprise-wide functionality will be relatively simple to implement having established the core functionality, proven the system at an individual issue level and gained the buy-in of the users.
Benefits of CRM
On the one hand, some organizations that reengineer their CRM processes are reporting revenue increases of up to 51%, margin improvements of 2%, decrease in the cost of sales of as much as 46%, reductions in sell-cycle length of 25%, and increases in customer satisfaction ratings of 20% or more. On the other hand, there are claims that up to 70% of all CRM initiatives generate minimal gains or no improvements at all.
In 1999 Deloitte Consulting conducted a global survey of over 225 firms that engaged CRM projects and the following summarises the results of that survey;
|
Question Top 4 responses from left to right.
| ||||
|
CRM Project Goals? |
Improve sales effectiveness
|
Improve customer service/loyalty |
Improve communications |
Improve forecasts |
|
Targeted users?
|
Field sales
|
Sales management |
Marketing |
Customer Support |
|
Planned system usage?
|
Company office |
When remote |
With customer |
|
|
CRM planned functionality?
|
Opportunity manager |
Contact manager |
Office suite |
|
|
Best resources for vendor information?
|
Consultants |
Other users |
Articles |
Internet |
|
Best evaluation steps?
|
Implementation plan |
ROI Analysis |
Customer visit |
Custom demo |
|
Decision criteria? |
Ease of use |
Functionality fit |
Customisability |
Price |
|
Project cost breakdown?
|
Hardware |
Customisation |
Software |
Support |
|
Toughest challenges? |
Managing resistance |
Defining system specifications.
|
Getting users productive |
Identifying Process holes |
Reccomendations |
Analyse Processes first |
Get users involved |
Get executive commitment |
Get expert help. |
*From the executive white paper: A Guide to Marketing, Sales and Service Transformation. 1999. Deloitte Consulting in association with CSO Forum.
Five points of advice
- Avoid infatuation: A common cause of poor CRM implementation is the classic mistake of falling in love with the technology itself rather than looking critically at how it can help execute go-to-market strategies and processes. One service provider purchased a particular CRM package solely because it was the one used by its leading competitor. The thinking was: If it's good enough for them, it's good enough for us. The trouble is that different companies have different sales strategies and processes, and therefore different technology needs.
- Use a phased approach: First, understand your customer's needs, sales channel preferences (e.g., direct sales, telesales) and profitability to you. Second, define your coverage strategies -- how you plan to increase target customer acquisition, retention, and penetration. Third, use this information to carefully evaluate and select technology and vendors.
- Develop your go-to-market strategy: Based on the outcome of the first two steps, revise your go-to-market strategy, that is, the plan for acquiring and growing customers. This strategy needs to include the definition of your target customers as well as the design of customer contact channels (such as sales, marketing, and customer service), jobs, and processes. You should also define your metrics for managing organisation performance.
- Clarify the role of CRM: Decide how CRM technology should support your go- to-market strategy. One way it can do this is by increasing efficiencies through the automation of time-consuming steps and elimination of redundant steps. Another way is by sharing customer information across all channels. This enables all the sales, customer service, and marketing resources interacting with an account to have the same information, such as product purchases, order status, and other facts.
- Prepare for action: A key step in identifying the right technology enablers is to evaluate existing technology capabilities, map out the desired functionality, and identify the technology requirements needed to close the gaps between what already exists and what is desired. Once the potential requirements have been identified, they can be prioritised based on their impact. The final step is to develop a business case that clarifies the estimated return from investing in new CRM technologies to drive specific go-to-market objectives.
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