It is a truism that each company is unique. What is often not realised is that each therefore needs to approach Customer Relationship Management (CRM) in a manner that suits its own circumstances and business needs and not those that are convenient for its CRM solutions suppliers. Consequently a standard CRM solution that meets the needs of every company does not exist; irrespective of what the software vendors say. To achieve maximum effectiveness each solution has to be ‘tailored‘ to fit rather than being ‘off the peg‘. This is true whatever the industry.
However, there are some fundamental rules that apply to the planning and implementation of all CRM programmes. These are often referred to as ‘core activities‘ and are fundamental to a CRM project’s success. The root of their importance lies in the fact that they are not sequential, but rather interdependent and mutually reinforcing, and thus require consideration throughout the project and in particular at its inception.
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For example, a fundamental aspect of any CRM project has to be the way and scope, in which the employees are involved. CRM requires that a truly customer-focussed culture be developed throughout the organisation and not just in the customer-facing departments. It should also be remembered that culture comes from action and experience, not dictat!
The core activities critical to planning and implementing CRM are as follows;
- Define the business objectives
- Understand CRM’s 3 dimensions
- Use a structured approach to manage CRM
- Identify both Corporate and Customer needs
- Use customer needs to re-engineer business processes
- Select Technology based on business needs and functionality
- Ensure Systems development is business led
- Establish actionable measures of customer performance
- Actively manage culture & change; win buy-in
- Use a phased implementation strategy
Define your business objectives
To achieve success you must begin with a clear set of goals and objectives against which results can be measured. It is like having a journey plan; you have the map, the start, end and stopping points all planned before you set-off, including taking into account the time of day you will travel, petrol, etc. You have planned your journey with all the nuances of the route, vehicle and personnel involved in mind.
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By GlobalDataCRM should be viewed, as a strategic response to a set of business needs; as such it too requires all the nuances of personnel (people), the vehicle (business/processes/IT) and the route (customers & market) to be accounted for. In practical terms, the company’s business plan should specify CRM’s contribution, defined in terms of competitive positioning, customer profitability and related business opportunities. It helps if there is already a strategic mandate stating that a customer-focused approach to business is desired or indeed is already in place.
| Key questions to ask: What is our strategy for improving long-term profitability of our customers? |
Understand CRM’s three dimensions
Whatever its scale, every CRM project has three dimensions: People, Processes and Technology. A classic mistake is to view CRM simply as a technology project and to underestimate the scope of the process and cultural changes involved. There are major implications for organisational structure, for processes, for IT architecture, for segmentation and measurement of customer value, which must be taken into consideration before embarking on a CRM project. An approach that addresses the multi-dimensional scoping of a CRM project will maximise its chances of success.
| Key questions: Do we understand the people, process and technology implications of CRM in our organisation? |
Use a structured approach to manage CRM
Every CRM programme needs to be realistically scoped and planned using milestones and goals to measure progress. An essential aspect of CRM project management is the development of the implementation and design team. This usually includes representatives of sales, marketing, service, information technology and senior management, in addition to any outside contractors. This of itself requires a consideration of the need to allow the team to develop through the forming-storming-norming phase of team dynamics before any critical areas of the CRM project are undertaken within the performing stage. A structured approach ensures that all the essential steps are addressed and given realistic timings.
| Key Questions: Are we familiar with 3rd party project management models? |
Identify both corporate and customer needs
Any company’s CRM programme has to be designed and built around the needs of its customers and users. This means researching customers’ requirements and expectations, so that CRM performance can at least match and ideally surpass these requirements. Similarly, the same goes for the functional and information needs of sales, marketing, service and all others involved in the CRM process, e.g. accounts, dispatch, samples, warehouse. All to often their needs are overlooked, which leads to the second largest reason for CRM project failure – a non-pervasive system. It is important to create a single view of the customer inside the organisation and provide the customer with a consistent view of his transactions with the business whatever the touch point; this is frequently called transparency. Note there are also fundamental issues with the Data Protection Act to be addressed by any system that allows customer’ access to data.
| Key Questions: How can we research customer needs and expectations? |
Use customer needs to re-engineer business processes
Inevitably, needs-analysis will reveal a gap between the organisation’s current capabilities and processes and customer expectations. If CRM is to work this gap has not only to be bridged but also implemented in a manner that is seamless to the customers. This means that in the vast majority of cases customer-facing processes will need to be reorganised or rethought for CRM to deliver results; this has serious implications for both staff training and continuity of operations. Habitual methods of working may have to be changed – a very emotive issue and one that has de-railed many CRM projects, when not addressed. Do not underestimate the ‘we’ve always done it this way’ syndrome. Staff matter, make sure they are involved with any re-engineering of the business processes or they may well wither on the vine. Finally, make sure any new processes work properly before they are automated.
| Key Questions: What needs to be done to align customer-facing processes to meet CRM objectives? |
Select Technology based on business needs and functionality
When compared with the issues of people, process and information management challenges, technology selection is usually relatively straightforward – provided you have a clear understanding of the functionality required. This is a basic methodology for professional buyers and makes equally sound sense whether sourcing items for a system, intangible or otherwise, or for more mundane purchases. Again following a structured approach will allow the best solution to be identified on the basis of rigorous comparison against a well-defined list of your needs and functionality requirements.
| Key Questions Can we construct a detailed tender document specifying functional, capacity, scalability and other system requirements? |
Ensure systems development is business led
Only the people who work in each department of your business truly understand that area’s needs and have a vested interest in its future success. Because of this it is vital to ensure that business representatives from the key departments, not technologists, are in the driving seat of your CRM project. The best option is to appoint a non-technologist senior manager to head the project team and to include business representatives in any sub-teams developed to oversee any specific areas of development. Users of the system should be involved at critical stages of systems development, as this will help to quell resistance to any needed change.
| Key Questions Is our systems development business end user led? |
Establish actionable measures of customer performance
The pay-off from CRM should be measurable in terms of customer profitability and value. Segmenting the customer base in terms of recency, frequency and value helps to establish these key indicators of success from relationship management. In order to track the gains made from the application of a CRM strategy it is important to start with a quantified assessment of profitability and value, as this helps to focus on measuring results in a meaningful way – a very hot topic in business at present! On this subject I would strongly recommend that a Gainshare approach is used to help win buy-in, the next topic below.
| Key Questions What are our most important measures of customer performance? |
Actively manage culture & change; win buy-in
Unless the human issues of a CRM project are handled effectively, all the analytical work, systems development and technology investment will be for nought. Unless the staff ‘at the coalface’ buy-in to the new working practices the project is doomed to fail; indeed the demotivation of staff that is likely to result from non-involvement may well actually worsen relationships with customers as it becomes apparent in staff attitude.
To avoid failure, management of the change in processes and procedures has to be built into the programme from the start; this may well include a significant amount of re-training time. Above all, involving people in reworking processes and systems design, rather than imposing the new regime, is essential. It also helps if the system is implemented in such a way that the ‘gains’ it produces are ‘kicked-back’ to the operatives involved, particularly if it was their ideas that created them! This is a system known as Gainshare, which has been used successfully by a number of businesses in the USA, Australia & Japan.
Lastly it is worth noting that the companies that have implemented CRM successfully find that their investment in training is one of their biggest expenses, but that it proved absolutely essential. Ignore this at your peril; it is the single largest reason for a CRM project’s failure.
| Key Questions: How can we modify corporate culture to enable effective CRM? |
Use a phased implementation strategy
Another key lesson from the established world of project management is that a phased approach helps an organisation to more easily absorb the impact of change. This allows for people to see the advantages of any new systems and processes, whilst also learning the new skills and competencies needed to run it, again a Gainshare philosophy fits nicely within the overall concept. It also allows for parallel running of systems to militate against ‘big-bang’ problems and to allow ‘fine tuning’ as the project develops. If all else fails it also provides a structured mechanism to review and overcome unanticipated issues as they arise.
| Key Questions Do we plan to pilot new processes and systems to troubleshoot any developments? |
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