The Challenge Of CRM
First, I think we all believe that there is something fundamentally sound about a company wanting to give its employees tools to do a better job of managing customer relationships. When faced with the decision whether or not to purchase a CRM solution, most reasonable executives will conclude that having a CRM solution is better than not having one. A decision is then made, and despite great hopes and promises, implementation is less than stellar. What can be done to avoid the high failure rates of CRM? Here are five tips:
1. Define a customer relationship vision for your company. What are you moving toward? What will your company look like to an ideal customer when he or she interacts with it? When there is a clear vision around the ultimate change that CRM will bring to your customer's perception of your value, and it is clearly articulated and bought into, that vision will be realized despite the inevitable bumps in the road.
2. Have a clear roll out plan. Don't try to boil the ocean. Figure out the key functionality you need implemented and set up a time table for when the functionality will be rolled out. Take into account how your employees will respond to disruptive change. Give them time to adapt and expect a temporary dip in productivity as they adapt to change. Select people who are respected by their peers but who are not technology geeks to lead your change effort. You want others to think, "Charlotte knows what she's talking about and if she says this is good, it must be good. If she can do it, I can do it."
3. Ensure your CRM system can change easily. The mistake a lot of executives make, in today's business environment, is they see change as a revolution rather than an evolution. Most companies set up their systems as if they will not have to undergo another change for at least a decade. In today's business environment, that can be fatal. Choose a system that can be easily adapted (ideally without any programming) as your market and internal requirements change. Get your employees to buy into the value of ongoing, evolutionary change. Feed them a steady diet of systematic, evolutionary improvement.
4. Analyze your customer base and implement your CRM solution for your best customers. We recently did a customer database analysis for a client and found that exactly 80% of their revenue came from exactly 20% of their customers. We also found that a very modest increase in sales from the top 20% of accounts would easily replace all of the revenue from the bottom 20%. This is true for most companies. Invest in those customers who are willing to invest in you. Doing otherwise, will stretch you too thin and dilute your value to those who matter. Many customers are not true customers. A true customer wants and needs for you to be successful. Identify these customers, develop a more intimate relationship with them and then adapt your company to meet their changing needs and definitions of value.
5. Be transparent. Choose a CRM solution that will allow you to share the information you are capturing on your customers with your customers. Most CRM solutions are closed. They were designed with the mindset that since information is power, you should capture as much of it as possible and not share it. This will give you the "upper hand", the reasoning goes. In fact, all it creates is suspicion, and since your customer truly has the power, that suspicion ultimately results in an adversarial, distant and deteriorating relationship. Sharing information leads to trust and trust leads to a mutually beneficial, collaborative and constructive relationship. You won't be able to have this relationship with all of your customers. Nor do you want it. In the majority of cases, it doesn't matter what you do, these customers will never see you as anything more than a vendor to be commoditized. Having a proven model of mutually profitable and collaborative relationships will attract others in your customer base to embrace this new way of working with you.
CRM is critical to success in today's market. However, it is how you manage your relationships with the customers who value your company and see it in their best interests to work collaboratively with you, that will define your success. Information exchange and true customer relationship management with these customers will yield tremendous financial, strategic and psychic gains for you and your staff.