CRM ~ what’s all the hype about?

“Much ado about nothing”? – Is CRM like the Shakespearean drama, just a big fuss about a trifle? Probably too harsh of an opener or is it a proclamation with some elements of truth? The CRM acronym is indeed one of the buzzwords at the tip of the tongue of many professional business executives now and in recent times. “We are already doing CRM…..”; or “Let’s start a CRM project…..”; or “We need to introduce CRM to sustain our competitive advantage….” Anyone heard these CEO/CIO/COO etc. statements….. or similar? Our angle on the CRM…. it borders “taboos”…. you know, the words and topics that everybody knows or does but only few speak of. The bottom line is really that all businesses are doing it – CRM. So what’s all the hype about? Well our take is that businesses and their occasionally hired consultants have come to realize that while most enterprises may “do CRM” it’s done with varying degrees of success! Some businesses do CRM consciously, others subconsciously. Some successfully, others less so. Some regard CRM as its mentor to sustain competitive advantages; others agree but remain hyped with lots of talk and way too little action. And so we could go on….

In this initial short piece, our objectives are several. We intend to:

•            define CRM from a pragmatic perspective

•            establish that done right, CRM can bring value to any organization.

•            establish that CRM is dynamic not static

•            advocate that big is not necessarily beautiful

•            make you forget the CRM ROI

The Pragmatic CRM Oxymoron

Customer Relationship Management ~ let us first define the elements. According to one source :

customer is : “one that purchases a commodity or service

relationship is: “the state of being related or interrelated”. Alternatively “the relation connecting or binding participants in a relationship” or “a state of affairs existing between those having relations or dealings

Management is: Several examples, one being “the conducting or supervising of something (as a business)

So if we combine these elements one could derive the following definition of CRM:

“Conducting affairs with someone purchasing a commodity or a service”.

By golly! Direct us please to any company in today’s business world aiming at providing tangible or intangible goods and services to others that are not doing CRM, with this definition applied! Yet when you look up some references defining CRM you get

1. Webopedia®: Acronym for customer relationship management. CRM entails all aspects of interaction a company has with its customer, whether it be sales or service related. Computerization has changed the way companies are approaching their CRM strategies because it has also changed consumer buying behavior. With each new advance in technology, especially the proliferation of self-service channels like the Web and WAP phones, more of the relationship is being managed electronically. Organizations are therefore looking for ways to personalize online experiences (a process also referred to as mass customization) through tools such as help-desk software, e-mail organizers and Web development applications.

2.®: CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that describe relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

One could conclude that these definitions are somewhat enterprise introvert (i.e. CRM for the sake of the enterprise which is just one side of the relationship coin) and excessively focusing on tools i.e. IT applications.

One may also argue that CRM is a bit of a Oxymoron! We shall refrain from making any analogies but rest by emphasizing that the CEO’s of the world could do better than to advocate, “Now the time has come to focus on doing CRM”. Rather a winning statement would be to scrutinize if the enterprise is doing CRM right!

Abstaining from making a definition of CRM contained within narrow boundaries we advocate that CRM is about generating a business model which is customer focused to exceed expectations, operationally viable from A thru Z throughout the enterprise, culturally inept from low to high organizational levels with an overall aim to maximize shareholder value and supported by effective application of information technology! Effective CRM is not applied, it’s lived. Let us repeat the common cliché; CRM is not a destination; it’s a journey! It’s not just about the adoption of sales force automation tools, Direct Marketing Centre environments, web based on-line shops or self- services. Such is the technology applied to aide the focus to effectively manage customer relationships.

Everybody’s doing it… but are they doing it right?

We ask for just some leeway to focus on the aforementioned boundary less CRM definition. Applying this, CRM is simply profitable businesses management, the objective for most enterprise chiefs and boardrooms. Doing it right necessitates focus on just 3 simple ground rules. The challenge lies in the implementation:

1.           The company value proposition must exceed customer expectations

2.           The delivery must be unsurpassed to secure competitive advantage and customer retention

3.           The business model must be dynamic to adopt to environment changes

While the rules may be tragically tedious they form the cornerstone of business success and drive a need in any enterprise to focus on implementation. We advocate that such be done best when:

1.           All enterprise stakeholders are customer focused. Never mind high or low ranks and levels, never mind whether stakeholders keep functional duties that are customer facing or not. Focus to make sure that every single individual who contributes to the customer fulfillment process is customer focused in exercising his or her duties.

2.           Customer focus is culturally created. It cannot be applied through technology. Technology and applications can become effective tools in the rendering of customer focus however, without the cultural precondition in the hearts and minds of all enterprise staff, relationship imperfection is inevitable. And this is why CRM becomes a journey. Simply because relationships must be nourished, maintained and managed. So CRM is company culture? Very much so!

3.           Spice the culture aspects with sound knowledge of customer expectations. Create your value proposition against knowledge of what is expected from you and deliver commodities and services that exceed these expectations. The value provided can take any shape and must not necessarily be focusing on the best product at the lowest price. Intangible value provision can yield immense benefit.

4.           The realization that CRM is not a destination provides the dynamic perspective. Just like the constant evolution of company culture, CRM evolves; it lives and must be nourished to blossom.

Doing CRM right rocks the foundation of the business model. Does that mean that only up start companies retain the CRM edge? Not necessarily. While newbies on the enterprise scene could have distinct advantages if focus on the 3 cornerstones is applied from day 1, current enterprises are not necessarily T-rex’s close to extinction. The realization itself that CRM necessitates cultural change or adaptation delivers a critical milestone fulfillment. Incremental change throughout the enterprise will provide benefits ripping and once established the conscious CRM focus of the enterprise will be successfully aided by deployment of adequate tools of the trade.

We are into the change management game but have established an important realization. The enterprise must change to become customer focused and this change is not only brought about through the adoption of the latest cyber tools. It will necessitate company self-realization, a reaffirmation of the business model, including validation of the strategic vision and business objectives. And rest assured you won’t be able to divert from focusing on the famous BPR (business process re-engineering) concepts and methodologies. When established, your processes must no doubt be reviewed from a business perspective and optimized towards the realization of CRM. TheHunleyGroup® puts this well in their 7 deadly SIN’s of CRM when stating in SIN number 4 that a flawed process must not be automated. Doing it won’t solve your process problem but it will enable you to accelerate getting the wrong results.

Big business, big bucks, big tools and big blunders?

They are plentiful indeed – the CRM blunders! Do a search on Google® and “CRM failure” yields more than 8,390 hits. The irony, do a search on “CRM success” and you get close to 49,100. Based on Google® hits, the relational CRM successes are guaranteed up to 85%! Unfortunately it isn’t that simple. Why is it really that so many CRM projects fail? We shall argue that we are back to where we started and dare say that it’s not the CRM project per se which fails – (note that we do not see CRM as a project) – rather are most publicized failures, statements of failed technology adoption. “We invested in this zillion dollar system for all our reps. to use only to realize 12 months down memory lane that less than 10% are actively using it”. Now that’s common news.

From experience we’re devout CRM technology KISS proponents. KISS equals “Keep It Simple Stupid”. Get your business model right, put all efforts onto the cultural revolution and the onwards establishing of effective business processes. Then you focus to introduce technology to provide process aid. Our detailed take on actual application will follow in a later blot but to the benefit of the reader who made it this far in this piece (thank you ever so much), do make sure that your “gadgets” are user friendly, bells and whistles free and designed to reliably deliver the information value which it is supposed to. There is nothing worse that letting loose a system which turns customer facing staff into administrative data entry clerks without providing information of value in return. How often do we see data rich and information poor systems being adopted? How often have you heard your sales rep. complain that the system deprives them their selling time and is no good for nothing in that information is either impossible to obtain or unreliable when delivered!

Simple tools can do the job very well. But it takes thorough focus be it for the development of just a spreadsheet, a database, a simple application, a simple web form… it doesn’t really matter as long as you do capture information with which you can dynamically adjust your business model to perfect the delivery of your value proposition and thereby maintain constant focus on exceeding customer expectations

When it comes to the introduction of technology, effective project management is key, and the tools and techniques of effective project management are already communicated plentiful by professionals. Involvement! Planning! Focus! Change Management! And emphasis on objectives and outcomes are obviously key. A simple yet so often overlooked CRM perspective: What kind of information is it that your empowered front line colleagues find valuable in the exercising of customer service. What is it that you can provide via CRM tools, which the font liners don’t already manage via paper, pens, stickies, handphones or diaries?

Keep in mind that whoever will be the users of IT applications and tools are enterprise resources who will be tasked to share their intellectual capital and thus voluntarily erode their continued employability potential. You need convincing arguments for buy in’s. What’s better than the realization that it’s all about self-help? I.e. if you – dear User – share your intelligence with the enterprise – it’ll boomerang to you through factor X earnings hikes.

ROI ~ Really oblivious intentions

Robert Boylan, Results Now Inc.® puts this very well be in his statement “If you had a £25m piece of equipment in your factory, you wouldn’t think twice about paying 5% p.a. to keep it finely tuned, yet companies argue for weeks about spending a few pounds to keep a £25m sales team selling”

In the context of what we have mentioned, think about CRM ROI and you may realize how little sense this makes. What is it that you wish to measure? The ROI of your effective business model, your value proposition or? Well you do this already in your P&L’s, or the build up of retained earnings in your balance sheet! What some companies strive towards is to measure the ROI of IT applications introduced to aid the CRM objectives. Well how can you? How can you measure the cost & revenue outcome of say a sales force automation tool in use for X months? How can you confidently and in isolation put the credit to (or blame) the application as the key reason for your success (or lack of). We shall advocate that you can’t. We’ve established that the tools are there to aid you in the process. Leave the effectiveness ratings to the enterprise P&L and the reaction of your stakeholders when they see the value boosts you present! Be mindful to cost! The tools you acquire to support CRM in your enterprise need not take 7 or 8 digits $ investments. You can do a lot with much less. Focus on what is key and be cost prudent.

In closing, CRM is a continuum. Experts of the trade have established that CRM will cease to be the opportunity for competitive advantage. Rather, lack of it will bring about competitive disadvantage. Our earlier focus shows support to this. Turbulent markets demand a shift in focus from customer acquisition to customer retention. What better way to achieve this than by making sure that your value proposition is unchallenged? If you convincingly market this, they’ll keep coming back for more.

Have a fantastic day ahead


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