Planning CRM? Tread Carefully

Q2. The name of this brand was chosen to compliment the first store’s décor that opened in 1977 in Palo Alto, California. They wanted it to seem “private” and “fanciful,” and impart a sense of class and dignity. The first part of the name emphasizes a historic association and second adds on the sense of intimacy and privacy. With 2012 sales of $6.12 billion, which brand are we talking about? (Representative image: Reuters)

“We need to build relationships with our customers” – screams literature and marketing experts. So most organisations thought the solution was to implement a CRM (Customer Relationship Management) system!

The failure rate of CRM systems worldwide is about 40%. Many of these software solutions failed because they fail to meet the set goals, resulted in cost overruns, or delivered late. It may also be because of high user resistance internally. Most people think of CRM as the all-in solution and perhaps this is the main reason for such high failures.

The heart of a good CRM is simply the right people executing the right processes, using the best possible and affordable tools. Today, the best tools are technology-based that help manage the relationships between companies and customers.

A CRM project should not start with software but with a mindset change. A good leadership can indeed make this happen. We have been helping many companies do this right. The mindset change starts with some self-analysis:

• Start with an analysis of your current team. How is your organization structured? Which all jobs are customer-facing? Which job families are most strategic for customer delight? If this analysis isn’t done in the beginning, it is not easy to evaluate next steps and improvement plans.

• Draw the process map of the customer management. One should map both short- and long-term processes into it. Processes that drive fundamental services to customers, and those bringing new business, should be included. Break down the high-end processes to the lowest drivers. What role each plays? Include sub-processes such as lead generation, qualification and signing.

• Tweak the corporate vision for the customer centric future. What processes we would like to change? What is our change agenda? For each process, write the change agenda for the future, linked to the vision.

Most often CEOs think that buying expensive CRM system will make their companies customer-focussed and build great customer relationships. They often forget that the people who do the actual job of interacting with customers play the biggest role in doing this.

It is also true that front-line employees alone do not build the relationships. It requires organisation-wide alignment. Commitment by the top leadership is most critical. The skills required in each function will be different when such a focus has to be implemented successfully. For instance if one of our public sector banks plans to become more customer-centric, it needs to look at customer service representatives and call centre employees closely, and equip them with financial planning skills and cross-selling techniques.

The executive in charge of CRM implementation in a company should focus on the following in order to ensure that it has a fair chance of success:

• What are your business priorities? It could be building better solutions and shortening service time in one company, building more intelligent systems in another. It is important to prioritise and carry everyone around the same.

• What are your current challenges? In order to make it smooth to achieve your prioritised objectives, you need to know the key obstacles in your path.

• How can you answer the question, “what’s in it for me?” by employees? Establish the links between what employees do everyday and the organisation’s priorities. Explaining how their work can impact the bottom-line is a good way to get their involvement.

• Can you show possible scenarios to all stakeholders? In order to get the full commitment of stakeholders, it is important to show best and worst case scenarios and also what happens if you do not do anything at all.

• What is the business proposal on CRM? Answers to the above questions can be put into a business proposal so that all the relevant stakeholders can understand and approve. It is an investment and so establishing ROI for the same is important.

With all these steps in place, you will now be able to get all the stakeholders to examine the various CRM software packages at your disposal. That doesn’t mean your work is done as the executive in charge of CRM. You need to develop the roadmap that clearly defines how your organisation is actually going to accomplish the required tasks in a systematic manner. You may find that the timelines for this project will have to be extended beyond the scope given the current pandemic crisis. It will also be a bit unclear how the future will evolve and whether customers will ever be loyal to one business.

You will also have to draw the strategic roadmap with a strong implementation plan with budgets linked to it. Many of our clients, large and small, have found the balanced scorecard as the most useful tool for driving the entire change agenda. Sometimes executives will be impatient for change but without proper planning it is unlikely to succeed. Occasionally we have found that executives in India lack the proper planning skills and it paralyses the entire project.

A CRM project requires the skills of managing people, processes and systems. If you bring the right mix of these three skills to your team, you will find better ROI from CRM.