subject: Crm: The Essential Guide- Five Principles For Crm Success [print this page] INTRODUCTION INTRODUCTION
Without customers, a company cannot survive. So its no surprise that customers influence the way companies in every industry conduct business. The challenge is how to effectively manage interactions to best serve customers and prospects while staying aligned with evolving business goals, including growth and profits. The customer-centric companies achieving the greatest success today use flexible customer relationship management (CRM) solutions to manage the customer-facing processes of their business and implement their customer-centric vision.
Companies need to take a strategic and informed approach to their customer relationships and CRM selection. Over the years, some companies have spent large sums on CRM only to have it fail to deliver the results they had hoped for. When CRM deployments do not meet expectations, it is often due to a lack of clear business strategy or executive sponsorship, poor technology fit, inadequate planning, or a combination of these factors. As explained in this paper, CRM is first and foremost a strategy, and CRM technology enables and supports this unique business strategynot the other way around. To avoid common pitfalls, its important to be aware of this and other core CRM success principles discussed in this guide.
With an ever-increasing number of factors to consider in CRM system selection, it can be difficult to navigate technology options with confidence. One of the best ways to learn how to achieve CRM success is to look at how other companies have made it work for them. Our customers and prospects continually provide us with insight that weve used to refine our CRM solutions to better fit their needs. With the complexity of CRM system evaluation in mind, weve gathered a combination of our customers success stories, research, and our own CRM insights (gathered across more than 2,000 implementation experiences) to create this guide to help companies like yours take a considered approach to CRM evaluation, informed by real-world success.
This guide distills insights from customers, prospects, industry analysts, and the press down to five key principles for CRM success. Use these five principles as a guide for selecting the right solution and, ultimately, deploying CRM successfully. These principles will help you develop a CRM strategy that is executable, measurable, and aligned with your companys strategic goals.
Among the companies profiled in this guide, one calls CRM the glue that holds their business together. Another describes CRM as their backbone. One more states CRM has opened many doors. For all of them, CRM is fundamental to their business success.
PRINCIPLE 1: CRM Is Not a Software Purchase. Its a Strategy.
No technologyno matter how sophisticatedcan be successful without a strategy to guide its implementation and use. Business strategy and technology must always work hand in hand to bring a customer-centric plan to fruition.
CUSTOMER INSIGHT: Build your CRM vision by first defining a valuable customer experience.
CUSTOMER INSIGHT: Conduct business on your customers terms.
CUSTOMER INSIGHT: One global view. Myriad local relationships.
CUSTOMER INSIGHT: Make user adoption a top priority.
PRINCIPLE 2: CRM Must Fit the Way You WorkToday and Tomorrow
New software often brings new benefits, but it can also bring new inconveniences, if it forces you to change the way you work to fit the software. In addition to being disruptive, if rigid new software is imposed on your employees, this can breed resentment against the new tools and hinder user adoption. With CRM, where success is closely tied to user receptivity, this can present a significant obstacle.
Furthermore, your business processes have often been built up over years of experience and have been honed and refined over timein many cases, they are part of your competitive differentiation. In this light, changing the way you work to fit a software system is not just a nuisanceit can be seriously detrimental to your operations.
CRM needs to work the way you dothe way your employees work and the way your business operateswithout changing the processes that make you unique. Your employees should have access to all the customer data they require, whenever they require it, and in their preferred viewand it should make it easier to do their jobs. While CRM may bring about process refinements and new efficiencies, it should still mold to the unique characteristics of your business processes.
Business processes, however, are not static. In fact, a companys ability to reconfigure processes quickly in reaction to changing needs, priorities, and external factors can produce a significant competitive advantage. A CRM solution built on a flexible technology platform can easily be modified to suit your current workflows and business needs, while also providing the flexibility to respond quickly to future events and evolving demands. By prioritizing flexibility in your software selection, you can support a more adaptive, agile enterprise.
Deploying the right CRM solution should enable you to bring all of your existing, time-proven customer-facing processes and procedures, from lead management through quote and contract generation, the sales process, and customer service, under the umbrella of a single, integrated system that makes your processes more adaptable, not rigid.
CUSTOMER INSIGHT: The right CRM architecture can work the way you do.
CUSTOMER INSIGHT: Your system must be flexible to build in complex business processes.
CUSTOMER INSIGHT: CRM should help you growand grow along with you.
PRINCIPLE 3: Define Measurable CRM Business Benefits
Many enterprises measure the outcome of their CRM strategies only as an afterthought. They understand that a CRM system is a necessity for their business, and thus fail to set out quantitative goals or metrics for tracking hard results. The unfortunate consequence is that many enterprises cant prove their success or that they met their original, intended objectives. At some point, most organizations have a need or desire to measure the success of their CRM implementation. Goals and metrics must be quantified and benchmarked right from the start to ensure that the right data is captured and processes put in place to properly quantify results down the line.
To determine the impact of CRM on your organization, baselines for key business measures need to be established as a starting point that can be compared against once the solution is in place. This also helps ensure that benefits are correctly attributed to changes effected by the CRM system, rather than other factors. For example, increased cross-selling, cost reductions, customer satisfaction scores, or changes in first-call resolution could be used in the return-on-investment (ROI) analysis for a project.
Some best practices to follow:
Define CRM success for your organization at the outset
Pre-set corresponding metrics and data requirements
Determine the business processes required to capture the data
Determine user interface implications and accessibility requirements
Plan for end-user training, especially if you are making changes to existing processes
Consider data hygieneensure the data thats captured is clean
Scope the CRM project clearly and budget for all costs
Secure management buy-in for any expansion to the original scope of work
System able to drive membership acquisition and retention
Increase in overall efficiencies
The ROI metrics for Company A are a split between hard ROIefficiency gainsand soft ROIthe ability to support them as they grow. This mandates a flexible, configurable, and customizable solution.
Company B needs software that supports collaboration across departments and between the company and its customers and sales channels. The need to report on membership acquisition, retention, and improved efficiencies requires benchmarks and pre-set targets from the project outset and a plan for measuring the same metrics over time to demonstrate results.
Though ROI definitions vary, CRM returns should be measured in terms of overall business valuehow the system supports a vision and yields both hard and soft benefitsand not exclusively on metrics. Nonetheless, determining how success will be measured, benchmarking pre-implementation figures, and ensuring the system is set up to capture the necessary information are necessary to allow accurate calculation of quantifiable ROI metrics post-implementation
CUSTOMER INSIGHT: CRM makes it easy to deliver fast and informed service. The ROI pay-off? More revenue, at less cost.
Companies of all sizes face the challenge of retaining customers. With more options than ever, customers who dont receive the service they expect have little reason to stick with your company. Customers across industries demand fast, personalized serviceand if your company cant provide this, theyll find a competitor that does. This pressure has fueled the need to have critical customer information immediately available to all service agents at all times.
On the flip side, offering great customer service often comes at a cost, and companies must balance with their desire to provide superior customer service with their need to keep costs low.
Luckily, the right CRM solution makes it easier to do both, resolving service issues faster and more cost-effectively while increasing the degree of personalization and responsiveness.
PRINCIPLE 4: Consider Total Cost of Ownership (TCO) Carefully
Theres good reason why industry analysts commonly use time horizons of at least three years when helping CRM vendors and customers set expectations for the total expense of a CRM project. Few organizations have unlimited budgets, and in most cases, CRM is not a one-time cost. Its important to understand the full costs of CRM implementation to help plan, budget, and select systems appropriately.
Enterprise application software investments can be prohibitive to some companies, because the majority of expenditures are up front, in license fees, services, and training, all of which are incurred before the software demonstrates measurable business results. In fact, we have estimated that costs in the first year are typically more than 60 percent of the overall project costs. This can seem very risky to companies that want to see results before committing too great a sum.
In order to manage cost expectations over time, total cost of ownership (TCO) analyses should be conducted with a clear view of the overall strategic expectations for a CRM project. A sound framework for measuring results over the life of the project must be stated at the outset.
Given the complex interdependence of typical enterprise technology environments, TCO can be a difficult metric to obtain for a single enterprise software system. Key CRM lifecycle costs are less about licenses and much more about the extended costs of owning a CRM system. Leading industry analysts have estimated that up to 90 percent of CRM lifecycle costs are associated with customization, integration, deployment, and ongoing administration (support and maintenance) of the CRM system.
For many of our customers, only on-premise CRM software offers the confidence, flexibility, and control they need. Thus, instead of looking to eliminate up-front investments, most companies look at ways to minimize the total cost of ownership over time. This can include taking a phased approach to CRM deployment, rolling out the system in manageable stages and validating results before expanding. Another strategy is to look for a system whose features most closely match the companys needs from the outset.
CUSTOMER INSIGHT: Industry-specific CRM lowers total costs.
Given that customization can account for a large share of CRM implementation costs, finding a solution that more closely matches your needs out of the box can significantly reduce the cost and time it takes to roll out a CRM system.
PRINCIPLE 5: Think Beyond Features: Pick the Right Partner
Finding a CRM solution that fits your needs is about more than just a checklist of features and technical requirements
CUSTOMER INSIGHT: Industry knowledge and experience pay dividends.
Working with service providers that have experience in your industry can provide a tremendous advantage, as companies that have demonstrable knowledge of and experience in your industry will require less time and education to familiarize themselves with your business processes and needs.
CUSTOMER INSIGHT: A supportive partner can make all the difference.
When you select a CRM system, youre selecting more than just software: youre selecting a partner. How well that partner supports your needs, not just during your initial purchase and implementation, but through your companys evolution, growth, and changing needs can have a major impact on the long-term value and viability of your CRM project.
