Why do companies implement CRM and other such questions - Part I
When it comes to CRM failures almost everyone has a reason (and a scapegoat as well
) and also a figure (from 20% to 80% failure rate) but not many would try and ask themselves why did we go in for CRM? And even if you do ask this question to executives of a company which lives and breathes “Customer Relationship” they will give you a wide variety of answers like “To listen to our customers” or “To respond to competition” or “Our top management asked us to” to even “We had surplus IT budget”
In a survey that Infosys did the top 3 answers for “Companies implement CRM initiatives and projects to:” were– 1) Respond to sales, marketing or customer service stakeholders, 2) Respond to customer demands and 3) Respond to upper management strategies.
This shows that the if your front end team pays closer attention to what customers are saying about their company and its products/services then they will be able to correlate retention with better service at all touch points be it POS, or contact center or field or online. A customer may not openly say “Hey your company needs a CRM system”, but instead they will say “Why are you taking 5 days to service my dead phone request?” or “Whatever happened to my online request to send a sales executive to meet me?”.
Interestingly 3 weeks back while scouting around for a good car deal I came across a site which acts as an intermediary and I put in my timeframe of buying a new car as 2 weeks, after a week (very poor response time) I got a call from this company and the lady confirmed my details and my requirements (new car in next 1 week) and said she will send a sales officer to meet me. But it has been a week since I picked up my car but the sales agent is yet to arrive. Delay in responding may have just cost them not only one customer but potentially many more who will ask me for my opinion on where to buy from.
In part II of this series I will look at the following questions - What factors have the maximum impact on the success of CRM projects and initiatives? And CRM initiative will impact which all areas?
Gartner has recently come out with Magic Quadrant for CRM service providers North America.
Comments
This elucidation calls for - How do we measure CRM?
Did the customer engage in taking the pain to have a framework in place to measure the CRM effectiveness? Did the vendor suggest such a value add? At the end of the day, even after a CRM failure this measurement will be a huge value-add if implemented.
Again top management and stakeholder commitment to the above is very essential to ensure this value-add.
Some parameters that I can think of are –
• Did the CRM implementation have a tangible benefit as a vision when envisaged?
o Did the service quality improve after the CRM automated the service functionalities in the organization?
o Was there an improvement in lead conversion after the CRM implementation?
o Was there a better target audience due to CRM in place and hence did this bring in a stronger pipeline?
• Did the CRM implementation have an intangible benefit planned?
o Did the implementation of the CRM strategy improve the brand equity of the company?
o Was there a stronger brand recall?
• Were there metrics in place to see, track and analyze the market performance, the customer behavior, the repeat customer ratio etc.
• Was there a measure or a framework to check if the employee productivity improved after the CRM implementation as Internal customer satisfaction is equally important.
Am sure there are many more that we can think of and share here.
Posted by: Venkataraman.R | August 31, 2009 12:59 PM
Venkat, you have listed some very valid points.
Posted by: Shreedeep | September 5, 2009 09:56 AM
Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing.
Posted by: Yogin Vora | September 7, 2009 02:26 PM
I believe that the main reason to implement CRM is to keep track of your daily items. For larger companies, it is even more crucial as all people should have access to all data at all times.
Posted by: Hana | September 11, 2009 03:22 PM