How to use CRM technology effectively
CRM project failure is an all too common reality for those working within the customer service industry. Research a couple years ago by industry analysts Gartner found that up to 60 percent of early efforts ended without success.
In the 1990s, there were a number of companies who invested heavily in CRM technology, which did not produce the results they expected, perhaps leaving some jaded about the practise.
Technology has of course moved on since this time and companies are constantly investing in more advanced solutions. Software-as-a-service applications are increasing in popularity, as are automated solutions.
Indeed, a report by Gartner earlier this year revealed the market for CRM software fared well during the economic downturn – far better than other enterprise software solutions.
But those employing such technology are still at risk of repeating the mistakes of the past if they fail to realise that it only forms part of a successful CRM project.
A poorly implemented CRM technology project is likely to damage a business as much as a well implemented one is likely to improve it.
Even though the technology relating to CRM solutions has moved on, and what businesses hope to achieve with it has changed too, the core principles to make it a success remain unchanged.
Gartner found that, for 2010, most companies' top priority when implementing a new CRM solutionwas raising customer satisfaction, followed by attracting new clients and improving the up-sell and cross-sell of products.
And, none of these objectives can be achieved if a company jumps in feet first without first outlining a clear strategy.
Firstly, it is essential that the needs and vision of the company are integrated with the CRM strategy and there is a clear destination that is being travelled towards.
Ed Thompson, vice president and distinguished analyst at Gartner, explained: "Ensure that the CRM vision is to articulate the future environment for the organisation in terms of profitability and customer experience."
Before starting a new CRM strategy, companies must also assess what skills and resources they already have in place, as well as what their competitors are doing and what their customers require. This is where the foundations of previous failures can be built upon with fresh eyes and ideas, according to Gartner.
Finally, Gartner said that the road must be mapped out, providing "quantitative" answers to important questions, such as those relating to the customer base it is targeting, while offering "subjective answers to more-holistic, organisation-wide questions", like the idea way to increase customer loyalty.
The Human Element
Choosing the technology to assist a new CRM strategy requires a number of considerations. It's important not to be taken in by claims of what it is capable of doing and play close attention as to how it will fit in with the company's business processes – especially human resources.
CRM software must not only fit in with the aims of the strategy, but also with the staffing structure in place.
Salesforce.com highlighted a case where a US printing and publishing company saw their CRM solution fail, as they did not take into account their high staff turnover when selecting their software. The system was too complex to "adapt to the requirements of a rapidly changing sales call centre."
The company recommended using a very simple system if staff stay with the organisation one year or less, to avoid wasting resources on training staff without seeing a return on investment and money on an advanced system which is never fully implemented.
It's also essential to realise that the cultural change needed to accompany the new CRM strategy is likely to take time; it is not a process that can happen overnight.
Ed Thompson from Gartner explained: "The challenge is to avoid rushing the development process, as the company may be committed to many years of change."