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Have You Laid the Proper Foundation for CRM

by: Joe Roberts, Principal Consultant, BECP, SLE, MCP

With each passing month I see developing a clearer picture of how a good CRM system can benefit most businesses. This is true of any maturing field; Business Intelligence has a similar bell curve. The need to track and analyze customer activity and build strong, lasting relationships with those customers is the cornerstone of any really successful business. This is especially true in businesses that have a contractual relationship with their customers (Distributers, Legal, Accounting, Banking, Telecommunications, Consulting and Personal Services) and to a much lesser degree with non-contractual organizations like Departments Stores, mail order operators, charities, etc. Studies show that this is important for 3 main reasons:

1.     Duration (lifetime) and profitability show a strong relationship

2.     It costs less to keep customers than to create new ones

3.     Long term customers pay higher prices because they understand the value

So we can all agree that better Customer Relationship Management at worst maximizes profits and at best creates profit. But getting started properly is a real problem. As Bill Inmon, the father of data warehousing says, “the most expensive part of building a data warehouse is the planning”. This should also be true of efficient CRM; if it wasn’t then you will soon find out it should have been.

This article will focus on what I call the best principles of CRM. Start with a good foundation and everything else becomes a bit easier.

Don’t focus on technology too soon

Achieving good customer relationship management by purchasing and deploying CRM software alone is like attempting to achieve good transportation by buying a car engine. This is certainly an important part of the equation but in-and-of-itself won’t really get you very far. The best software system is only as good as the planning and process put into it. This usually means a constant reconfiguration and customization of the software trying to fit it to the business needs.

Involve Top Management from day 1

Top management always drives any successful enterprise wide initiative. There needs to be a clear, concise vision communicated across the organization. Without executive leadership strong willed associates will shape the final results to meet the needs of their departments or divisions. This usually causes a breakdown when attempting to scale their solution to other departments. Resistance is the word of the day. With top executive leadership and vision resistance is, to quote the Borg, futile.

Have and use a well vetted and certified sales process

This too should be driven by top management. Understand how people buy your product, why people buy your product and every step necessary to get from initial contact to close. If you have a home grown process I would suggest engaging a qualified sales consultant to review and revise it. This is the most often overlooked part of the process. Even if your sales process has served you well up to now, that alone can be your major barrier for reaching the next level.

Make sure employee compensation is in line with your new priorities

If you are pushing a new set of customer-centric priorities make sure your employees are compensated for achieving those goals not old goals, like sales numbers. If your main priorities are customer retention and customer satisfaction you should align your compensation with those goals. The most successful firms do this sooner rather than later.

Require compliance don’t request it

Unless you have 100% user acceptance it won’t work. As soon as you allow a single user to “do it their way” or ignore the system all together the battle will be lost. Using the system is a condition of employment, not an option. Don’t back off at the first sign of a problem or resistance, keep on pushing.

Plan for proper training and support

Don’t skimp on training for both the employees who will maintain and administer the system and those who will use it. The biggest mistake I see people make is to provide proper training for the administrator but expecting that the users will “figure it out”. This leads to poor user acceptance and dissatisfaction. Requiring users to use the system but not teaching them how will lead to poor job satisfaction and high turnover. Plan for proper user training both now and in the future by doing the following:

·         Train everyone that will be expected to use the CRM system.

·         Plan and budget to train new employees as they are hired.

·         Train multiple employees on maintenance and administration. Have a backup for all duties!

·         Plan and budget for support. If you are requiring your sales team to manage their business through the CRM system they must have easy access to support and quick resolution of issues.

·         Stay current with upgrades and enhancements. Your CRM system will evolve over time; the longer you wait to upgrade the more expensive and time consuming and potentially problematic that upgrade will be.

Conclusion

By following a few basic principles you can have a successful, scalable CRM system that will maximize your profits and formalize your business process. As the old business adage goes “We don’t plan to fail, we fail to plan”.

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