hard lessons from crm

8/6/2019 Hard Lessons From CRM

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Vendor Guru

Hard Lessons from CRM Experience:

Six Mistakes to Avoidby Richard Barrington



Page: 1

Contents

Introduction......................................................................................................................................................2

Six Problem Areas in CRM..............................................................................................................................2

1. Lack of strategic goals......................................................................................................................2

2. Data problems...................................................................................................................................2

3. Too much, too soon...........................................................................................................................3

4. Lack of adoption...............................................................................................................................3

5. Inappropriate technology..................................................................................................................3

6. Excessive customization...................................................................................................................3

Case Studies: Overcoming Early CRM Hurdles...............................................................................................3

Conclusion........................................................................................................................................................4

Sources..............................................................................................................................................................4

About the Author...............................................................................................................................................5

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Introduction

Many business professionals consider customer relationship management (CRM) the new frontier in

marketing. Despite widespread integration of CRM technologies across the globe, companies are still

learning how to adopt and adapt new CRM applications, and how to choose systems that best align with their

respective business needs. While some businesses have ventured into CRM territory unscathed, others have

stumbled and been forced to re-evaluate their strategies to avoid repeat mistakes.

Whether they’re rolling out a new technology or trekking across the Oregon Trail, the rst pioneers who

venture into uncharted territory often encounter the most resistance. In the early years of CRM, for example,

the most forward-thinking and ambitious companies faced the most critical issues, many of which can still

pose serious problems today. Nevertheless, when today’s executives evaluate CRM applications, they have

the advantage of learning from the various miscalculations of those who came before them.

Six Problem Areas in CRM

Specic CRM mistakes are too numerous to mention. After all, implementing a CRM system is both a

signicant technology project and a disruptive change in business processes. However, most CRM errors can

be grouped into six major areas:

1. Lack of strategic goals. CRM software should be thought of as a tool for implementing a strategic

vision, not as a substitute for that vision. CRM goals should be centered on increasing protability by

getting more out of customer contacts. This can include better targeting of customers, improved customer

retention rates, increased cross-selling, and more efcient handling of customer inquiries.

Companies can also increase protability with their CRM system by analyzing metrics. By quantifying

customer data, an organization can calculate a return on investment for its CRM system and rene its

marketing strategy if needed. Without these goals, a CRM system is little more than a simple repository of

customer data.

2. Data problems. Data problems come in a variety of forms. Some data simply may be inaccurate or

out-of-date due to poor recordkeeping, while the rest may be meaningless because of poor organization,

processing, or accessibility. The lack of good analytics can make it virtually impossible to turn raw

customer data into valuable information that sales teams and management can use to make informed

business decisions. Finally, data security should be a substantial part of any CRM plan, no matter how

small or how large the company using it. The more (and better) data a company assembles, the more it has

to lose.

3. Too much, too soon. The exciting potential of a CRM system sometimes gets the better of an

organization’s planners, causing them to implement too ambitious a program all at once. Unfortunately,

this can overwhelm the company’s technical

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staff and place unrealistic demands on its technology infrastructure in the process. An incremental approach

can allow a company to build toward a more ambitious CRM application via a series of manageable steps.

4. Lack of adoption. One of the most common frustrations with CRM systems is getting the technology in

place only to see little or no user adoption. To help avoid lackluster acceptance, roll out the new program to

all departments of the organization. This may slow the start-up a little, but can make implementation much

more effective in the long run. It is particularly imperative that the sales team is on board with the CRM application. While easier said than done, start by getting to know some of the team’s pet peeves--whether it’s

time-consuming reporting, a lack of product support, or not enough marketing initiative--and then position

the CRM system to them in terms of how it can solve these problems.

5. Inappropriate technology. Most CRM systems are not inherently “good” or “bad,” just misused. A hosted

CRM solution, for example, may be ideal in one case but burdensome in another. Also, a platform that works

well at limited volumes may fall apart when growth or merger and acquisition activity changes the scale.

6. Excessive customization. In the excitement over the potential for constructing detailed customer prolesand automating the most complex work processes, an organization may go overboard and add too many

custom features. Excessive customization can slow implementation, disillusion users, and make the system

harder to synch up to upgrades in the CRM software. A little discipline goes a long way when prioritizing

which features a company needs and which features may be more suitable ve years down the road.

Case Studies: Overcoming Early CRM Hurdles

The following CRM problems should not be interpreted as criticisms of the companies involved. In fact, many

of these companies encountered these problems because they were the very rst ones to adopt such an extensivecustomer relationship management system. In essence, these case studies illustrate how the pioneers of CRM

uncovered and overcame the initial hurdles of their maiden voyage into the world of customer relationship

management.

•As bets a technology company, Absolute Software saw ample opportunities to customize its CRM

system. However, during the rst round of system upgrades, some of the non-standard components

became less effective and eventually had to be scrapped. Going forward, Absolute opted for a more ex-

ible platform that allowed for easier upgrading and smoother adoption by their sales team.

•When First Union bank acquired CoreStates, it did not allow adequate time for data conversion or

training to handle the transition of CoreStates customers and employees onto the First Union CRM sys-

tem. Customer service suffered as a result, and nearly 20 percent of CoreStates customers moved




to a competitor. This “too much too soon” dilemma forced First Union to place customer service and

CRM integration at the forefront when planning future mergers.

•When automaker Mazda wanted to implement a detailed customer loyalty program, it found its dis-

parate databases unable to adequately correlate the necessary information. For example, their vehicle

database was organized by vehicle identication number, while their marketing database was arranged

by customer name. This led to extensive data overlap. To combat this issue, Mazda put more emphasis

on data integration and cleansing when it undertook its next round of upgrades.

•Sometimes the medium is just as important as the message. Computer maker Dell tried to reach stu-

dents via a promotion on its Web site, only to nd that its target market was much more likely to be

reached by text message. Although Dell quickly adapted their mobile campaign strategy, that initial

hurdle is an example of problem area #1, a lack of strategic goals.

•Retailers TJ Maxx, OfceMax, Barnes & Noble, and BJ’s Wholesale Club are just a few of the com-

panies that have been victimized by theft of customer data. In many cases, this was accomplished by

hacking into data via the Internet, highlighting a risk of hosted CRM solutions. At the same time, thetheft of laptops containing sensitive information show that having the data on-site is no less risky than

hosted CRM.

Conclusion

Ultimately, the problems and case studies identied in this white paper do not represent failures, but illustrate

how companies of varying sizes have battled, successfully, their own CRM difculties. Subsequent buyers of

CRM applications can learn these same lessons, and, hopefully, without the cost of rst-hand experience.

Sources

Page: 4

BTN Magazine, The Ten Biggest CRM Mistakes

CIO.com, April 1, 2004, Customer Relationship Management (CRM) -- Banks Fight Customer

DM Review, July, 2002, Customer Relationship Management: Practical Tips for Successful

Implementation

Inside CRM, 5 CRM Mistakes Smart Companies Make... and How to Avoid Them

Microsoft.com, Make the Most of Customer Relationship Management (CRM)

SearchCRM, June 17, 2008, CRM Case Studies

TechNewsWorld, August 6, 2008, Feds Throw Book at 11 Customer Data Theft Suspects

ZDNet, March 18, 2002, Six Mistakes That Will Sink Your CRM

ZDNet, May 19, 2002, Why integration will make or break your CRM plans

©VendorGuru.com All Rights Reserved www.vendorguru.com



About the Author

Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment

industry executive.


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