2001 Volume 4 Issue 1

IT MATTERS: CRM Solution Seekers Beware!!!!

IT MATTERS: CRM Solution Seekers Beware!!!!

IT MATTERS: CRM Solution Seekers Beware!!!! - Graziadio Business Review

Lynda Palmer is an e-marketing strategist and Adjunct Professor of Marketing and e-business, Pepperdine University.

Customer relationship management (CRM) is becoming the buzz in the halls of marketing today. Why? A Siebel Systems Survey found companies that implemented effective CRM processes increased the volume of closed sales 15 percent, increased customer satisfaction by 21 percent and increased employee productivity by 20 percent.

Internet technology enables us to collect and mine data to obtain and use real-time results. It also has enabled interactivity, a two way conversation between customer and company. Finally, it enables mass customization of products and services in a much more cost effective manner than before.

This technological boon has created an onslaught of CRM vendors selling solutions to help companies improve their customer relationships. The CRM technology market is growing at 50 percent a year into a multibillion-dollar market. This offers both an opportunity and a threat for companies. CRM offers companies improved customer loyalty through a higher level of customer satisfaction and reduced cycle time, higher revenues and increased profitability through increased cross selling and reduced transaction costs, a competitive advantage by offering the ability to fill customers needs better than the competition.

So what is the catch??? The catch is EFFECTIVE CRM implementation. According to Dick Lee, author of several CRM related books, and a CRM consultant, over 70 percent of stand-alone CRM technology fails.

Why? Because companies skip the most important steps in implementing a CRM solution. Those are the planning and analysis processes. Many companies purchase a CRM system, and then adjust their business to fit the product. The goal of CRM is to create a customer centric process. Understanding the needs of the customer and designing the business processes to service those needs should be the primary focus of CRM.

So before a company even begins talking to CRM vendors, they should go through the following processes

  1. Analysis of the entire business process including understanding everything about the customers and the competitors. Also, understanding your company’s strengths and weaknesses with respect to customer retention and acquisition.
  2. Set goals and objectives for improvement.
  3. Analyze workflow processes to determine if they are customer centric. Specifically look at how customer information comes in and is processed.
  4. Reengineer the workflow process to become more customer centric.

This will begin to give you a blueprint for process improvement, which is where the technology solutions come in. The CRM technology is designed to improve the flow and efficiency of information between the customer and the company.

In most software projects, 60 percent of the project is analysis and planning and 40 percent is the implementation. Unfortunately, the 70 percent CRM failure rate is due to the fact that the 60 percent analysis and planning stage is often skipped, and companies buy solutions and fit their problems and processes around the solutions. So a successful CRM implementation begins with good, old fashion analysis and planning.

Want to know more about CRM? Here are some web sites:


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Author of the article
Lynda Palmer,MBA
Lynda Palmer,MBA
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