Technology is a big enabler to do more with less. Yet, certain things just cannot be achieved with technology. Especially when it comes to building relationships with your customers.
Despite this, more and more enterprises spend crores of rupees buying Customer Relationship Management (CRM) technology from big software firms.
And, majority of such investments have not given them the ROI and these companies are still seen as having poor relationships with customers. If relationships were built with just birthday cards and anniversary greetings, the world would have made life so easy! It is not just about customer data – period.
Simply put, CRM is a framework and infrastructure that enables businesses to target, acquire, retain and develop profitable customers with whom the company can establish a win-win relationship. CRM infrastructure integrates and aligns the people, processes and technologies of all the business functions that touch the customer – marketing, sales and after-sales service. More often than not, however, companies need to invest little in technology to initiate the fundamental principles of customer centricity.
Implementing CRM is not about implementing technology. Rather, CRM needs to be seen as a business mindset. Usually, companies must make a fundamental change in the way they do business by modifying their approach to sharing information and coordinating activities within the company to enable them to deal with each customer optimally. CRM projects have to be justified by ROI concepts, and results have to be delivered in a shorter span of time.
As business heads, we need to clearly define the vision and develop active strategies regarding customer relationships. To avoid blunders, before investing in CRM infrastructure, a company’s management must have a clear vision about the kind of relationship structure they want to build with customers and which active strategies would yield that structure. For example, if a bank wants to build a personal relationship with customers, then an active strategy would be to enable customers to have 24-hour access to bank personnel, which could be done by providing 24-hour access to a call centre. But very few banks still have this facility in India!
It will be a good idea to gain consensus in the company regarding CRM. The top executives must agree on a common customer vision and strategy, and review department and business unit strategies to ensure that everyone is aligned to the common goal. This alignment is critical to realising the goals of increased customer retention, loyalty and profitability. Establishing measurable business goals and defining metrics come next. Like any other enhancement system, managers can’t measure the effectiveness of CRM projects unless measurable goals and metrics are put in place. Examples of metrics for CRM projects can include customer churn rate, average revenue per customer, net prompter score and customer profitability. Make sure to get top management support upfront.
Before embarking on a project to implement CRM, top management must be squarely behind the project, sending a clear signal to the enterprise that the project is a key element of the company’s overall business strategy. And, get end-user buy-in upfront and maintain it. To ensure upfront and ongoing buy-in, marketers need to put in place a process to collect input from a diagonal cross-section of end-users. The more people involved, the better the acceptance of the initiative and the higher the chances for success. It will be advantageous to have a consensus-building project manager for implementation. One critical tactical element often overlooked during a CRM solution implementation is the need for an overall project manager who can effectively serve as a bridge among the various end-user groups and the implementation team. An effective project manager must have credibility with the user groups as well as the implementation team, and be able to mediate and build consensus on areas of potential conflict.
Ironically while enterprises make a huge investment into CRM technology they do not invest even a small amount for training and communication plans to enable and empower end-users. Many CRM initiatives are doomed from the beginning because of inattention to these two relatively inexpensive yet critical elements of success. Little do they realise the need for this investment perhaps because the CIO is driving this initiative and not CHRO. Keeping everyone abreast of updates, modifications, success stories and glitches is very crucial.
Finally, continuously measure and track results once the CRM capabilities are in place against benchmarks and targets. CRM is not a one-time, one-off project: It is a business philosophy aimed at achieving customer centricity for the company. Doing the necessary homework reduces the potential for making costly mistakes and greatly enhances the probability of extracting maximum value from a powerful business philosophy.
(The author spearheads execution and innovation for clients @CustomerLab)