CRM implementation’s often fail! It isn’t to do with the technology or the software but the issue lies more in the Organization dynamics. Who drives CRM-is it the CMO’s job or does the CIO take the initiative? Who really owns it & how it can be co owned across key members of the company’s hierarchy? But it needn't be like this, CRM can succeed!
According to me, there are a few key questions that CEO’s should ask themselves before they set off on this strategy
- Should we move incrementally or do a big bang CRM implementation? Moving incrementally would involve taking on specific aspects of CRM & ensuring you have a “winning case study” before going on to the next piece.
- CRM can broadly have 3 pillars: Service, Sales & Analytics. Where would you like to start? Analytics is the most central & would impact a smaller number of employees to begin with & therefore could be an easier start. Both Sales & service would impact large workforces & need significant change to happen.
- Should technology adoption precede the move or should there be an aggressive move to change Process & structure first & then a sequential move on to the Technology adoption?
- How the CRM initiative should be launched within the organization. How do you give it the thrust similar to the launch of a “new product or service” in the marketplace?
Mc Kinsey has this interesting approach where they talk about companies treating a CRM solution as a product or service & its users as internal customers.
Read more about it here:
Organizing for CRM
As a customer , you do not know the “service moment” until you do not get it! It is only when at the bank they cannot give you a print out of your transaction summary that you recognize that a “service moment” has slipped. There would be thousands of other transaction which would have gone through without a hitch, but as a customer you remember that one negative experience.
The biggest challenge that service marketers therefore face is that their brand experience is fragmented. You can make a great TV in the factory and all your quality processes provide that product the way it was manufactured in the hands of the customer.
In the case of a Retail store, even the quality of the rest rooms determines the customer’s image of the brand. In FMCG & some other sectors, the marketers largely depend on advertising to disseminate information about the qualities and benefits of the products being offered. Either the features highlighted fulfill an unmet need or are key differentiators to prove their product superioriority to the competition. This results in customer-pull, even as on-the-ground sales forces push the products. To be fair, across many product categories that do not need to collect any customer information, this is the best option available until such time they conduct market surveys and tweak their product offerings in response to the customer feedback.
Some industries, however, like financial services, telecom, travel & hospitality, retail where databases can be created and programmes - whether marketing or loyalty - created are well-placed to make more evolved and personalised product offerings as per requirements and segments. Another important aspect about the data in these industries is the fact that nearly all of this data is given voluntarily by the customers to improve their quality of service or is created due to the transaction with the service provider. This is unlike the consumer goods industries where companies have to actively collect the data that the customer may not have much incentive or reason to give, and there is no guarantee that the data shared is accurate. In fact, because of the vast amount of quality data at their disposal, running into many terabytes, these industries are ideally placed to conduct marketing campaigns in a non-traditional and more scientific manner, using the data.
This has a huge impact on the composition of the marketing teams. Most marketing in the past was truly “right brain thinking” where the creative aspects were the most important. In services marketing where there is a lot of data, marketing becomes much more analytical & “left brain” oriented. It also becomes much more focused on “audience knowledge” as against “media knowledge”.
How do you create a Customer marketing organization? Strong customer relationships are now critical for success in many businesses. Companies have recognized this & invested millions of dollars in technology for making this happen. But companies are now getting enormous amounts of customers data! And it is imperative that they create insight & action from that data.
In spite of this there are more failures out there in the CRM space than ever before?
Why is this happening? Clearly the challenge is large! At one levels Marketer’s have not been able to bring in people with relevant customer centric skills to make an impact. And because of this many of the CRM programs have found huge barriers because of the “silo mentality” that always exists.
A lot of research that Mc Kinsey has done shows that company “organization” is a critical & often overlooked factor in driving CRM performance. Who truly owns the customer? Existing structures create conflict over that-in a Retail bank-is the customer owned by the “branches” or by the various “product groups”.
At the core of any Customer Marketing organization is the Analytics team-many names for this abound: Business Intelligence unit, Customer Intelligence unit etc. How should the analytics competency be structured, should it be centralized or de centralized? How can it make an impact on business?
Here is an interesting insight from Accenture:
How should companies in the emerging markets structure the Customer Marketing organization? What role does a Customer Intelligence unit have to play? Who should it report to? How much of this should be outsourced( Quick admission-I am in the business of outsourcing analytics amongst other things)
More on this later!!
It is almost given today that if you as a marketer launch this big bang "CRM initiative, then you are likely to fail! More than half the companies who have implemented some form of CRM believe that the effort failed! Most companies have not paid enough attention to the "change management" that needs to accompany any major CRM program. Successful companies have reported that they spent between 3 to 5 times the CRM technology costs in "change management initiatives". Mc Kinsey has this interesting view that companies should view CRM as any other product or service ,only that it is targeted at internal customers. Like any other product or service it must have clearly defined value, be priced appropriately, advertised & provided with adequate after sales support. How do you effectively structure your company for CRM and how do you "failure proof" your organization -read an interesting take from Mc Kinsey Organizing for CRM