C-level personnel will drive the CRM industry to new heights in the coming years--here's why.
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Executives understand the secret to driving a successful CRM initiative. It's about enhancing customer-facing business processes (30 percent of the initiative's success), securing buy-in for the enhanced processes (50 percent of success), and then applying technology in support of the processes (20 percent of success).
An executive vice president for sales and marketing told ISM Learning Journey participants recently that the key value proposition for his CRM initiative resulted from the implementation of a new, multistage sales forecasting process. During a Learning Journey for a consumer packaged goods customer, I was impressed when this new process, designed by users and then configured into their CRM software, early on forces the company to drop leads from the pipeline that don't pass stringent qualification gates, allowing the sales force to focus attention on the most promising leads.
Executives demand valuable business insight. Vendors and industry pundits busy themselves creating new CRM categories, but executives remain focused on the basic need for powerful, easy-to-generate CRM business reports and easy-to-use analytical tools. These reports and tools help executives to better understand business performance. More important, they also help executives to more effectively coach their subordinates.
During a visit this summer to a biotech customer, the company president confirmed to me that he was about to pull the plug on his CRM initiative because he wasn't seeing promised payback. I asked what had been the benefit of the initiative's two new reports--close ratios and churn analysis--that he had said he needed to better run his business. He informed me that IT had not yet had time to produce these reports. I asked that he give the IT department time to complete the two reports and provide me an opportunity to coach him on how to use them. I returned some months later for the coaching session, which was also attended by his direct reports. The session went well, and all participants gained considerable insight into what drove the close ratio and what triggered churn. The exec was the one who had demanded valuable business insight into the company's CRM initiative.
An example of execs gearing up for the e-customer challenge occurred during my recent visit with the president of a manufacturing customer. We previewed the company's greatest business challenges over the next 18 months. Topping the list was how to address the new demands of the company's increasingly difficult distribution channel--in this case, plumbers, who the exec noted had PCs and had become e-plumbers. The e-plumbers now had instant, on-line access to product pricing from Chinese importers, Lowe's, Home Depot, and other competitors. Moreover, e-plumbers--armed with valuable pricing information--were quite good at playing one vendor off against the other. "E-customer loyalty doesn't seem to exist," the exec said. "It's a whole new ball game." The president was not intimidated, and initiated an aggressive e-business site that offers e-plumbers an array of impressive online services, including inventory status, order entry, order status, and credit card payment. Of note is the fact that these e-plumbers played a key role in helping to identify desired functionality. So here's to 2007, the year that executives take charge.
Barton Goldenberg is president and founder of ISM Inc., a CRM real-time enterprise consulting firm in Bethesda, MD. He is the author of CRM Automation. Contact him at firstname.lastname@example.org.
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