The Eight Myths of CRM
There's no "short cut" to customer enlightenment - instead, companies must do the hard work to understand customer processes, issues, and opportunities, set clear goals (supported by specific actions and metrics), and prioritize the "long list" of possible projects into a series of steps that can improve customer value and demonstrate results.
Posted May 9, 2002
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Question: I keep hearing about the awful CRM failure rates. Why is CRM still so difficult? Answer: It's hard to open a trade publication, newsletter, or industry white paper without reading about the high failure rates in CRM and the newest "answer" to CRM success. Unfortunately, CRM often ends up sounding more like a religion than a business initiative, with high-level mantras and noble "solutions" designed mainly to drive the next consulting project. CRM project managers must debunk the myths and manage executive and business user CRM expectations or risk another round of "flavor of the month" enthusiasm followed by inevitable disillusionment. Myth 1: CRM can be purchased. Despite lip service to organizational change management and process alignment, most companies still earmark at least 75% of CRM budgets for technology - not people or process - investments. Often, companies with the best CRM processes actually have very little technology, instead relying on simple tools and organizational incentives (backed by clear CRM strategies) to get results. Myth 2: Customers can be managed. Too many companies try to force customers towards a "management" objective such as profitability or cost reduction. In the "all volunteer" demand chain, every participant must be encouraged with a clear core value proposition and the right incentives to participate. Customer-centric companies start with customer objectives, and then figure out how to match customer needs with the right products and services. Myth 3: Sales can be automated. Forget about collecting extensive data from the sales reps or dictating how they spend their time. Instead, focus on offloading routine tasks such as collateral fulfillment, order status inquiries, paperwork, and quoting / proposal generation, and on delivering better, more qualified sales leads to shorten the sales cycle. The best CRM lets sales people do what they do best - selling - and employs technology around - not at the center of - the sales process. Myth 4: Start with a 360-degree customer view. Setting complete integration as the first priority for CRM is akin to proposing "world peace" as the first step to help the poor -admirable, but doomed to sink under the weight of high expectations and complex execution. Instead, prioritize information that can improve the customer experience or help the company make a better decision (cross sell, retention, etc.). Putting integration in the context of the important interactions with top customers helps turn a multi-year architecture project into a roadmap for incremental improvement and value.
Myth 5: Integration is a product. Right behind the "integrate first" consultants are the "we integrate it for you" software vendors. Siloed business units or departments, conflicting business processes, and different incentives are often the underlying cause of integration woes, and must be addressed up front. Products must still be customized to reflect business-specific flows and exception processing. There's nothing simple about integration and no easy answer to getting different organizations to work together on behalf of the customer. Myth 6: Customer retention means service. Customer service can improve customer satisfaction and reduce costs - but shouldn't be viewed as a primary vehicle for retention management. Satisfied customers can still leave, service relationships usually are not with customer decision makers (especially in B2B), and customer service doesn't have the relationships or selling skills to play more than a supporting role in customer retention. Instead, retention management requires its own processes to reward positive behavior, encourage more frequent activity, and proactively win back customers who have begun to consider other solutions. Myth 7: One size CRM fits all. In an industry focused on "one to one" personalization, vendors still insist (and companies still want to believe) that there is a single "best" solution to all CRM problems and customer types. "Magic quadrants" aside, the right CRM solution and business approach depends on what you're trying to accomplish. If you can't define who the target user is, what the customer processes are, and where the opportunities are to improve the customer experience and capture value, you're not ready to select CRM software. Period. Myth 8: If you build it, they will come. The web is littered with under-utilized e-commerce and e-service sites attempting to help customers and partners who never show up. Build in usage and diagnostic metrics as you implement new processes and watch carefully for areas where user acceptance is low. Don't launch new CRM functionality without pilot testing with representative users - and plan to revise the application quickly as user obstacles surface. The most successful CRM project teams spend as much time on marketing, rollout, training, and user testing as they do on software implementation. There's no "short cut" to customer enlightenment - instead, companies must do the hard work to understand customer processes, issues, and opportunities, set clear goals (supported by specific actions and metrics), and prioritize the "long list" of possible projects into a series of steps that can improve customer value and demonstrate results.
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