The Seven Myths
The most consistent thing about CRM is the inconsistency that surrounds it. Companies spend millions of dollars on software purchases, integration and implementations, and then fail to successfully implement the CRM process. These failure and discard rates are constantly published in various CRM publications and on websites, yet the prognosis for CRM is very positive. Experts agree that spending on CRM will increase in the next few years.
This presents an interesting dilemma. Why would companies jump on the bandwagon knowing that their colleagues and competitors may be failing? And why would the experts continue to tout the benefits (ROI?) of CRM when so many of their clients are not achieving desired results? The answer is really simple.
These companies are living the seven myths of CRM. Their success will be directly related to their ability to recognize these myths in their own company and to focus on the truths of CRM. The remainder of this article will identify those seven myths, explain why they exist, and then talk about the truths that companies must seek for ongoing CRM success.
MYTH 1: CRM is about managing customers
TRUTH: CRM, as it exists today, is more about managing data than customers. The standard definition of management is control. We see it all the time inside of a company where the managers attempt to "control" their direct reports. Spending too much time on the management aspect of CRM is a prescription for failure.
Customers do not want to be controlled. They do not want to be told what to do or how to buy. Yet, a customer management approach would focus on that. Companies do not and cannot manage their customers. Customers want to manage themselves. The real truth is that if companies would focus more on the Relationship aspect of CRM, they would be more successful.
MYTH 2: Analytics is the key to success
TRUTH: Analytics is merely another way to slice, dice and chop the data. Sure, it can give you unique pictures of customer purchase habits, CIC contact behaviors, and company involvement, but it cannot give you what the customer wants and needs. The customer wants true and human personalization.
Analytics can determine exactly what a customer has bought in the past, probably what they prefer to buy in the future, and how they want to buy it. Then, the system can "throw up" some ads or recommendations for purchases that would hopefully intrigue and motivate the customer to buy. But, is that truly what the customer wants?
It has been my experience that the customer still wants the human touch. They still want to talk with a person, interact with a "warm body", and get their problem resolved or purchase confirmed by a real person. Analytics are important to CRM success, but anyone who thinks that constantly gathering more data, and that slicing and dicing that data takes the place of caring people who communicate with customers is sadly mistaken.
MYTH 3: Technology breeds/builds relationships
TRUTH: This myth is closely related to Myth #2. Companies that have the latest and greatest technologies still do not always have a great relationship with their customers. The philosophy of "if you build (buy) it, they will come" is totally inappropriate and misleading. I know of companies that have spent millions of dollars on technology purchases and still have that software "sitting on the shelf". I know of other companies that have spent similar amounts of money and they still do not know their customers any better than before.
Having great technology does not guarantee that customers will buy from you, nor does it guarantee that you will truly know your customers any better than if you had a lesser technology. Always remember that technology has nothing to do with relationships; people do.
MYTH 4: CRM success comes from full-scale implementation
TRUTH: This is probably why so many CRM implementations fail to achieve their desired or expected results. Companies are so hot to get on the latest technology bandwagon and to make up for lost time in the "CRM Space", the buy the entire "kit and caboodle". Full-scale implementation is not for everybody. In fact, there are several reputable CRM experts who will tell you that phased implementation is the best way to go. This way, you make sure each preceding phase is working and creating its own return on investment before moving on to the next purchase and phase of CRM.
The other problem with a full-scale implementation is that it takes "forever" to get everyone trained on the software, not to mention getting them on board with the corporate culture change. If CRM is also about change management, as many agree that it is, then we need to follow the principles for effective change management. Namely, do it in stages to generate internal acceptance from employees and external acceptance from customers due to the new ways of doing business.
MYTH 5: People (employees) will always adapt to and adopt the new technology
TRUTH: Since it is people who will make the CRM process work, then it is people who must learn how to use the new technology. Unfortunately, not everyone easily adapts to technology changes, while others do not readily adopt those changes. The truth is that a mindset change as well as a corporate culture change must first occur before companies can expect their people to embrace the new CRM technology.
Now, I'm not saying these people will sabotage the effort. More likely, they will do whatever they can to get by rather than fully embracing their "new way to work". Before any company can expect a CRM implementation to be successful, they must first make certain that all their people are on board with the effort.
MYTH 6: CRM is on the downswing because of high failure rates
TRUTH: CRM is on the upswing, and it will become even more prevalent. Let's face it. CRM is really nothing new. The corner grocer of 50 and 60 years ago knew everything about his customers: what they purchased, how much credit to extend, when they would be in to shop, etc. Now, we have technology to help us remember these same facts.
The high failure rates attributed to CRM implementations are due to three factors, as I see it:
1. Early adoption of a technology platform before making certain the company had a strategic CRM plan in place along with the appropriate processes and the people to implement CRM.
2. Dropping the CRM bomb on employees instead of taking them through a culture change and preparing them for their new way to work.
3. Focusing on the internal workings of the new CRM implementation instead of getting customers involved and creating a CRM process that works the way the customer wants to do business with the company.
MYTH 7: CRM, as we know it today, is for everybody
TRUTH: At least, that's what many software vendors and consultants will have you believe. While it is true that there are CRM products available for every size company, high-level CRM is not for everyone. Many companies will survive and thrive very nicely by just focusing on quality customer service, customer retention, and customer loyalty.
Now, I personally think that this is also CRM, but in a different form. And if it is, then maybe we have to look at how these non-high-tech companies are successfully implementing their "CRM".
Let me end this article with a true story. I was speaking in L.A. a while back on CRM and went to a small restaurant for breakfast. The waitress knew every regular who came in, what they wanted for breakfast, where they wanted to sit, and what was going on in their personal lives. he even treated me as a regular by asking questions like what brought you to the restaurant? Do you always eat this for breakfast? And will you be coming back any time soon?
These were great questions, and to me, she was practicing CRM at its best. And with no technology at all. She was working on building relationships, rather than managing customers.
[Richard Gerson is President of Gerson Goodson Inc.]