But the defi nition of CRM is as volatile as the market itself. For some companies, CRM means changingtheir entire focus from products to customers.
For others, it means ensuring that existing customers remain loyal, and that new customers are converted to valuable ones. Some companies intend to integrate and add to their customer data with the aim of differentiating themselves via innovative products and services.
As many companies have already learned the hard way, CRM involves more than simplyselecting a technology vendor. As author and Baseline partner Jill Dyche explains in her best-selling book, The CRM Handbook:
CRM is the infrastructure that enables the delineation of and increase in customer value, and the collection of means with which to motivate customers to remain loyal—indeed, to buy again.
CRM is really about mutual benefit: In knowing its customers better, a companycan act on that newfound advantage to maximize customer loyalty and profitability. And customers get more relevant communications and better service in the bargain. CRM, by its very definition, is a win-win proposition.
The fact is, CRM involves five separate, and equally-critical, components to benefit both a company and its customers:
A company must be able to articulatecustomer-focused objectives. This not only means the company’s strategy must be customer-centric, but that its branding, advertising, and sales processes factor in that customer focus. Burger King’s “Have it your way,” ad wasn’t just a catch-phrase, but a customer-centric vision that resulted in tactics, and a slogan that became part of the American vocabulary.
2. Business Processes
One of CRM’simplicit goals is to improve the customer experience. Companies should recognize that improving business processes means not only making sales and support more customer friendly, but streamlining these processes to make it easier for the customer to do business with them.
Information about customers, sales, financials, products, and purchase behaviors can be mined to yield somepowerful results. Successful CRM projects mandate that meaningful, sustainable data be deployed throughout the enterprise to unify decision-making and provide the so-called “single version of the truth.”
CRM often means that our customer-facing staff members—be they salespeople, branch employees, call center reps, or repair personnel— change the way they do their jobs. A callcenter CSR, for instance, might be asked not only to troubleshoot, but to cross-sell new products and services while the customer is on the phone. Banks are currently re-designing their branches to become sales centers, complete with sofas and hot coffee, to improve the customer’s banking—and buying—experience. Such paradigm shifts require well-planned staff training, expectations management, andoften re-vamped compensation structures to motivate organizations to change.
Software can enable improvements to the four areas listed above. However, acquiring CRM technology is the easiest of the five, which is why companies make the often-irrevocable mistake of starting there. Only after a company has defined its CRM objectives, documented requirements, and managed theexpectations of its stakeholders should it begin talking to software vendors.
COMPANIES ARE DISCUSSING CRM OR DOING Why is there still so much buzz about CRM?
With all the inherent complexities of the five components described above— and with the failure statistics rampant in magazines and industry journals— why are companies continuing to jump onto the CRM bandwagon? In a word: Profitability....