Crm done right

CRM DONE RIGHT
HARVARD BUSINESS REVIEW

Frustrated by high costs and dubious payoffs, managers that used the first customer-relationship management (CRM) systems came to view them as overhyped ITinvestments. Accordingly, CRM spending plummeted between 2001 and 2003. But now CRM system sales are soaring, as executives from a wide variety of industries tout CRM's value.

What's changed?Rather than trying to transform entire businesses through full-scale CRM implementations, companies are applying CRM in disciplined, focused ways--and getting more from it. How to realize the same benefitsfrom your CRM initiatives? Use CRM to solve highly specific customer-relationship challenges--such as accurately diagnosing call center customers' problems. Invest in real-time information--the holygrail of CRM--only where it's needed. For example, a hotel manager requires real-time data on room availability, not on customers' opinions about room decor. Equally crucial, use what you learn fromsuccessful smaller CRM projects to tackle larger problems. By knowing where in your business to deploy CRM, and how, you stand to score impressive revenue gains--as companies like Kimberly-Clark,Ingersoll-Rand, and Brother have done.

To decide where and how to use CRM technology, ask four questions:

Is It Strategic?

Before spending a dime on CRM, identify the processes that most supportyour company's strategy. Target them for improvement through CRM.
Aircraft-parts distributor Aviall Inc. needed a well-trained sales force to achieve its strategic objective: becoming the premierindustry provider of supply-chain management services. The company installed only those CRM elements required to enhance sales-force and order-entry productivity.
Sales representatives now had instantaccess to customers' credit history, a streamlined order-processing system, and the ability to deliver firm quotes immediately. They tripled their daily number of sales calls and expanded their...