Friday, January 6, 2012

6 Ways to Ensure your CRM has High Impact

The purpose of business is to create and keep a customer”- Peter Drucker.

The above defines the objective and goal of business in extremely comprehensible and basic manner. It however embodies the basic fact of the business world. Customer is what a business caters to, at the end of the day. And CRM emphasizes the relationship in its name.

Is CRM the sure shot formula for success? What has been the trend among businesses that have adopted this popular evolving since past two decades? Do we have a confirmed answer for this? Or is there another dimension to consider? Let’s look at some statistics related to data analyzed by different research firms over the last decade or so -

2001- Gartner Group: 50% CRM Failure Rate
2002- Butler Group: 70% CRM Failure Rate
2002- Selling Power, CSO Forum: CRM 69.3% Failure Rate
2005- AMR Research: 18% CRM Failure Rate
2006- AMR Research: 31% CRM Failure Rate
2007- AMR Research: 29% CRM Failure Rate
2007- Economist Intelligence Unit: 56% CRM Failure Rate
2009- Forrester Research: 47% CRM Failure Rate

The failure rate of CRM solutions as analyzed by these firms has been clearly and consistently on the higher side. Though the firms analyzing data are different and may have used different parameters for their study, the figures definitely demand attention and seek answers.

So, looking at the above figures, should it not be assumed that CRM could be losing flavor with time. However, that is where the bigger anomaly lies.

CRM as a concept has been growing consistently; improving and improvising technically, getting a deeper penetration in the market and getting a bigger chunk of budget allocation year on year, by companies big and small. Statistics focusing on this aspect:

Research Organization
2004 IDC Research
Worldwide spending on SaaS touched $4.2 billion, 39% increase over 2003.
AMR Research
Hosted CRM sales reached $403 million, thereby posting a growth of 105%.
2005 Customer Interactions Solution Magazine
Global CRM software revenue was $7 billion, 13.7% increase over 2004
2006 AMR Research
CRM spending reached $12.6 billion mark
2007 AMR Research
With a 12% jump over previous year, CRM software market reached $14 billion
2009 IDC Research
“By the end of 2009, 76% of US organizations will use at least one SaaS delivered  application for business”
2010 Gartner Executive Programs (EXP) CIO agenda survey
attracting and retaining new customers will be the No.5 business priority for CIOs in 2010
2011 Gartner Group
CRM SaaS is forecast to grow 26% annually through 2011.
Gartner also predicted that by 2011, 25 % of new business software will be delivered by SaaS
2012 Gartner Group
Forecasts more than $12 billion overall spending on CRM software.  Spending on  social software will exceed $1 billion worldwide by 2013

Now, considering the statistics in both categories, a feature that emerges paramount is, in spite of the hiccups, CRM has grown and is further poised to grow. It further establishes the fact that companies do understand the importance of CRM and view it as a necessary requirement. Another detailed research can go into what causes CRM implementation failures or why are companies not able to reap full benefits of the system. But the entire situation highlights one prime objective- Organizations realize the potential of CRM solutions, however the need is to fully understand the utility and effects that,

a) will be brought by the new deployment
b) change management once the new system is implemented.

Maximizing the impact and utilizing the complete potential of CRM solutions, by driving that change in organizations, which is not just technology based, but is an integrated strategic methodology is High Impact CRM.

CRM could have been a management tool focusing on driving sales and numbers during infancy, but increasingly the idea is to adopt it as a strategy implementation tool. High Impact CRM works on that idea. The focus here is to look at the concept as a whole and if need be re-working the modus operandi as per the changing needs and requirements of the business environment.

Taking up a CRM initiative without clear objectives and measurable goals, acts as a big challenge later on. It is not a market frenzy that needs to be adopted just because it’s the trend. Neither is it a software solution that just needs to be deployed and used like any other technical tool. Allocating the budget, getting the applications on board and imparting training to end users, does not guarantee CRM success. When classified as a strategic tool, the focus moves to people and the overall sentiment of change involved. The importance of usage and the benefits need to be understood at every level in the organization.

"Successful CRM is about competing in the relationship dimension. Not as an alternative to having a competitive product or reasonable price - but as a differentiator. If your competitors are doing the same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over the long haul." - Bob Thompson, CustomerThink Corporation

The impact of CRM solutions varies from organization to organization. On-premise, cloud CRM, Social CRM; the technology is changing and the advancements are for everyone to reap. The premise also remains that ultimately the focus is Customer Relationship Management. However, companies can only benefit the most if the following factors are considered and applied well in advance:
  • Know your own requirements first - Every organization, even within the same industry domain, can have different requirements. It’s important to evaluate one’s own objectives and desirability and have an exact idea of expectations.
  • Define success - Before implementing the project, have quantifiable targets for deployment. Higher sales numbers, greater customer satisfaction, higher customer retention, increase in productivity, better transaction experience; to name a few. Not all of these are measurable in absolute numbers, but the agenda should be to focus on these factors as well and they should also be measured up to define the success or failure of CRM. Having right parameters and metrics plays a critical role in CRM implementation.
  • Educate the organization - it’s not just the user who needs to be aware, but the entire organization needs to be prepared for the change and should be aware of the advantages of the system.
  • Take care of cultural change - an organization that has been running in a particular fashion for some time, might require a change in culture. The focus has to shift to being customer centric at all times and during all transactions.
  • Special focus on all customer touch points - It is not just face meetings or telephonic conversations, which are important. When talking about the overall experience; everything right from pitching the product, giving quotes, follow ups (both verbal and written), sales process, billing, references, becomes crucial. For achieving maximum impact this feature needs definite focus. What would also ensue alongside is high level of inter departmental co-ordination. In effect what this would make internal customers within the organization equally important.
  • Understanding the evolution - Since the environment in which organizations operate these days is highly dynamic, an understanding of the fact is important that new features, ideas, applications would be incorporated time and again. CRM is a highly developing concept and organizations need to be aware of these changes and also analyze where their own benefit lies.
If all of the above factors are considered, what emerges as an obvious fact is that CRM implementation is not a just a technical change but an overall strategic turnaround. And that is what a High Impact CRM solution can do for an organization. It is a strategic move and is far beyond just technicality. The impact can be understood from the fact that if implemented in a planned and phased manner, the concept can finely integrate the organization from top to bottom, identifying a common goal and seeking overall efficiency and growth on every level.