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INTRODUCTION TO CRM

Evolution of CRM

Customer Relationship Management (CRM) is one of those magnificent concepts that swept

the business world in the 1990’s with the promise of forever changing the way businesses

small and large interacted with their customer bases. In the short term, however, it proved to

be an unwieldy process that was better in theory than in practice for a variety of reasons. First

among these was that it was simply so difficult and expensive to track and keep the high

volume of records needed accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking features

have vastly improved CRM capabilities and the real promise of CRM is becoming a reality.

As the price of newer, more customizable Internet solutions have hit the marketplace;

competition has driven the prices down so that even relatively small businesses are reaping

the benefits of some custom CRM programs.

In the beginning…

The 1980’s saw the emergence of database marketing, which was simply a catch phrase to

define the practice of setting up customer service groups to speak individually to all of a

company’s customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of communication

open and tailoring service to the clients needs. In the case of smaller clients, however, it

tended to provide repetitive, survey-like information that cluttered databases and didn’t

provide much insight. As companies began tracking database information, they realized that

the bare bones were all that was needed in most cases: what they buy regularly, what they

spend, what they do.



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Advances in the 1990’s

In the 1990’s companies began to improve on Customer Relationship Management by

making it more of a two-way street. Instead of simply gathering data for their own use, they

began giving back to their customers not only in terms of the obvious goal of improved

customer service, but in incentives, gifts and other perks for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points on credit

cards and a host of other resources that are based on CRM tracking of customer activity and

spending patterns. CRM was now being used as a way to increase sales passively as well as

through active improvement of customer service.

Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management (CRM) is to

enable organizations to better serve its customers through the introduction of reliable

processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be

implemented by only installing and integrating a software package designed to support CRM

processes. A holistic approach to CRM is vital for an effective and efficient CRM policy.

This approach includes training of employees, a modification of business processes based on

customers' needs and an adoption of relevant IT-systems (including soft- and maybe

hardware) and/or usage of IT-Services that enable the organization or company to follow its

CRM strategy. CRM-Services can even redundantize the acquisition of additional hardware

or CRM software-licences.



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The term CRM is used to describe either the software or the whole business strategy oriented

on customer needs. The second one is the description which is correct. The main

misconception of CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering

and processing, and self-service. It attempts to integrate and automate the various customer

serving processes within a company.

In recent years however, several factors have contributed to the rapid development and

evolution of CRM. These include: -

1. The growing de-intermediation process in many industries due to the advent of

sophisticated computer and telecommunication technologies that allow producers to directly

interact with end-customers. For example, in many industries such as airlines, banks

insurance, software or household appliances and even consumables, the de-intermediation

process is fast changing the nature of marketing and consequently making relationship

marketing more popular. Databases and direct marketing tools give them the means to

individualize their marketing efforts.

2. Advances in information technology, networking and manufacturing technology have

helped companies to quickly match competition. As a result product quality and cost are no

longer significant competitive advantages.

3. The growth in service economy. Since services are typically produced and delivered at the

same institution, it minimizes the role of the middlemen.



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4. Another force driving the adoption of CRM has been the total quality movement. When

companies embraced TQM it became necessary to involve customers and suppliers in

implementing the program at all levels of the value chain. This needed close working

relationships with the customers. Thus several companies such as Motorola, IBM, General

Motors, Xerox, Ford, Toyota, etc formed partnering relations with suppliers and customers to

practice TQM. Other programs such as JIT and MRP also made use of interdependent

relationships between suppliers and customers.

5. Customer expectations are changing almost on a daily basis. Newly empowered customers,

who choose, how to communicate with the companies’ various available channels? Also

nowadays consumers expect a high degree of personalization.

6. Emerging real time, interactive channels including e-mail, ATMs and call centre that must

be synchronized with customer’s non-electronic activities.

7. In the current era of hyper competition, marketers are forced to be more concerned with

customer retention and customer loyalty.

8. As several researchers have found out retaining customers is less expensive and more

sustainable competitive advantage than acquiring new ones.

9. On the supply side it pays more to develop closer relationships with a few suppliers than to

develop more vendors.

10. The globalization of world marketplace makes it necessary to have global account

management for the customers.



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OBJECTIVE OF THE STUDY OF CRM

CRM, in its broadest sense, means managing all interactions and business with

customers. This includes, but is not limited to, improving customer service. A good CRM

program will allow a business to acquire customers, service the customer, increase the value

of the customer to the company, retain good customers, and determine which customers can

be retained or given a higher level of service. A good CRM program can improve customer

service by facilitating communication in several ways:

Provide product information, product use information, and technical assistance on

web sites that are accessible 24 hours a day, 7 days a week

Identify how each individual customer defines quality, and then design a service

strategy for each customer based on these individual requirements and expectations.

Provide a fast mechanism for managing and scheduling follow-up sales calls to assess

post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and

repurchase frequencies.

Provide a mechanism to track all points of contact between a customer and the

company, and do it in an integrated way so that all sources and types of contact are

included, and all users of the system see the same view of the customer (reduces

confusion).

Help to identify potential problems quickly, before customer occur

Provide a user-friendly mechanism for registering customer complaints (complaints

that are not registered with the company cannot be resolved, and are a major source of

customer dissatisfaction).

Provide a fast mechanism for handling problems and complaints (complaints that are

resolved quickly can increase customer satisfaction).



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Provide a fast mechanism for correcting service deficiencies (correct the problem

before other customers experience the same dissatisfaction).

Use internet cookies to track customer interests and personalize product offerings

accordingly

Use the Internet to engage in collaborative customization or real-time customization

Provide a fast mechanism for managing and scheduling maintenance, repair, and

ongoing support (improve efficiency and effectiveness)

The CRM program can be integrated into other cross-functional systems and thereby

provide accounting and production information to customers when they want it.

Keeping Existing Customers

Grading customers from very satisfied to very disappointed should help the organization

in improving its customer satisfaction levels and scores. As the satisfaction level for each

customer improves, so shall the customer retention with the organization.

Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event

trigger points by customer, marketers can maximize share of purchase potential. Thus the

single adults shall require a new car stereo and as he grows into a married couple his needs

grow into appliances.

Increase Loyalty

Loyal customers are more profitable. Any company will like its mindshare status to

improve from being a suspect to being an advocate. Company has to invest in terms of its

product and service offerings to its customers. It has to innovate and meet the very needs of

its customers so that they remain as advocates on the loyalty curve. Referral sales invariably

are low cost high margin sales.



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RESEARCH METHODOLOGY

Meeting and satisfying each customer’s need uniquely and individually. In the mass

markets individualized information on customers is now possible at low costs due to the rapid

development in the information technology and due to availability of scalable data

warehouses and data mining products. By using online information and databases on

individual customer interactions, marketers aim to fulfill the unique needs of each mass-

market customer. Information on individual customers is utilized to develop frequency

marketing, interactive marketing, and after marketing programs in order to develop

relationship with high-yielding customers. In the context of business-to-business markets,

individual marketing has been in place

of quite sometime. Known as Key Account Management Program, here marketers appoint

customer teams to husband the company resources according to individual customer needs.

Continuity Marketing Programs

Take the shape of membership and loyalty card programs where customers are often

rewarded for their member and loyalty relationships with the marketers. The basic premise of

continuity marketing programs is to retain customers and increase loyalty through long-term

special services that has a potential to increase mutual value through learning about each

other.

Partnering Programs

The third type of CRM programs is partnering relationships between customer and

marketers to serve end user needs. In the mass markets, two types of partnering programs are

most common: Co-branding and affinity partnering. Missing process of CRM Traditionally

customer relationship management (CRM) revolves around the three functions of selling,

marketing and support. Various process models have been built around how these functions



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are integrated and operated in a customer oriented enterprise. There is however a fourth

critical function that is lacking in most CRM models.

The fourth function that often is the source of a competitive edge is that of innovation.

Companies must continually reinvent themselves to deliver an improved and often a totally

new value offering to their customer base. CRM must provide the customer intelligence that

feeds information back into the enterprise’s knowledge management processes where it can

trigger new innovation processes. When CRM is integrated into the innovation process,

significant value can be derived from faster time to market cycle times and with new

processes and services. Marketing automation must ensure that the innovation processes are

actually market driven. A market driven innovation process must include both strategies that

are focused on satisfying customer requirements as well as strategies focused at redefining

customer requirements. Sales automation should be integrated with the innovation process by

ensuring that all sales channels are prepared and ready to take new processes and services to

market before competitive forces can react. Customer service automation must be designed to

empower the customer with the option of assisting with the design of the value offering.

Redefining CRM around innovation, sales, marketing and service can identify new

competitive opportunities for an enterprise. The remaining question is whether companies are

prepared to take the initiative and expand the definition of customer relationship management

to include the process of innovation. The pressure to deliver results within the traditional

definition of CRM already overwhelms companies. The dialog must start rather earlier than

later because the competitive window of traditional CRM is decreasing and customer

demands for a more innovative and responsive enterprise will increase



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ARCHITECTURE OF CRM

There are three parts of application architecture of CRM:

1. Operational - automation to the basic business processes (marketing, sales, service)

2. Analytical - support to analyze customer behavior, implements business intelligence

alike technology

3. Collaborative - ensures the contact with customers (phone, email, fax, web, SMS,

post, in person)

1. Operational CRM

Operational CRM means supporting the "front office" business processes, which

include customer contact (sales, marketing and service). Tasks resulting from these processes

are forwarded to resources responsible for them, as well as the information necessary for

carrying out the tasks and interfaces to back-end applications are being provided and

activities with customers are being documented for further reference. Operational CRM

provides the following benefits:

Delivers personalized and efficient marketing, sales, and service through multi-

channel collaboration

Enables a 360-degree view of your customer while you are interacting with them

Sales people and service engineers can access complete history of all customer

interaction with your company, regardless of the touch point.

2. Analytical CRM



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In analytical CRM, data gathered within operational CRM and/or other sources are

analyzed to segment customers or to identify potential to enhance client relationship.

Customer analysis typically can lead to targeted campaigns to increase share of customer's

wallet. Examples of Campaigns directed towards customers are:

Acquisition: Cross-sell, up-sell

Retention: Retaining customers who leave due to maturity or attrition.

Information: Providing timely and regular information to customers.

Modification: Altering details of the transactional nature of the customers'

relationship.

Analysis typically covers but is not limited to:

Decision support: Dashboards, reporting, metrics, performance etc.

Predictive modeling of customer attributes

Strategy and Research Analysis of Customer data may relate to one or more of the

following analyses:

Contact channel optimization

Contact Optimization

Customer Acquisition / Reactivation / Retention

Customer Segmentation

Customer Satisfaction Measurement / Increase

Sales Coverage Optimization

Fraud Detection and analysis

Financial Forecasts

Pricing Optimization

Product Development



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Program Evaluation

Risk Assessment and Management

Data collection and analysis is viewed as a continuing and iterative process. Ideally,

business decisions are refined over time, based on feedback from earlier analysis and

decisions. Therefore, most successful analytical CRM projects take advantage of a data

warehouse to provide suitable data. Business Intelligence is a related discipline offering some

more functionality as separate application software.

3. Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels

(personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and

channels. It is a solution that brings people, processes and data together so companies can

better serve and retain their customers. The data/activities can be structured, unstructured,

conversational and/or transactional in nature.

Collaborative CRM provides the following benefits:

Enable efficient productive customer interactions across all communications channels

Enables web collaboration to reduce customer service costs

Integrates call centers enabling multi-channel personal customer interaction

Integrates view of the customer while interaction at the transaction level



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BENEFITS OF CRM

1. Better service to customers:

With CRM the company can provide better service to its regular and valuable

customers. It is said that 20% of the customer account for 80% of the sales. Therefore

it is worth targeting the important customer and then to provide them sophisticated

service as compared to other customers.

2. Customize market offering :

Companies can customize a product or service depending upon the data available with

the firm. The firm can facilitate customer company interaction through the company

contact centre and web site. Such interaction helps to develop customized products.

3. Customer retention :

CRM emphasizes on training and development of employees to become more

customer oriented. Due to CRM training and development employees show care and

concern towards the valuable customers. Therefore the customer defection rate may

be very less.

4. Increase long term relationships:

Some firms treat their customers as partners specially in the case of B2B markets.

Firms solicit the help of customers to design new products or to improve their service.

If the customer gets involved with the firm he is more likely to remain with the firm.



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5. Increase customer equity:

The main aim of CRM is to produce high customer equity. Customer equity is the

sum of lifetime values of all cutomers. Firms focus the marketing efforts more on the

most valuable customers (MVCs). More focus on MVCs enable a firm to increase

customer equity.

6. Competitive advantage:

Firms that adopt CRM get competitive advantage in the market. They can face the

competition with much ease. Competitive advantage helps to generate higher returns

on investment.

7. Corporate image :

The image of the firm also gets enhanced. Loyal customers become evangelists. The

evangelists spread a good word about the company and its products. This enables a

firm to get additional customers to its fold.

8. Higher return on investment:

Due to CRM the company is in position to generate higher return on investment. This

is because of repeat purchase on the part of loyal customers. Also the company makes

money through cross selling(selling many products rather than single product )and up

selling (selling higher value products). The higher return on investment increases

shareholders value.



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CRM PLANNING

CRM Planning: Keys for Project Success

Whether you're updating, upgrading, jump-starting, or restarting your CRM efforts, some

basic steps will help keep you on the path to a positive ROI.

Thinking about the potential ROI of your customer relationship management (CRM) project

should start during the selection process. Before you write an RFP or start talking to vendors,

you need to do some homework to ensure that you're on the right track to maximize ROI.

Identify the Problem — and the Solution

Before you start thinking about vendors, you should define your problem in clear business

terms. Do you need to improve management visibility into the sales pipeline? Reduce

customer support costs or improve customer support? Reduce customer-related

administrative overhead? Making your CRM challenges specific will help you determine

which technologies or components are most likely to deliver ROI and how you can prioritize

your development and deployment plans. Most companies' CRM goals fall into a couple of

main categories:

• Improved sales performance

• Improved management visibility

• Improved customer support

• Improved marketing

• Reduced costs

If your CRM goals fall into more than two of these categories, you'll likely want to prioritize

one over the other and plan a phased deployment. It's also a good idea to know at this point

what your likely budget is, how flexible it is, and what your procurement officer or CFO will

be looking for in terms of business justification. If you know walking into the project that

you'll need to show a six-month payback period, for example, you can plan accordingly.



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Make the Short List

Regardless of your relationship with existing vendors, previous experience, and technology

environment, you should make a short list of potential vendors and give them a fair

evaluation before you make a decision. Your short list should be easy to define based on

these factors:

• Your CRM goals. The vendors whose functionality meets your needs will depend on

whether you're looking for improved sales, improved reporting and forecasting, improved

support, improved marketing, or a combination of different customer-related technology.

• Your existing environment and IT philosophy. Do you have existing databases, order

systems, or contact lists that will need to be integrated or migrated into your CRM solution?

Do you expect to do your own development or use consultants or systems integrators? Are

you comfortable outsourcing your sales and marketing data in its entirety - or in part?

Answering these questions will help you determine whether a large-scale CRM infrastructure,

a hosted solution, a point solution, or a broad solution is likely to deliver maximized ROI.

• Your user dynamics. Are the employees you expect to use the solution technology

savvy and open to change, or are they the ones still using pencils and paper to track leads?

The greater the magnitude of the change you expect them to make, the greater the risk that

adoption will slow the ROI of your project.

• Your budget. CRM solutions such as Siebel and SAP can cost millions of dollars to

deploy and require a team for ongoing support and maintenance. On the other end of the

spectrum, Microsoft CRM and Front Range (for example) can cost considerably less. You

can expect a hosted solution to have a minimal upfront investment and from $500 to $1,500

per user per year.



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Clearly defining your requirements and characteristics in each of these key areas will prepare

you for the next step - evaluating each individual solution's ability to deliver returns based on

the costs and benefits associated with a deployment.

Check Resumes

Once you've identified the likely vendors to deliver the best solution for you, you'll want to

check their references - and this doesn't mean just reading case studies on their Web sites.

Look to independently developed case studies and your own interviews with references to

learn about their decision process, project successes and challenges, and whether or not their

spending - and benefits - met expectations.

Find a Partner (Check Resumes, 2)

In the CRM world, few companies will deploy a solution without some help from external

consultants or systems integrators. Selecting and planning how you work with consultants is

just as important to your project's success as the technology you choose.

Justify Your Investment

Once you've identified your goals and selected a short list of vendors, you can use a

structured evaluation of costs and benefits to determine the best solution in terms of ROI and

build the business case for moving forward. On the costs side, you'll want to consider the

initial and ongoing software, hardware, consulting, internal personnel, and training costs

associated with the project.

Key Decision Factors

By and large, there's no such thing as a bad CRM solution. Most solutions deliver value when

they're chosen based on clear business needs and deployed correctly. Once you've identified

your CRM needs and your short list, there are a number of factors to consider to help you

make the right solution decision.



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CRM SUCCESS

Seeing CRM initiatives take hold and begin to pay off is often a waiting game. It’s not a

“flip-the- switch” product that automatically spits out results or something that will take

affect overnight and cause profits to skyrocket while you sleep. The puzzle must be

completed and time must play its part before true success will be seen. However, through

dedicated and smart planning, businesses should see markedly increased profits, as satisfied

customers will continually re-visit them. Gradually, as businesses get to know their

customers, their customers get to know them, and a closely aligned partnership is formed.

This one-to-one relationship is the catalyst that sparks both lifetime customer loyalty and

revenue increase.



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In the true spirit of thinking outside of the box, experts at the Gartner Group believe “the

most successful organizations will be those who, through innovation and focus on business

effectiveness rather than merely efficiency, manage to break the mold of traditional business

thinking”. Being effective is paramount. The end goal of better serving customers and

enabling a high percentage of customer retention cannot be met with out creative thinking

and effective planning and actions. The task of perfecting the relationship between business

and customer is always on going and requires special dedication and innovation as the

commerce markets continually change and fluctuate. And over time, customers change, as

does their behavior and needs, and business must be able to respond to that.

Being on the cusp of the industry and always having a hand on the pulse of the customer is

key for success. As the CRM initiative begins to take hold, key players will soon see patterns

emerge among customers, will discover what a productive strategy is and what is not. This is

the essence of a successful CRM project: being able to really know what will work for your

customers, what satisfies them, and what keeps them loyal. The ability to get an accurate gut

feeling about the marketing campaigns, new products, and the type of policies customers will

respond to is invaluable. This kind of customer knowledge only comes from really digging in

and being savvy about how you go about understanding the people that you hope will

continually call on the services and products of your business. The ROI in this case would be

compelling indeed.

Advice for Breeding CRM Success:

1. Buy the best package you can afford. Choosing a high-end system that allows for growth

is key, Monster.com's Liddell says. Monster.com has rolled out Siebel Systems' sales force

automation software to 800 users since implementing the software in November 1998.



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Where low-end packages break down is in their ability to handle complex definitions of

customers, he says. Monster.com established formal guidelines for defining customers across

divisions and applications so salespeople can access clean, consistent data.

2. Choose wisely. Figure out who you need to reach and then find the software that will help

you accomplish that. Before settling on RightNow, USF scrapped a previous CRM project a

month into the implementation after concluding the software didn't work the way the

university wanted. Too often companies choose software before they have defined the

problem, Akin says.

"I've seen it lots of times - 'Hey, this is a neat application. Let's buy it and then figure out how

we can use it here.'"

USF tapped Right Now Technologies' e-mail management software to help the IT

department, financial aid office and other administrative groups that were bogged down with

customer service inquiries from 40,000 students and staff.

3. Build and maintain a relationship with quality consultants . Consultants are important

not only in an initial deployment, but also as project parameters change - which they will,

Liddell says. Monster.com works with CRM consultant Akibia, which lets the company

quickly expand its CRM resources when necessary. Each time Monster.com acquires a new

company, Liddell's priority is to quickly get those new team members up and running with

Siebel sales tools - a process that sometimes requires extra hands.



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4. Rely on internal resources. Consultants are helpful, but it's important to maintain

ownership of a CRM project. "Nobody's more interested in our success than the team at

Monster.com," Liddell says. Plus, somebody has to run the software once the consultants are

gone.

5. Make sure everyone is onboard. It's important to have buy-in throughout the

organization, Akin says. Financial support is necessary, he says, "but more important is an

agreement to use the product universally." It's frustrating for end users if they expect to find a

single source of customer service information online and it turns out a key department is

missing from the site.

6. Align your project goals and implementation schedule. Berkson and his team at

Thomson Financial try to stick to eight- to 12-week projects, rather than rolling out

everything to everyone at once. Plus, no department is going to need every function in every

application; users would be overwhelmed, Berkson says.

Thomson Financial is in the process of upgrading its Vantive applications to PeopleSoft 8

CRM - the new Internet-based suite from PeopleSoft, which acquired Vantive in 1999.

"We tend to implement in small, manageable phases," he says. Companies should identify

their biggest pain points and greatest opportunities for return on investment, and make those

an implementation priority.

7. Start with a low-risk pilot. One project up and running quickly can validate your CRM

concepts, Berkson says. Choosing a relatively simple, straightforward project - such as

outfitting a department that doesn't require integration with other back-end systems - is

important. If you start with a complex trial, it can really drain momentum, he says.



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8. Aim for configuration, not customization. Take advantage of today's CRM tool sets,

Berkson says. Vendors have built more robust configuration flexibility into CRM

applications and recommend that users minimize customizations. So if you can break the

habit of writing custom code to accommodate unique business processes, it will be well

worth the effort when it comes time to upgrade, Berkson says.

9. Don't underestimate data requirements. The time and resources needed for data

conversion and cleanup will always be more than you think, Berkson says.

10. Provide adequate training. "If you have the time and the resources, train in advance of

rollout," Akin says. The university departments that are least enthusiastic about the

RightNow products are the ones that weren't ready for it, he says.

11. Set communications standards. In hindsight, Akin wishes his group had set content

standards among departments before going live with the project instead of trying to do it

later. At USF, e-mail inquiries are routed to as many as 30 different departments. Setting

standards for formatting responses can help maintain consistency of service.

12. Watch the details. CRM requires a team that is willing to take ownership of even the

most minute details. Monster.com has team members who maintain the software, team

members who constantly handle requests for changes and team members who police data

quality.



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CRM PRODUCTS

What Are Some CRM Products and What Can They Do For You?

CRM products are automated applications that support the accomplishment of corporate

goals related to customers, such as increased revenue and/or increased sales efficiency (i.e.,

better results with lower expenditures from sales, customer service, and marketing.) These

technologies capture customer data from across the enterprise, then analyze, consolidate

and/or distribute it for use across the multiple customer facing departments (or processes)

within the company.

CRM products can be grouped into 5 general categories:

Customer/Partner Self-Service Systems: enable your customers, suppliers, and/or partners

to use the internet to gain information that is directly relevant to them. This may include

customized product elections, order status update, on-line order entry, or self-guided query

and response. Examples of these systems include email response management systems, web

personalization systems, web-based order-entry, and web self-help.



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Sales Force Automation Systems: provide tools for your sales people to maintain their

contacts, track sales prospects, provide sales forecasts, enter and track orders, and provide

customized quotes for clients. Examples of these systems include, and on-line sales

forecasting and order-tracking.

Call Center Customer Service Systems: provide support for staff that answer client

questions or respond to requests for dispatch services. Examples of these systems include

web-based customer service, customer service call tracking, improved customer service

representative (CSR) access to client information, and automated dispatch and tracking.

Operational Billing/Order System Integration Systems: provide integration (as well as

migration) between customer-facing (front-end) applications and the production (back-end)

order-status and financial systems that contain the data that clients and partners may seek.

These systems are not only CRM systems, but rather the components of larger software suites

that may include CRM. Examples of these systems are packaged accounting and

manufacturing systems that have CRM front-ends.

Technology-Enabled Lead Generation Systems: enable targeted marketing based on client

needs and/or past business trends. This lead generation could be dynamic (emailing offers or

customizing web content) or static (providing targeted databases of clients by type). These

systems include customer data mining, automated marketing campaigns, and customer

personalization tools.



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REASONS FOR CRM FAILURE

The Top 10 Reasons CRM Projects Fail

Depending on which survey you read, you will see comments and statistics such as “over

50% of CRM (Customer Relationship Management) projects fail.” On the other hand, you

will also see published results that show double-digit percentage growth in revenue,

improved productivity, and increased customer satisfaction from new CRM projects. What

drives companies to have such different results from the same initiatives? Before we look at

reasons, let’s define the scope of CRM. CRM has been one of the most confusing terms

established in eBusiness. In many cases, it has been defined, as what the user of the term is

promoting. In the context of this article, we want to look at CRM as the following.

CRM is a strategic approach that combines the business processes, technology, employees,

and information across an enterprise to attract and retain profitable customers. CRM projects

are launched to realize the plans and achieve the objectives defined in the CRM strategic

plan. Let’s look at why many CRM projects fail and many others achieve great success. Here

is CGI’s top-ten list of reasons CRM projects fail.

1. CRM initiatives launched without a strategy.

Simply stating “We’re going to do CRM this year” is not a strategy. A CRM strategy needs to

clearly define how you will be viewed by and manage all touch points with your customers. It

should also define how you plan achieve this result.

2. The CRM strategy is not integral to the business strategy.



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CRM cannot be viewed as a project or solution separate from your overall business plan.

How you develop and grow customer relationships is the lifeblood of your company.

Customers must be a core part of your overall business strategy.

3. The CRM toolset is based on someone else’s success.

There are many CRM tool offerings in the market place. Typically, these started around a

particular process and product offering that was very effective. This offering has since been

expanded to offer broader functions through acquisition or system development. Be sure to

evaluate tools against your business requirements to get the best product for your highest

priority needs. Not everyone serves customers the same way, has the same business

processes, or has the same priorities as your business.

4. CRM is launched with no regard for enterprise or customer interfaces.

Can you afford to invest in making one part of the customer experience excellent only to

destroy it at another step in the lifecycle? Make sure every touch point you have with the

customer provides consistent, knowledgeable, and high-quality service.

5. CRM is launched without customer input.

It is so easy to get caught up in the rush to implement CRM solutions that you forget those

people on the outside of your business. Talk with your customers. Find out how they want to

be serviced. How can you better meet their needs? How can you collaborate for a true

win/win initiative? What are other suppliers doing for them that they like?

6. CRM is considered an IT project – not business initiatives leveraging technology.



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Customers interact with your company through people, processes, electronic media,

transactions and indirect relationships. They typically will not know what language your tools

are written in or what platform they run on. The capability, quality, function and reliability of

the systems are critical. But design them to support the best customer processes you can

provide. The greatest success will come from the coordinated efforts of business users and

technologists in the company.

7. CRM is launched without defined metrics and objectives.

An important part of any rollout of new processes is the expectation of improvement. If you

don’t expect performance to improve, don’t measure it, or manage it. Consequently, you

won’t see improvement. Even if you achieve it. Set expectations. Measure performance

improvement. Provide feedback. Reinforce successes. Look for ways to continue the

improving trends.

8. CRM is considered a one-time event.

Once your initiative is launched, you’re just getting started. Look at it as an evolutionary

development of your organization that will require multiple iterations to implement. You will

have some employees who resist the change. There will be bumps in the road. Solicit

feedback. Learn from the new data at your disposal. Refine your strategy. Set new goals.

Develop plans to achieve these new goals.



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9. Assume you have a customer-centric culture because you have customers.

The global economy has broken down consumer barriers, reducing geographic constraints

and revealing little difference between the products and prices of one competitor to the next.

As a result, quality and service have become driving forces behind brand preference, loyalty

and bottom line results. Be sure to look at your company as your customers do. Consider how

they want to do business with you. Develop your strategy, design processes, and make

decisions looking from the outside in. Measure, analyze and track customer service

performance. Solicit input and feedback from your customers. Benchmark with other

organizations. Drive this “customer first” culture throughout the organization. Reinforce it

with every employee.

10. No top down leadership and employee buy-in for CRM.

Every employee will be affected by fundamental changes in CRM. Appoint an executive

sponsor. Communicate vertically and horizontally through the organization. Get employees

on board. Get them excited about doing a better job for your customers and making your

company more successful. Create momentum toward a competitive customer focus. Provide

training so employees know their role and the rationale for change.

11. Altering the CRM solution to accommodate current business process and behavior.

Benefits will accrue from the adoption of new processes that leverage the information, speed,

integration, lower operating costs and improved service resulting from new CRM tools. Be

sure to take advantage of these revenue, service and productivity enhancements.



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12. CRM is regarded without urgency.

Your customer’s expectations are increasing. Maybe not from your direct competitors but

from other service providers. Will your competitors announce a quantum leap tomorrow? If

they do, what will it take to get customers back after you have lost them? How much is it

worth to pre-empt your competitors and lock in new customers?

13. Try to implement ―everything CRM‖ at one time.

What about the sense of urgency you ask? It is difficult to change the entire organization

overnight and keep it running. Organizations have personalities and need to learn new and

adaptive behaviors. Go after your highest leverage, or highest priority areas first. Show

successes to bring the rest of the organization along. Move forward in manageable steps.



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CONCLUSION

In the past, CRM was mostly about the technology, not about the customer. There is a change

in the way the organizations do business. At a technology level, CRM is increasingly about

conjoined best-of-breed applications delivered via portal technologies. At a business level, it

is beginning to invade traditional territories occupied by brand management or customer

support.

CRM is a strategic approach that combines the business processes technology employees and

information across an enterprise to attract and retain profitable customers, as a result I think

that it will be a good indicator of confidence in business in general and technology in

particular.



Bibliography

Newspapers

o Times Of India

o Financial Express

o Economic Times

Websites

o www.salesforce.com

o www.customerservicemanager.com

o www.crmassist.com

o www.google.co.in

o www.yahoo.com

Reference Books

o MARKETING STRATEGIES &PLANS: Michael vaz, Madhu nair.

o Why CRM Doesn’t Work?

Doc 2 Project

Documents

Transcript of Doc 2 Project