How to fix CRM

Boulevard of Broken Dreams is not only a popular song but a metaphor for the history of Customer Relationship Management programs at some firms.  Thousands of companies have consumed billions of dollars of capital and countless hours with little to show for their CRM investments.  Without a new, strategic deployment approach, senior leaders will be much more cautious about prioritizing and deploying new CRM systems. 

CRM is a widely implemented suite of technology and business processes used to manage a company’s sales, marketing and support interactions with its customers and sales prospects. Arriving on the scene about 15 years ago, CRM systems – including demand generation, sales force automation and analytics – promise much to organizations.  A myriad of potential benefits include driving tighter 1:1 customer relationships, more precise targeting of segments with tailored offers, better decision support and increased program efficiencies.  

Unfortunately, the reality did not meet the promise.  According to a MIT Sloan School study, 55% to 75% of firms fail to meet the expected return on their CRM investments.  Furthermore, research from marketing consultancy, CSO Insights, indicated that less than 40% of companies had end-user CRM adoption rates above 90% of full capabilities.  Simply put, CRM has yet to deliver the goods.

Dashed results trace to a number of factors.  For one thing, management exuberance and competitive pressures often lead to business case shortcuts and rash over-spending. Secondly, implementation and integration challenges within complex IT infrastructures can push out ROI and reduce available capabilities.  Thirdly, organizational dynamics – a lack of a clear strategy, poor planning and insufficient training as examples – will minimize internal buy-in and adoption.  Fourthly, CRM often triggers a tsunami of customer data which can easily overload the capabilities and resources of marketing departments.  Finally, CRM will do little for products or a company with a poor value proposition or weak market differentiation.

Despite the challenges, CRM’s potential remains too compelling to ignore.  There is now a wealth of learning from successful companies that can help reduce design, implementation, and integration risk.  With the aid of research published in MIT’s Sloan Management Review, I have put together some best practices to assist gun-shy managers get the most out of their existing and proposed CRM investments:

Align CRM to your Business Strategy

CRM has the ability to positively (and negatively) transform an organization’s relationship with its clients.  As such, firms must take care to ensure that CRM strategies and investments are not inconsistent with their brand positioning, value proposition and business model. In order to minimize customer and cost risk, managers need to undertake a thorough analysis up-front in order to design the optimal strategy and program.

Start small but don’t under-invest

Although CRM is a mature technology, its implementation will still benefit from a measured deployment that can build early momentum & support, garner learnings in flight and measure ROI at key milestones. At the same time, firms must be careful not to be ‘penny wise and pound foolish’ by starving young CRM initiatives of the needed skills & resources, technology spend and internal priority.

Ensure marketing is up to the task

To maximize returns, managers must ensure that marketing and IT has robust capabilities as well as fundamental consumer knowledge before making any investments.   If important analytics, demand generation and marketing communications capabilities are not in place at the outset, CRM will never realize its promise. 

Don’t neglect the human dimension

Maximizing internal alignment and participation is vital to the success of CRM.  Delivering this requires proven change management tools as well as providing adequate training and support resources.  Moreover, companies must safeguard retention and their brand image by making sure their customers will not resent CRM-driven sales & marketing programs aimed at them.

For more information on our services and work, pleas visit the Quanta Consulting Inc. web site


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