Magazine article Marketing

EFFECTIVE CUSTOMER MANAGEMENT: Phase One: Pre-Project - Planning Is Essential to Success of CRM

Magazine article Marketing

EFFECTIVE CUSTOMER MANAGEMENT: Phase One: Pre-Project - Planning Is Essential to Success of CRM

Article excerpt

Up to 70% of CRM fails to live up to expectations. So is it worth the cost and the trouble? Yes, if you get the planning right, says Stuart Lauchlan.

It's not difficult to find examples of customer relationship marketing projects that failed. UK research firm Butler Group suggests that as many as 70%of CRM implementations fail, while Gartner Group is only slightly less pessimistic when it claims that 55% of all CRM projects fail to meet customers' expectations.

It's not a pretty picture and goes a long way to explaining why there is an overriding impression that CRM is complicated, costly and possibly not worth the trouble. So who, or what, is to blame? One of the immediately obvious problems is that CRM rose to prominence during the dotcom boom of the late-90s when the answer to any technology problem was to throw more money at it. Typically, that meant buying more licences for yet more package solutions from various applications software vendors, deploying them and thinking this meant that your organisation now 'did CRM'. The market has moved on from such thinking, and there is an increased awareness that implementing effective CRM involves a lot more than buying an off-the-shelf package. Unless there is considerable planning and thought at an early stage, the objectives will be unclear and elusive. There are important factors to take into account before any software is bought, let alone deployed.

'There is a risk to any CRM project,' says Ashim Pal, international vice-president at analyst firm Meta Group. 'You are dealing with both cultural and technical changes, so it's going to be risky if it's undertaken the wrong way. There are chief information officers who say that a CRM project is the worst one they've ever had to do. That's partly because they understand about the technology, but not about the return on investment and the cultural issues.'

Beyond the package

Jim Parish, strategic relationship manager at collaborative software firm Centra, says: 'In any customer management scenario, companies should remember the importance of preparation by outlining the four Cs. First is content, which means finding the right information. But if you're working collaboratively, you have more opportunity to find the content that you want to use and amend it accordingly.

'So the second C is collaboration. The third C is community, since sharing experience from peers is important in any business context. Getting the intellectual input from others is a fundamental part of the collaboration exercise. The fourth C is consultancy.'

Perhaps the most important of the four Cs is content. Too often, firms race to clamber on to the CRM bandwagon by rolling out packaged applications without thinking first about the availability, accessibility and quality of the data in the organisation. In a typical organisation, customer data is scattered across multiple systems such as spreadsheets or databases (or in the salesforce's heads) and often in incompatible formats. And without the data, it doesn't matter how good the applications themselves are.

Robert Fleming, senior director of enterprise applications marketing at database giant Oracle, says: 'Content is a huge critical success factor, particularly from the data side. This is true not just of finding the right data but also of finding the right quality of data and consolidating it into one view.'

Companies need to think beyond the packaged offering. 'CRM generates volumes of digitised information and content,' says Kathy Harris, business applications sector chief at research firm Gartner Group. 'With proper knowledge management you can intelligently manage this information glut.

CRM's effectiveness and efficiency can be increased when enterprises optimise their management of critical knowledge.

'Optimisation involves two steps. First, the enterprise begins to view knowledge as a strategic asset. …

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