Getting the best out of your CRM

By Lisa Witepski
(The following article appeared in the June 2007 edition of The Journal of Marketing)  

Best practices drive results
Ready for a tough discovery? Forget blaming your CRM system for initiatives that don’t go the way they’re planned. The truth is that most ‘CRM failures’ are, in fact, self-inflicted injuries.
 

When it comes to CRM, there is – unfortunately – no such thing as a short cut. You will not save time or money by dancing around corners; indeed, implementation short-cuts and avoidance of fundamental truths only lead to dead-ins and result in failed implementation, lost investment and the negative baggage that has sadly tarnished CRM’s reputation.

Statistical findings
Our learnings in this area were gleaned through a study with over 600 respondents across a representative range of company sizes and market sectors sharing their implementation methods – and with 448 reporting at least partial return on investment (ROI) outcomes – the key findings are safely beyond reasonable margins of statistical error. The findings that follow accurately and objectively represent the experiences of CRM implementers worldwide.
 

The presence of customer-centric strategies is the leading predictor of CRM success, and by a substantial margin. With customer-friendly business strategies in place, CRM as a whole has a reason for being. It has guiding principles to shape it.
 

CRM strategies are more likely to succeed when they include development of customer-centric strategies than with accomplishment of any other implementation step. But this isn’t ‘new news’ to many, because without customer-centric strategies, there’s no basis (other than cost-cutting) for the workflow changes, shifts in roles and responsibilities, and work process changes that should follow customer-centric planning during CRM implementation.
 

However, new or not, this can be hard news to accept. Fundamentally, many companies attempting to implement CRM do not want to become customer-centric. And this creates a problem, because customers attempting CRM in the absence of customer-centric strategies routinely fail.
 

A finding of note is that within the framework of developing and implementing customer-centric strategies, the presence of customer attrition data and customer satisfaction research finished one-two in importance. That’s strong support for the primacy of customer retention together with customer development as sources of positive CRM outcomes, rather than often assumed primary sources such as new customer acquisition and expense reduction.
 

Line-level training and support, and making organizational changes finish in a virtual tie for second place as predictors of success. While it’s become axiomatic CRM talk that management cannot mandate line-level participation in practising CRM and using CRM tools, especially not among field sales people, it’s become routine in CRM implementation for management to attempt exactly that. Unfortunately for managers predisposed in this way, investing in people at points of customer contact produces far better outcomes than shifting ‘people investment’ over to software investment.
 

Similarly, the need for organizational change as a part of CRM implementation is rarely doubted – until implementation time comes, at which point many CRM implementers opt for ‘not rocking the boat’ instead of accepting the need for change. Unfortunately, changing departmental roles and responsibilities is at least a partial ticket to success, whereas ‘playing it safe’ by standing pat organizationally heightens the risk of failure.
 

Setting measurable goals rounds out the four primary predictors of success. Setting measurable goals sounds easy, but CRM implementers need baseline data to measure against as well as the discipline that measurement provides. Most companies need to invest substantially in customer research in order to set these benchmarks. Ironically, in the relatively few instances where research is considered part of the core CRM implementation, budgets for research are often the first cut. But the data indicate that’s a costly cut, and an unwise one.

What about technology?
No other factors – including software selection methodology and vendor selection – are statically significant predictors of positive outcomes.
 

This finding does not mean that all CRM systems are functionally equivalent and can be used interchangeably. Each system has its own set of features and capabilities that make it more or less appropriate for the need of each company.
 

What the data show is that in the absence of the key drivers of success, any implementation will have difficulty achieving positive ROI, regardless of which software system is selected. But in the presence of these key drivers, success was highly likely – regardless of the software system that was used.
 

It’s likely that most implementers that were accomplishing the key drivers knew which software system best suited their needs, and chose that system. And it is possible that some of the failures that occurred, despite reasonable accomplishment of the four key drivers, might be attributable to selecting a software system not matched to company needs – a situation that’s perhaps caused by senior management (or IT) dictating a software choice more than by any other factor.