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Taking the Pledge for CRM Success, Part I

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Posted October 31, 2001 By Arthur O'Connor     Feedback

If you're serious about implementing a CRM strategy, you'll have to take Arthur O'Connor's three-point pledge. This article discusses the first point: understanding the risks and rewards of CRM technology adoption.

Photo Arthur O'ConnorThis is an open letter to all you corporate executives out there who are grappling with the hoary task of designing and implementing CRM in your organization.

Despite all of what you've heard and read about in surveys, research reports, and whatnot about the high failure rate of CRM implementations and the low rate of customer satisfaction with the most popular CRM packages, I have the solution: the three-point pledge.

Before you take this three-point pledge, however, you've got to qualify:

  • Are you really willing to make the changes necessary to increase CRM success?
  • Are you committed to learning more about your customers and are you willing to do what it takes to identify, attract and retain the right types of customers?
  • Are you really serious about improving the operational performance of your organization?

If the answers are a resounding, "Yes" to all three questions, then stand up, place your hand over your heart, and repeat the following:

Promise #1: Don't adopt new technology without a clear understanding of how it can generate economic benefit, given its potential risks and rewards and your organization's design, strengths and weaknesses.

"I promise not to adopt new technology without a clear, viable strategy to use the resulting functionality to either improve revenue and profits, and/or reduce costs to a degree which substantially exceeds the total amount of investment required to make the technology work in my organization. By viable, I mean that this strategy will be grounded in a deep and real knowledge of customer needs, interests and behaviors; the core competencies of my staff; the competitive strength of my offerings; the cohesiveness of my corporate culture and organization, and architecture of my technical infrastructure."

Does this seem silly to you? Well, it represents a major mind shift to most of your counterparts out there in corporate America. Many organizations seem to buy software packages as the magic bullet to their problems, believing that, once installed, the software will mysteriously make their people, their business processes, and their collective organization so much smarter and better.

Think I'm kidding? Just consider all those organizations that bought CRM packages and painfully and meticulously reconciled, cleansed and integrated customer data, and recreated all of it in a brand new data model — just so these businesses could achieve an integration of customers across different customer-facing processes and channels.

And what did many of these same companies do to recoup their costs of such a massive investment? Did they create self-service Web sites so customers could view and manage their accounts, in order to lower servicing and handling costs? Did they provide value-added analysis at the request of customers to offer them superior value and better deals in generate added revenue?

No, many did not. They simply spent a lot of time and money, only to achieve a better internal view of customers. While an integrated view of customers gives companies the potential to offer better service and/or deliver superior value, an integrated view doesn't really generate any economic benefit by itself.

Stay tuned for my next two installments where we'll cover pledge points two and three.

Do you agree with me so far? Don't agree? Got an interesting insight, opinion or real-world example to share? What are your thoughts? Please write me at Arthur.oconnor@reuters.com.

Arthur O'Connor is one of the nation's leading experts on customer relationship management (CRM) and customer-facing IT systems and strategies. He's currently the national columnist for eCRMGuide.com and this year serves as the chairperson of the Institute for International Research's CRM Conference. Arthur has over 20 years leadership and management experience in the area of customer management, strategy and new business development, including 15 years as a senior corporate officer of two NYSE-listed inter national corporations, and over five years experience as an independent management consultant and Big 5 firm practice manager selling and managing large-scale IT engagements.

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