1. What is CRM?

Customer Relationship Management (CRM) refers to the methodologies and tools that help businesses manage customer relationships in an organized way. Customer relationship management tools include software and browser-based applications that collect and organize information about customers. For instance, as part of their CRM strategy, a business might use a database of customer information to help construct a customer satisfaction survey, or decide which new product their customers might be interested in. It is a widely implemented model for managing a companys interactions with customers, clients, and sales prospects. 2. What are the benefits of CRM? 1) Shared or distributed data: CRM helps understand the need for sharing all available data throughout the organization. A CRM system is an enabler for making informed decisions and follow-up on all the different levels. 2) Cost reduction: CRM makes the customer a partner in the business. As customers are doing their own order entry, and are empowered to find the info they need, less order entry and customer support staff is needed. 3) Better Customer Service: The customer service department have all the information they need at their fingertips. They can lead the customer towards the information they need. Thus better customer service is ensured. 4) Increased Customer Satisfaction: The customer feels that customer service is better, their needs are anticipated. They also feel more empowered. These make customer more satisfied. 5) Better Customer Retention: If a CRM system can help to enchant customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention. 6) Loyal customers: The customer feels that they have all information need to make buy decision. This empowerment makes them loyal. 7) More repeat business: The repeat business is coming from the delighted customers, who are turned from doubting clients into loyal advocates. 8) More Profit: CRM ensures cost reduction that is equal to more profit. 3. What are the reasons for failure of CRM?

A Customer Relationship Management system may be chosen because it is thought to provide the following advantages:[citation needed]

Quality and efficiency Decrease in overall costs Decision support Enterprise ability Customer Attentions Increase profitability Improved planning Improved product development

Let's take a look at the advantages that a CRM or Customer Relationship Management system can bring. 1. Shared or distributed data As companies realize that customer relationships are happening on many levels (not just through customer service or a web presence), they start to understand the need for sharing all available data throughout the organization. A CRM system is an enabler for making informed decisions and follow-up, on all the different levels. 2. Cost reduction A strong point in Customer Relationship Management is that it is making the customer a partner in your business, not just a subject. As customers are doing their own order entry, and are empowered to find the info they need to come to a buy decision, less order entry and customer support staff is needed. 3. Better Customer Service All data concerning interactions with customers is centralized. The customer service department can greatly benefit from this, because they have all the information they need at their fingertips. No need to guess, no need to ask the customer for the n-th time. And through the use of push-technology, customer service reps can lead the customer towards the information they need. And, most of the time, the customer can do this on their own, as the CRM system (remember, the 3 P's) is more and more able to anticipate the need of the customer. The customer experience is greatly enhanced. 4. Increased Customer Satisfaction The customer feels that he is more "part of the team" instead of just a subject for sales and marketing (the proverbial number), customer service is better, his needs are anticipated. There is no doubt that customer satisfaction will go up. If the products sold exceed the customers expectation, of course, no CRM system can help you with shoddy products. In my opinion, the term statisfaction is a contaminated. Many companies think that if customers are satisfied that this is a good predictor for repeat business. However, this is not the case. Only delighted customers have a great level of loyalty.

5. Better Customer Retention If a CRM system can help to enchant customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention. 6. Loyal customers Need I say more? Q.E.D. 7. More repeat business The repeat business is coming from the delighted customers, who are turned from doubting clients into loyal advocates. 8. More new business If you are delivering the ultimate customer experience, this will seed the word-of-mouth buzz, which will spawn more new business. 9. More Profit! More business at lower cost equals more profit. 10. New sales opportunities 11. A good CRM system will classify your prospects and help identify your best customers. With detailed information on your customers you can accurately project and respond to their buying needs throughout the sales cycle. A good CRM system can help you automate routine sales tasks allowing you to spend more time focusing on strategic sales issues.

12. Improved customer service 13. The right CRM system allows your team to take a pro-active approach to customer service. With up-to-date and complete customer information at their fingertips, your employees can resolve customer issues more quickly and successfully create cross or upsell opportunities. 14. Plan, execute and audit targeted marketing campaigns 15. CRM makes it easy for you to track each phase of a marketing campaign and provides all the tools you need for meaningful analysis and powerful campaign measurement. You can profile customers and prospects based on specific criteria and this, along with direct integration to mass email and CTI functionality, makes CRM an invaluable tool for successful marketing. 16. Better decision making 17. CRM applications provide a single view of the customer across all touch points and channels, as well as delivering comprehensive reports of customer behaviours, marketing campaign results and sales activity. Each of these elements is necessary for smart decision making and long term strategic planning. 18. Greater efficiency 19. With an integrated CRM system, you can gain immediate access to your organisations critical customer information. Good CRM software also increases internal efficiencies by automating workflow processes, reducing human error, decreasing process time and providing consistency throughout the entire organisation.

A major benefit can be the development of better relations with your existing customers, which can lead to:

increased sales through better timing by anticipating needs based on historic trends identifying needs more effectively by understanding specific customer requirements cross-selling of other products by highlighting and suggesting alternatives or enhancements identifying which of your customers are profitable and which are not

This can lead to better marketing of your products or services by focusing on:

effective targeted marketing communications aimed specifically at customer needs a more personal approach and the development of new or improved products and services in order to win more business in the future

Ultimately this could lead to:

enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow increased value from your existing customers and reduced costs associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways

Once your business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base. Even with years of accumulated knowledge, there's always room for improvement. Customer needs change over time, and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information.

Counting v. Creating Customers The current crop of CRM systems are very useful for large companies with thousands of customers that want to "count" them in interesting ways. If you are like most small businesses, you probably only have tens or hundreds of customers your main problem is finding new customers and efficiently growing existing customers, not counting customers in interesting ways. Measuring the Wrong Thing CRM measures the activities of prospects after they have "self-selected" in some way by calling the your office or filling in your form somewhere. Stuctured v. Unstructured Data CRM systems are essentially databases with customer oriented forms

built on top. They are very good at capturing and organizing structured information, but are horrific at capturing and organizing unstructured information. Ease-of-Use Most CRM vendors say their product is "easy-to-use." The reality is it is easy to use if you have dedicated "operations" people or a dedicated CRM IT person to figure out how to do the hard/useful stuff. "Feeding the Monster" Like many knowledge management initiatives, CRM requires end-users to take actions that are not part of their natural work process in order to "update" the system. After all, CRM output is only as good as the input "garbage in, garbage out." Transactional Systems v. Solution/Relationship Systems Todays CRM is more useful for transactional (i.e. call center) types of companies than it is for small businesses who have client relationships that are more solution oriented in nature.
1. Distinguish between a WANT and a NEED Our last blog addressed how crucial it is for companies to critically assess their requirements and needs before beginning their research on CRM systems. This helps to truly define where the CRM comes into play and what key functionalities companies should look out for. However, many companies are quick to assume that they need a CRM solution simply because their industry peers or competitors have one. In other words, these companies dont understand the true need for the system and instead are jumping on the bandwagon for the sake of wanting to stay up to date. Being able to distinguish between your want vs. your need for a CRM is half the battle and will ensure that you adopt a system that coincides with your companys requirements and will therefore be easily picked up by your sales people. Not understanding your needs and not knowing what the CRM is purposed to do will result in the CRM failing at an alarming rate. 2. Management cant simply buy CRM; they need to buy-into it The second most common reason why CRM systems fail is because there is a lack of buy-in, especially from management. CRM needs to become part of the company culture and in order to do so, everyone in the organization needs to not only have faith in it but also USE it. On some occasions, the management team quickly adopts a new CRM system for the sake that they recognize a need for it and see the value for their sales team. However, in order for the system to truly have an impact on the organization as a whole, management needs to support and use the system themselves and thus contribute to marking its role within the company. Top-down support for the CRM initiative has to be present for the adoption to be smooth and successful. Management needs to believe in the CRM and support its benefit to the company, which cannot be accomplished without their unconditional buy-in. 3. Inadequate Training Another common reason contributing to the high statistic of CRM failure is simply because the users are not trained well enough. Let it be because they didnt ask the right questions or because they are not technologically-saavy, if the user doesnt know how to use the system, it is inevitably doomed for failure. It is crucial for all users to actively take part in becoming an expert with the CRM solution. They need

to ensure that their list of needs matches up with the softwares functionality and that they know how to optimize on those features. However, none of this can be accomplished if their CRM vendor does not take the time to efficiently train the users. It is common for people to require far more support and nurturing than training personnel might assume. With that being said, apart from the systems features, companies should sufficiently research what type and level of support the vendor will provide them with throughout the adoption. Knowing this in advance will help to minimize the risk of lack of use and ultimately, failure. 4. You cant teach an old dog new tricks The fourth most common reason for CRM failure is a result of the salespeople not wanting to adopt the system. Once they develop a routine, salespeople are reluctant to adopt new things, especially technology. The issue than steers clears of being a system issue and instead is a result of a people problem. Having the attitude thats not the way we like to do things can cause the CRM system to fail before it even goes live. Salespeople need to not only be fully informed about the systems functions and capabilities, but as well its benefits in order for them to understand the value that a CRM solution can provide. They need to see that the CRM is not purposed to change the way they do things, but rather to enhance and simplify things. It is also crucial for the salepeople to be actively involved during the adoption process and provide their feedback so that they see the benefit of implementing the CRM system into their daily routine. I hope that by outlining the top 4 reasons why CRM systems fail, it will assist companies with not only finding the ideal CRM product for their company but also how to go about gaining support from every member of the organization prior to adopting a solution. If requirements are clear and concise, support is unconditional and training is of great importance, the implementation of a new CRM system should prove to be successful and not detrimental.

CRM Strategy Errors

1. The right leadership is not in place: A business leader needs to be in charge of the CRM effort, not IT. Successful CRM is a major business initiative, not a technology initiative. 2. CRM Strategy not clear: The CRM strategy and vision need to define what customers experience at each touch point, and how will they be handled at each touch point. The vision needs to be clear to everyone. Unclear vision makes it faled. 3. The CRM strategy is different from the business strategy: CRM is sometimes seen as a lower level automation step or patch, rather than a top level rethinking of how customers are served. This leads to failure.

4. Processes not re-designed: Companies get better results from CRM when they begin by focusing on sales processes. This requires redesigning the process. Failure to re-design leads to failure. 5. Customers not consulted: If customers are not consulted before, during and after the CRM, it will eventually fail. 6. Unclear metrics: If the metrices are not clear, it will not be able to determine the real business value of the effort. It leads to failure. 7. Inability to link channels: CRM often does not focus all parts of customer experience. This is a cause of failure. 8. Lack of preparedness for continuous improvement

Be ready for bumps in the road. Be ready to refine strategies, revise goals, re-set metrics, and learn from feedback. Successful CRM projects are rarely completely successful from the outset.

People errors
Introducing CRM to hundreds of employees at a time

It's easy to want to do too much, too fast. Get it right first with a small team of employees chosen to represent a cross-section of your company. Choose an initial project that can make a dramatic difference, with clear key performance indicators. Strong pilot results will help you avoid the next pitfall:
Changing the system, but not the people

It's easy to focus too much on the new technologies and processes rather than focusing first on the people who will use them successfully. You need employee excitement about doing a better job for customers. You need employee feedback and overall buy-in. The entire company needs to own "customer-first." They need to see that the CRM vision you all hold takes them to a better place than where they are now.

Process errors
Instead of enhancing new processes, changing the CRM system to fit old processes

To avoid the pain of revision, some companies don't take the opportunity to re-engineer and optimize their processes. They look to CRM as a patch rather than an opportunity from the ground up to increase customer satisfaction, revenue, service and overall productivity.

Technology Errors
Customer data is in more places than expected

As implementation gets underway, key data can turn up in salespeople's PDA's, spreadsheets, handwritten notes, and legacy systems. To avoid surprise integration nightmares, the requirements gathering stage needs to be careful and thorough.
Different CRM solutions are in place but do not work well together.

Often marketing, sales and service departments already have different types of CRM software, from different vendors, to track the same customers. As a result, these departments can't share data, and have redundant support and administration costs.

Customer Management Errors

Customers do not experience new benefits

The ultimate test is to be able to demonstrate increased satisfaction among customers, along with increased customer value to your business. This goal can inform every choice you make during planning and implementation. But just like the adage "watch the ball" in sports, it's a fundamental often overlooked.