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Two years ago, a survey by the Economist Intelligence Unit of 370 businesses of all sizes revealed that only 15 per cent of them had derived any real value from their customer relationship management implementations. The study concluded: "To the chagrin of many companies - from those with double-digit billion dollar annual revenues and up to $100bn in assets, to small businesses with less than $50m in annual revenue - CRM has yet to achieve the promised return on investment goals that made it so appealing in the first place. Furthermore, in many cases, customers have yet to notice a decisive difference."
Of course not every project ended in failure. One notable early success story was beer maker Heineken where the company set out with a specific set of goals - to prioritize more important customers, achieve better penetration for the Heineken brand and improve service standards. The better focus yielded a 14 per cent growth in market share.
The aim of any CRM project should be to cut the cost of handling customers, while delivering better service and giving a 360 degree view to management of their operations. CRM should allow you to identify your most profitable customers, and should streamline business processes to deliver them a smoother and more efficient service. In short, it should increase profits.
Although larger organizations may be among the most advanced users of CRM technology, smaller companies can still reap benefits, while stealing some tricks from their bigger cousins at the same time. Jason Nash, a CRM manager for Microsoft, says: "In small businesses, CRM can have a big impact. For instance, if you don't need an office administrator because you've got workflow rules set up, that could be a saving of one person, which can make a big difference in a small organization." It is also worth taking a leaf from the leaders in the field to try some more sophisticated tricks. For instance, Amazon keeps a track of the books and music you buy and will suggest other similar products that might appeal to you. These examples of up-selling and cross-selling can be as easily applied to smaller companies with a range of products and services as to large corporations. And the good news is that CRM is no longer a big-ticket item. The advent of web based CRM solutions such as iportinstant significanlty lowers the price threshold with its pay-as-you-go model.
But as everyone says, technology is just part of the picture. Unless the whole organization is committed to customer service, and uses the system, then the return will be minimal. Staff need to be trained properly and the systems must be attractive to use. A key critical success factor is making the system really useful to the individual 'front-line' user - not just to their management. Try to design features into the system which actually help the user to do their job - rather than succumb to the temptation just to measure them. Giving a user an individual dashboards showing their own personal key objectives or other success criteria can really help.
The ultimate return on investment is to build a growing business, of course. With increasing competition, and increasingly demanding customers, good customer service is likely to be one of the main differentiators between those companies that thrive, and those that fall by the wayside.
Chic McSherry
CEO
iport4business.com
sources: silicon.com
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