Getting to know you

Companies about to set sail into the murky waters of CRM had better not look for clear blue skies and an easy journey. No matter how sturdy the boat they’ve built or bought for themselves, chances are they may not be able to stay their course in the political storm that CRM often brews up. Infighting may blow them off course, as may a crew that hasn’t been properly trained or lacks strong leadership – leadership that likely failed to chart the waters before it blindly set sail.

When companies lose their way in CRM, it’s often because they mistakenly set off in the belief that customer relationship management begins and ends with technology. They don’t realize that the technology, though an important component, is but a small part of a much bigger picture. They fail to realize that before they can even begin getting to know their customers better, they need to first get to know themselves better.

CRM solutions typically entail significant changes for a company – and nothing can set fear into the heart of an employee like the prospect of large-scale change. Employees facing such change are often plagued with thoughts of being made redundant and losing ownership of their particular realm. And unless they are made an active part of the process by which the change is brought about, they will question the value and necessity of it – and may ultimately lead it to doom.

This is why strong stakeholder buy in and senior sponsorship is a must to any CRM solution. Failure rates for CRM are high – Gartner puts the estimate at about 60 per cent – and those companies whose CRM solutions sink often make the mistake of thinking of CRM as nothing more than a few lines of code. They plug in a software package and believe that it will cure all their customer woes – they fail to take into account the importance of people and processes.

Al Povoledo, a senior manager at Deloitte & Touche in Toronto can’t stress enough the importance of getting people involved in the CRM process. Companies need to help their employees understand why they’re implementing the solution. They need to know that the solution isn’t being brought in just because someone with purchasing power was seduced by a piece of technology. They need to know that the solution is about improving their company’s relationship with its customers, not a new set of gadgets. They need to know that the solution may ultimately lead to an increase in revenue and more prosperous times. Finally, they need to be taught how to use the technology. If the lifeblood of real estate is location, location, location, then for CRM, it’s training, training, training, Povoledo said.

“All the money in the world can’t save a CRM project if at the end of implementation it is put in the hands of unskilled employees,” said Joseph Belsanti, e-services solutions manager for Hewlett-Packard (Canada) Ltd. in Toronto.

Companies that throw daunting new pieces of technology at an employee already struggling to come to terms with massive change are sabotaging CRM initiatives.

all aboard

The challenge and importance of bringing people on board is something Winnipeg-based Rhonda Lorch, the operations manager for the Evangelical Lutheran Church in Canada, understands.

There are 625 Lutheran church delegations across the country, and they each act like separately incorporated businesses. So when the national office decided to implement a CRM solution in order to better manage its clergy and flock, it knew that getting the various churches to use the Lotus Notes-based platform was going to be a challenge, since some of the congregations don’t even have a fax machine yet.

“The people at the congregations were intimidated by the system,” Lorch said. “They are under no obligation to use the system. We have to convince them.”

But even though the process of bringing the congregations on board is a slow one, the system is already proving itself in terms of consistency of information, she said. Before, when a member of the church changed his or her e-mail address, approximately 15 different people in the congregational, regional and national offices had to change the information. This was a waste of time, and there was always a danger that someone would be missed. Now the address is changed once and fed to everyone else.

Companies considering implementing CRM should take the occasion as an opportunity to re-evaluate their existing modus operandi – otherwise, they may just end up automating an already-flawed process.

“And by automating that process, all they’re doing is exposing it at a faster rate to the marketplace, almost to the nth degree in some cases,” Belsanti said.

One major flaw that many companies need to address before they can even consider shopping for CRM applications is the fact that many of their business units work in silos, but need to work collaboratively. Often, businesses organize themselves into a number of silos that protect the information they’ve gathered about customers as though they were countries guarding state secrets. Various departments look at each other suspiciously and fear that if they lose control over the information they possess, they’ll lose their particular role in the organization as well.

Senior sponsorship by a vice-chairman helped the Royal Bank of Canada bridge organizatonal divides, clearing

the way for CRM. At the RBC, CRM is an integral part of the company’s cultural fabric and is woven into everything the company does, said Irene Sobolewski, a senior vice-president for enterprise customer information and project services with RBC Financial Group in Toronto.

“We don’t even consider it a program any more,” she said.

Training is a cornerstone of RBC’s CRM process. The company has one database, which allows it to gain a complete view of its various customer clusters.

Departmentalized information makes it difficult

for companies to obtain the 360-degree view of customers that CRM solutions are supposed to engender. CRM applications, in order to be successful, need to be implemented on an enterprise-wide basis, said Laura Pollard, president of CRMA Canada in Toronto, a non-profit organization dedicated to developing a better understanding

of CRM. To do this, companies need to educate employees.

“If everybody has all the same knowledge, then there isn’t going to be all this infighting over who’s going to

own it, because everybody’s going to be responsible,” Pollard said.

Another leading cause of CRM failure is that companies all too often plunge ahead without any plan at all. Although CRM has to be an overarching, enterprise-wide solution, it should not be executed in one fell swoop.

Go deep and go narrow, says Deloitte & Touche’s Povoledo.

When CIBC embarked on its CRM journey, it began by developing a concept of its brand and what it wanted its brand to stand for – a concept agreed to on an enterprise-wide basis, said CIBC’s Toronto-based Julio Tavares, director of database marketing for the card products division. The company then developed a blueprint of what its needs would be. One goal was to ensure that customers felt that they were dealing with one entity, not a number of silos.

Choosing a technology solution – the card products division ultimately went with SAS Institute Inc. – came afterwards. And many elements of the solution weren’t about putting new technologies in place, but about putting new processes into place, Tavares said. As new elements are slowly added, the company makes sure that they are integrated into the system as a whole.

Once a plan is executed, the next step is to measure its success, so CRM solutions should also include metrics.

privacy please

But employees aren’t the only ones that need to be brought on board for a CRM solution to be successful. The prevailing wisdom once stated that companies needed to gather every last scrap of information they could pull together about their customers. Now companies need to be considerate of their customers’ privacy and aware that violating it carries penalties under the Personal Information Protection and Electronic Documents Act.

But following the principles set out by the privacy act, besides being a necessity, just makes good business sense, said Trish Wheaton, the Toronto-based president of Wunderman, a marketing company.

There are companies which continuously collect information about customers, but never do anything with it, and this is unwise, Wheaton said. Nowadays, when customers give out information, they expect something in return.

“If you collect too much information, and you never do anything with it, it turns customers off,” she said.

It also doesn’t pay to keep information around too long. Old data may no longer be accurate since 20 per cent of Canadians move every year, Wheaton said.

In order to be compliant with the privacy act, Canadians must identify the purpose for which they are collecting information, obtain consent from customers before gathering information about them and use the information only for the purpose for which it was collected. Companies must also limit the amount of information they collect as well as how long they retain the information.

But not all companies respect the spirit of the privacy act, even while following the letter of the law, HP’s Belsanti said.

Some companies question what is considered private information and claim that because a person’s address and phone number is available in the phone book, it can’t be considered private information.

Besides exposing customers to the dangers of fraud and invasion of privacy, such actions carry another danger, Belsanti said.

“Quite frankly, you risk the danger of turning somebody away from your organization. You risk not only angering, but permanently disrupting that relationship with a customer or a potential customer.”

The flip side of privacy – security – also has to be an integral part of any CRM solution. If a company’s database is hacked into because it failed to take the proper precautions, it can be liable.

Doug MacPherson, a security sales specialist for Tivoli Systems Inc., a division of IBM Canada, in Markham, Ont., thinks companies need to better safeguard their data. They need to create roles-based access rather than individual-based access. With individual access, alarms are often tripped accidentally because of exceptions. After a while, network administrators stop checking the alarms.

Administrators also need to be more vigilant about applying patches to their system and updating their antivirus software on a regular basis.

“If you can do that, you’re pretty secure. But most

people don’t do this. There are holes that are two years

old with fixes that hackers are still breaking into,” MacPherson said.

CRM solutions must be sure to keep those who shouldn’t have access to the information out.

But for the most part, CRM is about inclusion. It’s about gaining support from executives, bringing employees on board to a new way of doing things and making sure that customers want to participate.