The true meaning of CRM

Where I work, we have been looking at implementing a customer relationship management (CRM) solution. We believe that by doing this we will sell more and “energize the customer’s accomplishments while maximizing their perceived value when interacting with our distribution channels” — or something like it.

And of course we believe that our new sales will even cover the costs to implement the whole CRM thing. We also have some vision that our underlying malfunctioning operational processes that do not satisfactorily treat our basic customer activities such as order handling, will somehow be automatically solved when implementing CRM.

In other words, we believe that putting makeup on what we do today, i.e., our operational processes, will make it look like the state-of-the-art CRM application equivalent of Charlize Theron (choose whoever you prefer to look at).

We have not really spent too much time in looking at what our customers think, and in any case we might be disappointed if we did. Instead of speaking with them, we will implement our CRM that will allow us to better pinpoint our customers and therefore automatically sell more to them. Heck, the system will work by itself, bringing fame, glory and a promotion to the guys positioning and running this solution.

Just to avoid any problems, we do not create too much of a buzz about the return on this investment. CRM is good for the career, especially if it cannot be proved that it is a failure. We have very handily forgotten that the success rate of a CRM implementation is more or less the same as for data warehouses, which is about 70 percent failure. Which reminds us: Here we have another thing we do not like to talk about openly — we will need to modify our data warehouse completely in order to get the necessary data for the CRM system to work properly. But once we have done that, and convinced all our sales reps to enter the data into the system informing when their customers have their birthdays, if they play golf or if they have any other hobbies like fishing or riding a Harley-Davidson in the desert, we will sell more. The rest that is positive and brings the above-mentioned fame and glory will come automatically.

With CRM, we will not only know who plays golf, but also who are the top 20 percent of our customers. This knowledge will, of course, come automatically once the system is put in place. We have clearly noticed that most of our competitors do not seem to have a clue about who their top 20 percent are. If they did, they would certainly have been more successful, as 20 percent of the customers bring in 80 percent of the revenues. So we will be the first to know, and therefore we will automatically be more successful and increase our revenues. And revenues equal good times. Or at least we like to believe so, as we have no real idea which products and which processes are profitable, i.e., give a positive return on our costs. We will solve this too with CRM. Then revenues will automatically mean profit.

I actually saw a beautiful CRM application from one of the most well known CRM vendors at an Irish company. It was colorful, comprehensible and a real support when interacting with the customers. This Irish company explained to me how it had succeeded, and its efforts included hard work in improving the data quality and getting the data consistent, change management and communication among all involved parties. It was all very impressive and it all seemed like a really big effort. No silver bullet at all. But it was beautiful. And somewhere in this whole thing, the products were not forgotten. This Irish company still focused on product development, as products are what allow customer interaction. No products equals no value-added customer relationship in the first place. Product still matters.

Well, in the end we never bought a CRM system. We decided that we could do it better ourselves, so we are developing our own. It will cost less and the problems of data quality are minor. Or so we like to think.

Our biggest problem is convincing our sales reps to take the time to find out when our customers have their birthdays and what hobbies they have. The reps only have to enter this into the system so that we can find out who are the 20 percent best golf players to invite for our next golf-tournament.

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