CRM: More than just software

Implementing a CRM software package takes a lot more than just installing the software. Most of the software on the market can provide the tools for companies to move closer to their customers, so it's not the software that falls short of expectations. Often, the implementation fails because the company hasn't taken the time to define its business processes and the problems that the CRM software will solve. At the Customer 360 Conference and Expo in Washington, D.C., searchCRM sat down with Pierre Charchaflian, director of marketing solutions at DiaLogos, a Boston-based CRM services provider, and a conference speaker. Charchaflian emphasized that technology is not always the key to great relationships with customers.

What do companies need to do before they think about CRM?
Before they think about the technology, they need to think about how they're going to change the business. What's happening right now is people are implementing technologies that are generations ahead of their business capabilities. They implement complex campaign management tools, call center capabilities, SFAs (sales force automations) and don't use them. Companies have to start thinking about customers and their business processes differently... and test their CRM programs before they implement the technology. You can deliver business impact with CRM without the technology, but you need it to scale. Start small, test it, and then use the technology to scale. Why are today's technology solutions falling short for CRM?
For the last ten to fifteen years, business people have been hammering on technologists with demands. I think today's technology companies have delivered, but I think business people have fallen behind. I think they lack the appropriate frameworks and transition and the will to change... to take advantage of these technologies. Technology solutions aren't missing anything. They've got more than enough to get companies going and have them light-years ahead of where they are today. Do you have any customer examples?
Outpost.com is a company with relatively low technology investments, without investing in huge call center or SFA applications. They maintain a small customer database with a small campaign management tool on top of it. The whole solution didn't cost more than $200,000 to $400,000. ...We're able to improve response rates and conversions... from the traditional 5% of the industry to ... over 30% to 40%. We also implemented a solution for the U.S. Mint back in 1997, ... a customer database, centralized database and campaign management tool. ...We realized that ... retention was very high, but acquisition was a problem. ...From a process perception, they were doing great. They had excellent customer service. They had great customer satisfaction. But they hadn't introduced new products in a long time. ... They took our recommendation to improve acquisition and came up with the 50-state quarter program. They organized around that program, put customer segment managers and really focused on the customer lifecycle. They're a company that has gone from $300 million a year in 1997 to $1.2 billion this year. It's truly not about the technology; it's about the business. It's much tougher to change the business than change the technology. It seems that a lot of companies just want to buy a software package, install it and hope that all its business problems will be fixed. Why is this?
It's human nature. I mean, what do you do when you want to first start exercising? You buy the sneakers, you buy the treadmill and you say, "Now I'm ready." Then, you've just got to ... run, and a lot of people don't do it because it's discipline, changing habits. That's where leadership comes in, and that's where companies naturally say, "Okay, we need to take some action," and they're going to take the easiest actions. They buy the software. They implement it, and it's expensive, but it's easy. It's not nearly as hard as changing your culture and your business processes.

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