A recent survey from Business Intelligence quotes success rates for CRM implementations at
around 10%. Since I've met all kinds of people, from those who thought CRM was some software on a
few CDs to those who recognized its true significance, I guess that high CRM implementation failure
rate is not surprising. But let's see if we can contribute to a reduction in heartache and an
improvement in flag-waving!
CRM's a whole business, whole brain thing.
CRM implementation is as much whole business as it is whole brain. It needs understanding, commitment, energy and passion. Moreover, every single individual in the organization needs to be in on it and up for it. One-man bands get CRM right -- otherwise they go out of business. Need a business decision for the benefit of customers? No problem. It's done. However, as a business grows, that agile, flexible, empowered, responsiveness gets harder and harder. With 4,000 employees, it's 4,000 times harder. That's why I don't help firms to 'do' CRM, I help big businesses learn to behave like small businesses.
This view of CRM changes the way you see it and think it, and it widens your perspective. It's not a sales and marketing tool requiring a smart solution from IT (recipe for failure!). Rather, it's a business-wide transformation requiring change in every aspect of a corporation (recipe for success - but a much harder dish to cook!).
Getting rid of the inhibitors
To implement CRM successfully, a business needs to become wholly customer-driven. That requires radical change, experimentation, courage and faith. Customer-driven concepts cannot work in businesses which have the following factors:
- Command and Control Cultures - Businesses following orders from the top cannot achieve the customer focus or responsiveness required to succeed in a CRM environment. They are obsessed with upside-down values and are usually too introspective, bureaucratic and customer dysfunctional.
- Centralized Marketing Decision-Making - Marketing, advertising and selling has to take place at the front line or as near as possible to it. Centralized decision-making of these disciplines precludes successful work in the soft issues of customer relationships.
- Lack of desire to re-engineer sales and marketing - There has to be corporate-wide acceptance of the significance of customer loyalty, customer development and the need to be selective about who you sell to (scary, huh?). And, to create seamless delivery, you must get rid of the seams. Without multi-disciplined teams of individuals who take full responsibility for groups of customers, failure is the only end result.
Your list of Enhancers and Enablers
- The Culture Issue - Managers have to embrace a new culture. Delegation is often upwards. The higher you are, the harder it gets. Your only salvation is that you can no longer get much higher. There is no height! The hierarchy has gone. But you can get smarter, more widely skilled, and more accomplished.
- The Speed Issue - Businesses need to implement change at maximum speed. Yet decision-making and planning never seem to leave enough time for the work. Businesses which have an inspirational leader, with strong convictions and a sense of purpose, will leap light years ahead of their competitors.
- The Communications Issue - Customer communications must be pushed into real time and they must make sense to the customer. Businesses must be fully cognizant of the customer's current status and history, and they must be equally in tune with the nature and style of the relationship.
- The Prioritization Issue - Customer service standards should be corporately consistent. However, customer perceptions of service levels vary broadly with the customer's actual value to the company. Customer priorities should be set along a 'cost to serve' rationale which develops hierarchies of customer service levels aligned with customer lifetime values.
- The Motivation Issue - Promotion and money, as motivators of employees, are of increasingly dubious value. They are replaced by personal growth and fulfilment and increased involvement in 'important' issues. With no hierarchy to climb, for the enlightened, greed is being driven out, while the goal of increasing value to the business is being driven in. Groups with common goals flourish when they have common motivations and reward criteria.
- The Resource Issue - Corporations should only embark upon customer-driven initiatives from the basis of strength, success and profitability.
- The Project Overload Issue - Typical CRM implementations are comprised of a vast matrix of separate but interconnected projects. Even when key staff members are lifted out to dedicate themselves to major project work, teams suffer stress and over-work trying to achieve day-to-day goals alongside all of that 'vital' project work.
- The People Issue - Ensure that those who are on the side of change move forward and those who are undecided or 'anti' move out. Be uncompromising about this. Change will only happen successfully if everybody wants it. Carrying the undecided or 'wait to sees' slows the process down and dilutes team commitment.
- The CEO Issue - This has two elements:
Gaining Support - Major corporate change programs should have the understanding and support of shareholders. CEOs who fail to gain this find themselves exposed and vulnerable. As marketing directors or VPs have to supply long-term loyal customers, CEOs have to ensure that the business also has long-term loyal shareholders.
Personal Power and Leadership Skills - The new management style and culture required by a CRM transformation needs powerful leadership. Leadership of a managerially democratic organization is very different with motivation through inspiration -- as the old Chinese saying goes 'the sign of a good leader is that the people believe they did it themselves.'
Which of these issues has the most devastating potential if not managed? The CEO Issue. To attempt a CRM implementation without the heart, mind, body and soul commitment from a capable leader is almost a guaranteed failure - particularly if he or she was not the original source of the initiative.
Can you believe it? You just read an article about the critical success factors for implementing CRM and software and systems didn't even get a mention!
John Frazer-Robinson, one of the world's leading CRM consultants, speaker and trainers. His latest book 'It's all about Customers!' is available from www.CRMspeaker.com.
This was first published in April 2001