The current economic conditions have organizations looking to squeeze more value out of their existing CRM imp...
William Band, vice president and principal analyst with Cambridge, Mass.-based Forrester Research, recently issued a report detailing some of the ways companies can mine that hidden value to improve their CRM ROI.
"We know in the last six months, new applications license sales dropped 14% or 15%," Band said. "That means a lot less new deals. We've been getting calls from people who are saying, 'I have to look at CRM again, but I'm not going to get anybody to agree to buy anything new.'"
In fact, the current climate for CRM harkens back to the earlier days of CRM when the wild optimism and hype around technology led companies to make big investments, which resulted in massive and costly failures. That left organizations timid and reluctant to spend more on CRM, having already been burned -- until the economy and new developments convinced them it was time to spend again. Now?
"The circle has turned once more," Band said.
The biggest culprit in keeping organizations from fully taking advantage of their CRM implementations is user adoption -- a longtime scourge of successful CRM projects.
"On the sales force side, most people that have implemented CRM have primarily focused on management reporting," Band said. "A lot of the unused functionality can be at the back end -- contact management, the customer profiling part that might be more helpful to the salesperson."
Organizations should take a close look at their existing license agreements to figure out what they're not taking advantage of. For example, a lot of companies paid for additional mobility capabilities that they're not using, Band said. Unused functionality is also a product of the fact that at many organizations the personnel that made the purchasing decisions may have moved on to other positions or left the company, and those who have taken over may not know the extent of what was purchased.
"A lot of people might have spec'd a lot of things into the implementation plan two or three years ago, and they're paying for things they never implemented," he said.
When optimizing an existing implementation, quick ways to cut costs or build revenues are a good start, such as adding a mapping application within a CRM system that can cut back on routing deliveries or implementing the lead management capabilities that many applications include within their suite.
Companies that are up to date on their maintenance and support agreements should also consider functional upgrades, Band said. Some vendors have begun adding Social CRM or Web 2.0-type capabilities to their applications that customers can take advantage of quickly. In fact, in good times or bad, companies should review their application environment.
"If there's no money for new CRM projects and you're already paying for ongoing maintenance fees, you should always be looking hard at what you've already bought," Band said. "There isn't a regular review of this."
Band advises conducting a quick proof-of-concept test with a short demo, or end user involvement to help determine whether turning on a piece of functionality can result in some quick wins for the business.
End user adoption has always been a critical factor in the success of a CRM implementation, but many organizations have done little to follow up once a system is rolled out. A Forrester survey found that companies that achieved only 30% user adoption after three years saw only 5% ROI on their CRM projects. Companies looking to maximize their CRM investments should focus on additional user training.
"User training -- that typically is given short shrift," Band said. "People weren't originally given the right training. There's been no ongoing refresher training. A lot of organizations don't think about turnover. If people turn over rapidly and it's been three or four years since your initial implementation, your sales force is totally different people."
Band advocates monitoring usage of the system, either by soliciting user feedback, leveraging system monitoring tools included in many CRM applications (particularly Software as a Service-based CRM systems), or investing in monitoring software.
Companies that are seeking to get the most out of their existing CRM implementation are typically finding champions within the IT department or from an existing department head.
"We are seeing it in the IT organization because they're under pressure to make sure they're managing applications efficiently, and they're initiating reviews where they engage the business to look at what capabilities were bought with it," Band said. "Often, you see a sales application manager or a sales operations manager who's trying to support CRM application and knows he can't get any money for new stuff and needs to re-engage the users."