A Pledge for CRM Success

This is an open letter to all you corporate executives who are grappling with the

hoary task of designing and implementing CRM in your organization.

Despite all of what you’ve heard and read about in surveys, research reports, and

whatnot about the high failure rate of CRM implementations and the low rate of

customer satisfaction with the most popular CRM packages, I have the solution: the

three-point pledge.

Before you take this three-point pledge, however, you’ve got to qualify:

  • Are you really willing to make the changes necessary to increase CRM success?
  • Are you committed to learning more about your customers and are you willing to

    do what it takes to identify, attract and retain the right types of customers?

  • Are you really serious about improving the operational performance of your


If the answers are a resounding “Yes” to all three questions, then stand up, place

your hand over your heart, and repeat the following:

Promise #1: Don’t adopt new technology without a clear understanding of how it can

generate economic benefit, given its potential risks and rewards and your

organization’s design, strengths and weaknesses.

“I promise not to adopt new technology without a clear, viable strategy to use the

resulting functionality to either improve revenue and profits, and/or reduce costs to

a degree which substantially exceeds the total amount of investment required to make

the technology work in my organization. By viable, I mean that this strategy will be

grounded in a deep and real knowledge of customer needs, interests and behaviors; the

core competencies of my staff; the competitive strength of my offerings; the

cohesiveness of my corporate culture and organization, and architecture of my

technical infrastructure.”

Does this seem silly to you? Well, it represents a major mind shift to most of your

corporate counterparts. Many organizations seem to buy software packages as the magic

bullet to their problems, believing that, once installed, the software will

mysteriously make their people, their business processes, and their collective

organization so much smarter and better.

Think I’m kidding? Just consider all those organizations that bought CRM packages and

painfully and meticulously reconciled, cleansed and integrated customer data, and

recreated all of it in a brand new data model – just so these businesses could

achieve an integration of customers across different customer-facing processes and


And what did many of these same companies do to recoup their costs of such a massive

investment? Did they create self-service Web sites so customers could view and manage

their accounts, in order to lower servicing and handling costs? Did they provide

value-added analysis at the request of customers to offer them superior value and

better deals in generate added revenue?

No, many did not. They simply spent a lot of time and money, only to achieve a better

internal view of customers. While an integrated view of customers gives companies the

potential to offer better service and/or deliver superior value, an integrated view

doesn’t really generate any economic benefit by itself.

Promise #2: Use a portfolio management matrix with quantitative performance

criteria to prioritize, coordinate, consolidate and streamline CRM initiatives across

different business groups within your organization. Respect the fact that different

businesses have different needs, and understand what technical and business processes

can be shared and/or standardized and which ones should not.

“I promise to embrace a portfolio management approach to my CRM initiatives from

my various business units and/or operating groups. I will integrate and consolidate

these efforts to avoid overlapping, duplicative and contradictory technology

development efforts. Moreover, I promise to evaluate these initiatives on the basis

on solid, short-term as well as longer-term performance metrics, and will assign the

highest priority to those initiatives that offer the great economic benefits,

relative to cost and ease of implementation”

At most large, multidivisional corporations, the problem is not that there is no CRM

strategy. The problem is that there are dozens of CRM strategies and initiatives,

many of which are duplicate their efforts and and overlap each other.

Some run contradictory to the organization’s IT strategy and architecture. For

example, while the IT division of an organization is committed to open standards and

Internet-based technology to ease integration and global deployment as well as lower

maintenance costs, business groups will go ahead and buy a CRM package which is based

on a proprietary data model and business objects.

The good news is that many organizations recognize this problem. The bad news is how

they often “solve it.” One way is the low-tech “workshop” approach, while egos,

tribal instincts and corporate pecking orders prevail at establishing priorities –

what initiatives get funded and how they are rolled out.

A more high-tech method involves a corporate-wide effort to gather all the business

requirements and cram them into a single, enterprise-wide solution framework. This

forces different operating groups to adhere to the business process design and

workflows of the software application. The bad news is that, in many cases, different

operating groups have very different ways of conducting business (some for good

reasons, some for not so good reasons).