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
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
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).