Why do CEOs run shy of CRM?
White Paper Published in “Making CRM Stick”
CRM - Customer Relationship Management - Is it a fad or do we ignore it at our peril?
Many CEOs seem to run shy of CRM and pass it on to their Service or IT Directors to deal with, but Dave
Rochford argues that whilst CEOs may be justifiably concerned, if not paranoid, about the hype and
hysteria, nonetheless they are missing significant opportunities. He explains that with the right attitude
and approach, such paranoia can be transformed into significant profit and competitive advantage.
CRM – Perpetuating the Paranoia
Current research reveals that most companies don’t have a CRM strategy and whilst most have plans to
invest in it the vast majority of CRM initiatives continue to fail. We read every day of companies
spending millions on a CRM solution with little to show for it, and many are still burdened with
processes, systems and people in apparent disarray and disharmony. Why is this so?
An underlying reason is that this is a complex subject and many companies still do not have a real
appreciation of their customer needs and what really happens at customer interaction points. As a result
channels to market are not utilised effectively, nor integrated sufficiently to enhance customer
convenience and value added.
CRM measurement is also still in its infancy. Most companies still rely on quantitative rather than
qualitative information and do not know precisely the full costs of service nor which customers generate
profit or loss.
Finally, few CRM projects have well defined business cases with an assigned ROI.
No wonder then that CEOs appear disillusioned, disenchanted and disinterested, when CRM is
mentioned. How then do we turn this apparent paranoia into profit?
Proceeding from Paranoia to Profit
In setting out on a profitable and successful CRM journey, adherence to the following three abiding
principles is vitally important.
The CEO and management team should all be involved and committed and significant emphasis should
be placed on communication of the objectives and benefits. This is the first hurdle. Without this the
project is doomed from the start. Also the benefits must be delivered early, and management operating
systems should be put in place to measure what gets done.
But how do you convince the CEO and senior management in the first place, and how do you get
started?
As with all other investments CRM should initially be treated as a project and as such it should be clearly
defined, clear in scope, and clear on benefits.
To facilitate this and put it into a business context the CRM project should commence with the
completion, and sign off, of a Project Initiation Document that interprets the vision and key objectives of
the business as well as define the deliverables and benefits from CRM. In doing this it should also
contain a CRM route map explaining the “what and when”, a business case explaining the “why” in
financial terms, and detailed implementation plans and structured project management arrangements
explaining the “who”.
In implementing CRM it is helpful to “think big but act small”, and be “customer” and not “organisation”
or “system centric”. In the early stages of the project, effort should be placed on understanding and
working on end-to-end processes that support the customer, rather than focusing perhaps on the
software or on how the solution may fit the organisation.
© 2009. Implement CRM Ltd
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Abiding by these simple but pragmatic principles should significantly improve the chances of success as
well as deliver a good return on investment.
Making it Happen
Principles are one thing, but making it happen is another. Below are the critical factors that make for a
successful CRM implementation.
Getting the Right Balance
As CRM is to be treated as a project, it should have a clear scope and well-defined objectives, robust
plans, a sound business case, and a measurable and assigned ROI. Relevant, detailed analysis and
evaluation is key to this. Often organisations either fail to give this sufficient weight and attention,
resulting in a weak analyses and justification, or overdue it, with the result that people will not buy in to
it.
Getting the balance right is important - that is balance between seeing the big picture and detailed
analysis, balance between people, systems and processes, and balance in terms of needs and what can
be done.
“Thinking big but acting small” is key to making it happen. Whilst it is important to set out a CRM route
map that aligns itself with the vision and objectives that the organisation wishes to achieve, when eating
the CRM elephant one should do it in small bite-size chunks that can be swallowed easily.
Therefore, whilst the CRM route map will outline a logical sequence of changes that are required to
processes, systems and organisation to improve customer management and profitability, the quick wins
and improvements that can be implemented easily in a short time scale are key to organisational buy-in
and bottom-line success.
Thus, it is important that CRM is seen as a central part of the business, that it delivers early and
demonstrable benefits, and that there is alignment with short and medium term business objectives.
Changing the Processes
Understanding and mapping of the key processes and systems involved in contacting and managing
customers is also important. The people responsible for particular processes or systems should
undertake this work. As it is customer focused it will invariably be cross - functional in scope and may
require the appointment of process owners to manage it.
Process owners must have delegated authority to effect change. Furthermore, mapping should not take
6-12 months to complete, as is often the case. In its simplest form “brown papers” (sheets or rolls of
paper) can be used to document the existing key processes, systems, organisation and interactions,
often in a matter of days.
From these maps of existing processes and systems, white papers documenting the “to-be” or proposed
CRM model can be developed, and from gap, evaluation and risk analyses, a route map and plan can be
developed to implement the required changes, including quick wins.
Quick Wins – the Route to Success
So as the CRM route map and plan are essential guides to chart the overall journey, the quick wins are
the immediate improvements that should deliver significant and demonstrable benefits. The quick wins
will help to obtain buy-in to, and pay back on, the project. They will also provide management
commitment and a financial contribution to the next stage of the project.
What can be Measured gets Done
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All of this work will depend on capturing accurate and comprehensive information not only on customer
needs and how they wish to be served, but also on current service performance, and the costs and profit
involved in doing business with customers.
Clean and comprehensive data is a pre-requisite - a factor often overlooked and which leads to project
delays. It is key to obtaining reliable information and acceptance of baselines on performance, which
should be put in place from day 1 of the project so that improvements can be monitored against them.
Some investment in a database management system is also often required to consolidate and present a
single view of the customer, which can then be seen by all relevant managers and staff.
People - Make it Happen
It’s people that make it happen and the core CRM project team should have representatives from
different functions. The core team should also be full time and individually accountable. Insufficient
resource and skill, and inadequate accountability are factors that often lead to failure.
A sound business case and plans undertaken at the beginning of the project showing the resources,
costs and returns should help overcome any resistance to releasing the resources required. This should
then be monitored rigorously along with deliverables, benefits and time scales.
Pitfalls to Avoid
In summary, any of the following pitfalls can result in failure:
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lack of top management commitment
unclear scope and definition
poorly mapped and documented processes and systems
inaccurate and unclean data
absence of baseline measures of performance
unstructured project management methodology
inadequate resources, skills and accountabilities
poor communication of the project.
These and any other potential pitfalls should be identified at the beginning of the project and formalised
in a risk mitigation plan that is agreed, monitored and remedied by senior management, usually in the
forum of a project steering committee.
Given the complexity and cross organisational nature of most CRM projects, strong project management
is essential and needs to be backed up by the commitment of senior management, and in particular, the
CEO.
Realising the Benefits
As a benchmark CEOs should aim to reduce costs and increase revenues by as much as 20% in the
areas covered. This can have the effect of doubling profit.
Again if sufficient focus and attention is given to implementing quick wins and short - term benefits then
often investment costs can be recouped in year with multiple returns delivered on a recurring annual
basis thereafter.
CRM should be self-financing. If you think about it why shouldn’t this be the case? It’s only by treating
our profitable and emerging customers that companies will be able to increase the value added to their
business. Hence investment should be self-financing and should reap a significant return.
So although CRM may inject abject fear and paranoia amongst most CEOs, if planned and implemented
correctly the benefits can be significant.
CEOs and, in particular, Finance Directors should take note!
© 2009. Implement CRM Ltd
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Dave Rochford is the Managing Director of Implement CRM and is a leading exponent of effective
customer service and management. He has been assisting companies to implement profitable customer
service and management solutions for the past 20 years.
You can e mail him at dave.rochford@implementingcrm.com or call him on +44 (0) 7765 235912.
© 2009. Implement CRM Ltd
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